Kenya has placed a ceiling on its carbon credit export volumes as part of a strategy to curb over-allocating domestic emission reductions to foreign buyers.
The State Department for Environment and Climate Change has capped credit transfers at 10 million tonnes of carbon dioxide equivalent between now and 2030.
Carbon credits are permits that allow firms to produce a certain amount of carbon emissions. Organisations that run environmental conservation efforts that remove carbon from the atmosphere or prevent carbon emissions can sell their credits to those that generate emissions.
For instance, as many manufacturers switch to their own-source generation with investments in solar and other renewable energy technologies, they can claim carbon credits for the carbon offset through the projects.
The adoption of a ceiling on exportable carbon credits is aimed at preventing overselling by local players to the global markets at the expense of meeting local climate change mitigation goals and targets.
It is designed to ensure a country has adequate domestic carbon credits to meet both conditional and unconditional 2030 Nationally Determined Contribution (NDCs) targets. NDCs refer to national climate action plans aimed at reducing greenhouse gas emissions under the Paris Agreement.
‘This Guide for Strategic Investment in Carbon Markets sets a national carbon budget for trading as a decision parameter that limits the cumulative quantity that may be authorised for international transfer during the period, with transparent tracking against the remaining balance. The purpose of a carbon budget is to set a clear, quantitative limit on the total greenhouse gas emissions permitted over a specific period consistent with long-term climate goals,’ the State Department says in a guide.
According to the guide, Kenya’s 10 million tonnes cap on carbon credit exports for the period to 2030 is spread across four priority sectors – energy, transport, Industrial Processes and Product Use (IPPU) and waste management.
The government has also adopted a list of priority areas for investment in Kenya’s push for environmentally friendly growth and development.
Read: Emissions: Kenya’s carbon registry could be a game changer for Africa
The State Department for Environment and Climate Change says that through the list, the government will be better placed to undertake a risk-based assessment of activities to be implemented during the period to 2030 in line with the country’s NDCs.
On the special list are electric mobility, renewable power generation, energy access, industry and waste management.
‘The whitelist is a policy steering tool that transparently signals Kenya’s priority activity types. Where the activity type is included in Kenya’s whitelist, it will be prioritised and assessed based on clear expectations. Where an activity is not included in the whitelist, it may still be considered. However, the proponent shall provide a clear justification of strategic alignment and integrity, and the request may be subject to more rigorous scrutiny’, the guide states.
Kenya joins South Africa and Nigeria in capping carbon credits exports.
South Africa’s Climate Change Act of 2024 and Nigeria’s Climate Change (Amendment) Act 2023 both put in place a framework for adoption of ceilings aimed at safeguarding the ability to meet their NDCs.
Kenya’s quest to prevent overselling of carbon credits in the global markets comes just weeks after the State announced plans to have a local carbon exchange operational by the close of March 2027.
The Nairobi International Financial Centre (NIFC), the Capital Markets Authority (CMA) and the Nairobi Securities Exchange (NSE) target to launch the carbon exchange by the end of March 2027.
‘Part of our mandate as the Nairobi International Financial Centre is to explore what the country can do to attract capital that targets innovation such as the trading of Carbon and Virtual Assets, and we are seeing a lot of interest in this. One of the incentives we are lining up is a Carbon Exchange, and we are working together with the NSE and CMA in setting it up,’ NIFC chief executive officer, Daniel Mainda, told the Business Daily.
Speaking while delivering the 2026/27 budget speech on June 11, 2026, National Treasury Cabinet Secretary John Mbadi revealed that the government was working on drafting carbon credit regulations to provide a legal framework on which the trading of carbon credits would be anchored.
‘Kenya is emerging as a key player in the carbon credit space, leveraging its rich natural resources and strong base in renewable energy. To actualise formal trading of Carbon Credits, the government is preparing Carbon Credit Regulations which will allow both public and private sector players to benefit through trading of credits generated in Kenya and the region,’ Mbadi told the National Assembly.
The adoption of Kenya’s Guide for Strategic Investment in Carbon Markets comes six months after the country rolled out its National Carbon Registry, a centralised platform for tracking, authorising and reporting carbon credits generated across sectors, providing proof of ownership for emission reduction.