Kenyan MP presents bill to regulate, share

benefits of carbon credits

GHG

event_note24 Jul 2023

Quantum Commodity Intelligence – Kenya needs a raft of new regulations for

carbon reduction projects and credits, according to a new bill by an opposition MP
published on Monday to be put to the country's parliament.
The bill proposes several measures to better clarify and codify rules for carbon
trading in Kenya and comes as the government has voiced its intentions to take a
bigger share of the proceeds from credit sales from the voluntary carbon market
(VCM).
"This a new legislative proposal that seeks to provide for the establishment of a
regulatory framework for the trading of carbon credits and benefit sharing in
carbon credit trading; the establishment of the Carbon Credit Trading and Benefit
Sharing Authority [CCTBSA]; providing for the registration of the carbon credit
trading business, and the establishment of the Carbon Credit Trading Tribunal,"
according to an overview of the bill.
The bill, which is being proposed by an opposition party MP Joseph Lekuton, said
the proposed CCTBSA would "provide policy direction and guidance" to both levels
governments on carbon credit trading, "effective oversight" over the sector, and
"ensure fair and equitable sharing of benefits among stakeholders."
In addition, the proposed authority would also generate revenues through the
issuance of carbon trading permits to a person or a company that intends to carry
out carbon trading business in Kenya, the bill adds.
The bill also outlined potential revenue that would accrue if the permit fees were to
be implemented, with 100 million Kenyan Shillings ($704,000) expected in the first
year of new regulations, KES 130 million in the second year and KES 169 million in
the third year.
Expenditure on the proposed authority would be between around KES 53 million
and KES 58 million, the overview to the bill states.
The proposed bill has come as Kenya's government set out its priorities for
environmental policies in a 'Draft Strategic Plan' for 2023-2027.
In a document that was uploaded to the environment ministry's website over the
weekend, the government referred to a "lack of clear carbon benefit sharing
mechanisms," and called "for development of the carbon market framework to
support the carbon markets."
In a section related to forestry, the plan said Kenya should increase forest and
tree cover towards a 30% target by 2032, including incentives provided by
"investment
in carbon markets, natural capital accounting, and payment for ecosystem services
[PES] schemes."
Earlier this month, Kenya's environment ministry said it will publish its new carbon
markets frameworks in September, the same month that the country hosts a major
climate conference in the run-up to COP28 climate talks in November.
In May, the ministry outlined proposals to allocate 25% of carbon credit revenues
to local communities with the environment minister quoted as saying that the
government would bring clarity to revenue sharing arrangements between
investors and local communities.
Kenya is one of the biggest host nations on the continent for projects that currently
supply the VCM, and is among a bunch of developing countries that are aiming to
facilitate fuller trading in jurisdictional credits as part of the Paris Agreement on
climate change.