Overview

Kenya entered the current carbon market moment with two important advantages: an existing history of participation in carbon trading through Clean Development Mechanism projects, and a strong political push to attract larger volumes of climate finance. Supporters of expansion frame carbon markets as a way to mobilize urgently needed investment for Kenya’s climate goals while also capturing part of the continent-wide revenue expected from carbon credit growth. Critics, however, argue that Kenya’s regulatory buildout has moved quickly, has left important legal questions unresolved, and risks prioritizing revenue generation over community protection and meaningful climate benefit.^[1][2]

In practice, Kenya now has one of the more developed carbon market policy frameworks in Africa. That framework includes rules on project approval, a designated national authority, plans for a national carbon registry, and mandatory community development agreements for projects on public and community land. Yet the same framework still contains major gaps, especially around carbon rights, overlapping legal authorities, the precise meaning of benefit-sharing, and the extent of real community power in negotiations.^[3][4]

Key Takeaways

Legal and Institutional Framework

Kenya also has draft 2025 regulations in the pipeline on carbon trading and carbon registry operations. These are intended to align trading with Kenya’s NDC and climate action planning and to further operationalize the national carbon registry, but they were still in draft form in the source material you shared.^[1]

Carbon Rights

One of the central unresolved issues in Kenya’s carbon market framework is the absence of a clear definition of who holds rights to emissions reductions and removals generated through land- and nature-based sequestration. Neither the Forest Act nor the Community Land Act offers a firm legal starting point for determining whether carbon is a public asset, a community resource, or a private commodity. Because carbon is not clearly defined as property or as a forest product, multiple interpretations remain open.^[7]

In practice, the Kenyan state appears to have treated carbon value as a public good overseen by public authority, but the 2023 amendment and 2024 regulations do not resolve the matter. Civil society critiques have argued that this omission undermines community property rights and weakens the position of communities whose tenure rights are otherwise recognized in law. In that reading, carbon rights should flow from legitimate tenure rights, especially where the Community Land Act places community tenure on par with private ownership.^[7]

This ambiguity is not only technical. Without a clear legal definition vesting carbon-related rights in communities on whose lands projects occur, communities risk being treated as passive recipients of project benefits rather than as active parties with meaningful ownership stakes. That weakens negotiating power and may also create longer-term risks for project legitimacy and sustainability.^[7][8]

Benefit Sharing and Community Development Agreements

Kenya’s legal requirement for benefit-sharing through Community Development Agreements is, in one sense, a significant step beyond the historically weak voluntary arrangements found in many carbon projects. The statutory requirement that public- and community-land projects include annual social contributions has been widely praised as a serious attempt to address one of the most persistent failures in carbon markets.^[1]

The problem lies in the details. The 2023 amendment appears to require community contributions calculated from aggregate earnings, but the 2024 regulations redefine the contribution base as aggregate earnings minus the cost of doing business. That change effectively shifts the baseline from something closer to gross revenue toward something much closer to profit. If that interpretation governs, communities may face delayed or reduced benefits, while project proponents gain room to overstate expenses and understate distributable returns.^[1]

The source you shared also emphasizes that cash percentages alone are unlikely to be enough. For many forest-based and rural carbon projects, the opportunity costs of changing land use or giving up forest resource exploitation may exceed what one-off annual transfers can plausibly compensate, especially in periods of carbon price volatility. More productive forms of benefit-sharing, including livelihood support, infrastructure, market linkages, and guaranteed early-stage transfers, may be necessary if communities are to experience real gains rather than symbolic participation.^[10][11]

There is also a governance problem. The current CDA framework places government within the negotiating and oversight architecture, including through CDA committees, whereas Section 36 of the Community Land Act provides a framework that more clearly supports community autonomy in contracting with outside investors. The tension between those two models goes to the heart of whether communities are true negotiating parties or are instead folded into a state-managed public-interest project model.^[1][14]

Land Situation and Litigation

Land tenure is one of the most sensitive and decisive fault lines in Kenya’s carbon markets. The constitutional and statutory framework for community land is relatively progressive, but implementation remains uneven. Large areas of community land remain unregistered and are still held in trust by county governments, which can leave them especially vulnerable to external investment pressure, including carbon project development. Those structural weaknesses are compounded by corruption, gender inequality in land ownership, slow registration, contested evictions, and unequal access to formal title.^[15][16]

The Environment and Land Court therefore becomes more than a dispute venue; it is a central arena in which carbon governance is actively contested. The source material highlights recent litigation in which the court has halted projects or invalidated actions where public participation, consent, or proper land governance procedures were lacking.^[17][18]

One especially important example is Osman & 164 others v Northern Rangelands Trust, in which the court found that a large-scale carbon offset project had been established on unregistered community land without adequate community participation or consent. The court halted project activities and reinforced the principle that carbon projects cannot proceed lawfully without adherence to community land rights and free, prior, and informed consent.^[19][20]

The profile also points to other disputes, including reporting on Ogiek evictions linked to carbon-revenue pressures and the Kajiado county government’s 2023 revocation of opaque community-developer carbon deals. Together, these cases show that carbon projects in Kenya unfold within an already contested landscape of land governance, state authority, and community power.^[21][22]

Conclusion

Kenya’s carbon market framework is both impressive and unsettled. On one hand, it is more comprehensive than many others on the continent: it provides project approval procedures, registry planning, Article 6 mechanisms, and mandatory community benefit-sharing provisions that seek to address longstanding market failures. On the other hand, the framework still leaves major questions unresolved, especially around carbon rights, the interaction of overlapping legal regimes, the meaning of community participation, and the actual enforceability and adequacy of benefit-sharing commitments.^[1][23]

The broader concern running through the profile is that Kenya’s carbon governance may be structurally tilted toward revenue capture and market activation. The drafting process brought together state actors seeking investment and continental influence, alongside ACMI and private-sector actors advocating rapid market scaling. That does not nullify the positive elements of the framework, but it does help explain why communities, land rights groups, and civil society organizations remain concerned that the current landscape may be better suited to monetization than to equitable rural development or durable climate mitigation.^[24][25][26]

For communities entering negotiations, the key lesson is not simply to ask whether a project promises benefits. It is to ask who holds the underlying rights, what approvals and consents are legally required, how earnings are calculated, who oversees implementation, and what room exists to negotiate terms that go beyond the statutory minimum.