Kenya has spent the last three years building a formal legal architecture around carbon credits. A project developer can no longer treat carbon trading as an informal, contract-only arrangement between a landowner and a foreign buyer. There is now a designated regulator, a national registry, a defined approval sequence, and mandatory rules on how much revenue must go to the communities whose land a project sits on. This article sets out that framework as it operates today, under the Climate Change Act, 2016, the Climate Change (Amendment) Act, 2023, and the Climate Change (Carbon Markets) Regulations, 2024.
The legal architecture: three instruments, one system
The Climate Change Act, 2016 is the parent statute. It created Kenya’s climate governance structure, including the National Climate Change Council and the Climate Change Fund, but it did not originally deal with carbon markets in any detail. The Climate Change (Amendment) Act, 2023 inserted new provisions into the principal Act dealing specifically with carbon trading. Those provisions define terms such as “carbon market”, “carbon trading” and “Designated National Authority”, and create the National Carbon Registry as a statutory institution rather than a private database.
The Climate Change (Carbon Markets) Regulations, 2024 then operationalise the amended Act, setting out who approves a project, what documents are required at each stage, what fees apply, and what share of revenue must go to affected communities and the state. Anyone dealing with a Kenyan carbon project needs to work from the Regulations, not only the Act, since the procedural detail there decides whether a project is lawfully registered at all.
NEMA as the Designated National Authority, and the National Carbon Registry
The Act defines a “Designated National Authority” as the entity authorised to approve participation in projects under the Paris Agreement, without naming it. That role has been assigned to the National Environment Management Authority. NEMA has confirmed this itself: at the launch of the National Carbon Registry, its Director General stated that “NEMA is Kenya’s DNA for carbon markets, it is also hosting and administering the National Carbon Registry”, now live at ncr.nema.go.ke.
Under the Regulations, the head of the DNA also acts as National Registrar, issuing letters of no objection and approval, monitoring compliance, maintaining the list of recognised carbon standards, and appointing project-specific ad hoc committees. The registry is organised by sector, with separate registers for energy, transport, agriculture, forestry and land use, industrial processes, and waste, each kept by a sector registrar who reports quarterly to the National Registrar.
The project approval pathway
The Regulations set out a staged process. A proponent first submits a Project Concept Note, with the prescribed fee, to the DNA. If it meets the requirements, the DNA issues a letter of no objection, generally within fourteen days; this is not a final approval, only permission to proceed.
Within twelve months, the proponent must submit a full Project Design Document, with national and county approvals, evidence of stakeholder consultation, and an independent validation report. The DNA refers this to an ad hoc technical committee, which reports within thirty days, after which the DNA has fourteen days to issue the letter of approval, with the concurrence of the Cabinet Secretary responsible for climate change. Only then is the project formally registered and entitled to generate credits on the National Carbon Registry. Missing the twelve-month window, or failing to commence activities within the set timeframe, can result in cancellation, so these deadlines matter as much as the substantive requirements.
Article 6, host country authorisation and corresponding adjustments
Where a project intends to generate internationally transferable credits under Article 6 of the Paris Agreement, whether under the bilateral approach in Article 6.2 or the centralised mechanism in Article 6.4, an additional layer applies. The proponent must apply to the DNA for authorisation of the international transfer of the mitigation outcomes generated. The DNA may grant this only with the approval of the Cabinet Secretary, recorded on a formal Letter of Authorisation.
Authorisation is tied to Kenya’s obligation to avoid double counting. The Regulations require the DNA to apply a “corresponding adjustment” to any mitigation outcome transferred internationally, so the reduction counts against the buyer country’s climate target and is not also claimed by Kenya, with a separate fee charged per unit transferred. In practice, a credit validated by a private standard is not automatically usable against another country’s target; it needs this specific host country authorisation and adjustment.
Community benefit sharing and government revenue
This is the feature that has attracted the most attention, and it is worth being precise about it. For projects on public or community land, the Regulations impose a mandatory annual social contribution: land-based projects, such as forestry, land restoration and soil carbon projects, must contribute at least forty percent of the previous year’s aggregate earnings after deducting the reasonable cost of doing business; non-land-based projects, such as clean cookstoves or renewable energy, must contribute at least twenty-five percent on the same basis.
Projects on private land are exempt from this mandatory contribution, though developers usually still negotiate benefit-sharing as a matter of commercial practice. Where the requirement applies, the funds are meant to be governed through a Community Development Agreement and administered by a community project development committee, not paid loosely to individuals. We cover the structure and negotiation of those agreements in more depth in a separate article on this site dealing specifically with community benefit-sharing agreements, and any developer working on public or community land should read that alongside this one.
On the government side, fifty percent of the fees collected for corresponding adjustments is payable into the Climate Change Fund, alongside a share of aggregate earnings from non-land-based projects. Fixed administrative fees also apply at each stage, from the concept note fee through to a per-tonne fee on issuance of credits, with different rates for citizens and non-citizens.
How We Can Help
Each stage carries real legal risk: a poorly drafted Project Design Document, a Community Development Agreement that misses what the Regulations require, or an Article 6 request submitted without understanding corresponding adjustments, can each delay a project by months. Clay & Associates Advocates advises project developers, landowners, county governments and investors on structuring carbon projects to meet Kenya’s regulatory requirements from the outset, negotiating community benefit-sharing arrangements that will withstand scrutiny, and navigating the DNA approval process at each stage. If you are developing, financing or buying into a carbon project connected to Kenya, we can review your documentation against the 2024 Regulations and advise on what still needs to be done before you can lawfully register or sell credits.
Sources: Climate Change Act, 2016 (as amended by the Climate Change (Amendment) Act, 2023), Kenya Law; Climate Change (Carbon Markets) Regulations, 2024, Kenya Law; National Environment Management Authority, “Kenya National Carbon Registry Launched”.
Frequently asked questions
Which body actually approves a carbon project in Kenya?
NEMA acts as Kenya’s Designated National Authority under the Climate Change Act and the 2024 Regulations. Its head functions as National Registrar, issues the letter of no objection and the letter of approval, and hosts the National Carbon Registry.
Do all carbon projects have to share revenue with local communities?
Only projects on public or community land carry the mandatory social contribution, forty percent for land-based projects and twenty-five percent for non-land-based projects, after deducting business costs. Projects on private land are exempt, though benefit-sharing remains common commercial practice.
What is required before a Kenyan project can generate Article 6 credits?
The proponent must apply to the DNA for authorisation of the international transfer of its mitigation outcomes, which the DNA can only grant with Cabinet Secretary concurrence, and a corresponding adjustment must be applied so the reduction is not counted twice.
How long does approval typically take?
The Regulations set internal deadlines, such as fourteen days for the letter of no objection and fourteen more for the letter of approval after committee review, but the proponent has up to twelve months to prepare the Project Design Document, so the full pathway commonly runs close to a year.
