Changes in carbon market rules threaten Kenya's Sh80b revenue
Business
By
Amos Kiarie
| Apr 27, 2026
Kenya is at risk of losing billions of shillings in climate financing through carbon credit funding as global buyers seek to raise the bar and move away from low-quality carbon offsets. The shift has been triggered in part by Microsoft, the world’s largest corporate buyer of carbon credits, which is tightening its standards and demanding more credible, transparent projects.
This change could shut out projects that fail to meet stricter verification requirements, locking them out of the most valuable opportunities in the global carbon market.
Kenya’s carbon market is currently valued at about Sh80 billion ($629.8 million) and is projected to surge up to Sh580 billion ($4.49 billion) by 2032, making it one of the country’s fastest-growing green investment frontiers. The country already accounts for roughly 23 per cent of Africa’s voluntary carbon credit value.
But even as the sector expands, the rules of the game are changing. Microsoft, which has become the single most influential buyer in the voluntary carbon market, is now prioritising high-integrity carbon removals credits which are backed by strict monitoring, reporting, and verification while reducing reliance on lower-quality offsets.
For emerging markets like Kenya, the message is clear: Access to global carbon finance will increasingly depend on credibility, not volume.
READ MORE
'Joint venture in reverse': foreign carmakers seek edge with China partners
Why Equity Bank has been named overall best bank
Fintech leaders, regulators meet as stablecoins gain ground
Private developers eye deeper presence in Coast region
CS Kabogo: Digital economy now established, focus shifts to governance and accountability
How Ruto's aggression over fuel prices with EAC neighbours strains ties
Ruto opts for electric cars to escape high fuel prices
Kenya, Netherlands moot corridor to link EAC and Europe
Coastal property developers bank on Badawy to spearhead expansion strategy
Kenya to host Africa's digital economy summit as push for unified market intensifies
“The market is no longer buying promises; it is buying proof. We are seeing a shift from volume to credibility,” said Kibet Kirui, Legal and Operations Director at Carbon Wise Africa.
Kirui said the African carbon markets face persistent concerns around project integrity, double counting, weak community benefit frameworks, and unverifiable baselines, and as the global buyers tighten the standards, these become exclusionary risks.
For Kenya, this shift presents a stark choice: Upgrade standards and capture premium value or risk losing market access altogether.
Carbon projects generated more than Sh60 billion in 2024, underlining their growing role in the economy. But sustaining that momentum will require significant investment in monitoring, reporting and verification (MRV) systems, as well as clear legal frameworks governing carbon ownership and benefit-sharing.
“This is not just an environmental issue; it is an economic one. If we fail to meet integrity standards, we risk losing both market access and value,” Kirui said.
Kenya has built a strong position in the sector, issuing more than 52 million carbon credits and hosting over 60 registered projects.