On 14th July 2025, the Office of the Special Climate Envoy of Kenya, under the Executive Office of the President and the GSMA hosted a high-level workshop on strengthening Kenya’s carbon markets. Held in Nairobi, the workshop convened over sixty stakeholders across Kenya’s carbon markets ecosystem, and focused on how mobile money and digital monitoring tools can strengthen transparency, improve traceability, and enable benefit sharing with communities. The workshop included contributions from carbon project developers, government stakeholders, regulatory bodies, mobile operators, academia, fintech innovators, and other development partners. This blog captures key themes that emerged during the workshop.
Carbon markets are fast becoming a pillar of climate finance in Kenya. Among African countries, Kenya ranks second only to the Democratic Republic of Congo in carbon-credit issuance. In 2024, Kenyan projects captured 23% of all voluntary-carbon-market revenue on the continent. While this is significant, Africa captured just 13% of global carbon credit issuances over the past decade. Kenya’s strong positioning in a globally underrepresented region makes its efforts to develop a robust carbon market significant, not only for its domestic ambitions, but also in setting a precedent for the continent.
On the policy front, Kenya has amended the Climate Change Act 2023 to allow for participation in the carbon markets and published the Climate Change (Carbon Markets) Regulations, 2024, to provide guidance on compliance. These efforts have helped the country link local mitigation activities to global capital flows while responding to rising global demand for high integrity. The government is also developing further regulations on carbon trading, non-market approaches along with a national carbon registry. As this regulatory foundation takes shape, two challenges remain central: strengthening measurement, reporting, and verification (MRV) systems and ensuring that climate finance meaningfully benefits the communities driving impact on the ground. This is precisely why this workshop was convened to explore how Kenya’s mobile money ecosystem, and other digital technologies, can bridge that gap.
The role of digital tools in carbon markets
Conventional MRV systems such as manual data collection, paper-based reporting, and linear verification processes have constrained the process, making it inefficient, often inaccurate and difficult to scale. To address these, a range of digital MRV (dMRV) solutions are being deployed globally, which include:
- Remote sensing and satellite imagery: Used to track deforestation, land-use changes, and environmental impacts at scale and overtime, enabling developers to identify viable project sites, estimate carbon stocks, and monitor environmental impact cost-effectively. Advanced sensors and high-resolution imagery can even estimate biomass at the tree level, improving precision in carbon stock assessments.
- AI/ML-powered modelling: Use of AI to simulate land management strategies and forecast carbon sequestration using environmental datasets (e.g., soil health, rainfall, land use).
- IoT sensors: Use of devices embedded in appliances or environments to collect real-time data on usage, emissions, or ecological variables. IoT enhances monitoring accuracy and reduces human error, for example, in clean cooking projects, IoT sensors can verify stove usage and efficiency to support accurate credit issuance. IoT sensors also enable early detection of anomalies such as deforestation.
- Cloud-based platforms and mobile applications: These facilitate data integration, remote access, and collaboration among developers, regulators, and verifiers. They support scalable storage and processing of large datasets such as satellite imagery and streamline workflows across dispersed geographies.
- Blockchain-based ledgers: Provides secure, auditable records for carbon transactions and project activities. Every transaction is digitally recorded and verified, preventing double counting and enhancing trust among buyers and verifiers.
Additionally, several adjacent digital tools are playing a critical role in strengthening transparency, efficiency, and market access across the carbon value chain. These include:
- Digital payments systems: Used to verify service delivery and enable transparent distribution of carbon revenues to end users.
- Data analytics and predictive insights: Used to forecast credit prices, assess environmental and financial risks and provide buyers with real-time insights into the impact and integrity of their portfolios.
- Digital marketplaces and automated trading systems: Used to match verified credits with suitable buyers, reducing transaction friction, enabling dynamic pricing, and improving access to capital for smaller, distributed carbon projects.
Application of digital solutions in Kenya’s carbon markets
Kenya is well positioned to make the switch to digital MRV, owing to its robust mobile infrastructure, vibrant tech ecosystem, and an increasingly supportive regulatory environment focused on carbon market integrity. Its now mature mobile money ecosystem has transformed how underserved populations save, invest, and manage their financial lives. Today, the ecosystem reflects a high level of maturity, with near gender parity and strong uptake across income levels and age groups. This widespread adoption and trust in digital financial services has laid the groundwork for mobile to unlock value in emerging areas such as carbon markets.
During the workshop, four organisations showcased how they are applying digital tools to strengthen MRV, boost market readiness, and broaden participation.
Solution focus: AI-powered satellite imaging
Offering: Planet Labs provides high-frequency earth observation data, combining satellite imagery with AI and ecological modelling to track environmental changes and land-use shifts. With some data archives dating back to as early as the 1970’s, their tools help carbon project developers identify viable sites, estimate forest carbon stocks, and monitor project impact over time. This strengthens the precision and credibility of land-based MRV systems.
Solution focus: Cloud-based carbon platform integrating IoT and digital finance to verify carbon credits
Offering: 4R Digital’s Carbon Value Exchange (Cavex) leverages IoT and M2M connectivity to capture real-time data from distributed climate solutions. This data is audited to generate accurate, traceable carbon credits recorded on a secure digital ledger.
Cavex also streamlines market access through an integrated trading interface offering buyers transparent pricing, project insights, and seamless transactions. The platform also facilitates micropayments via mobile money, ensuring carbon revenue reaches last-mile actors, enabling local reinvestment and unlocking smaller, distributed projects that have historically struggled to access carbon finance.
Solution focus: IoT-enabled refrigeration
Offering: Koolboks leverages digital technology and renewable energy to provide cooling solutions that are affordable, sustainable, and designed for off-grid and underserved communities. Koolboks also retrofits existing fridges, enabling carbon credit data capture, validated through a partnership with Cavex. Koolboks also integrates flexible financing and remote monitoring via its Koolbuy platform, making cold-chain solutions more accessible to SMEs.
Solution focus: Aligning Kenya’s carbon credit supply with global market demand.
Offering: CAMAK is addressing Kenya’s carbon market gaps through a suite of solutions, including contributing to the development of the national carbon registry, a guarantee fund to de-risk investments, and a government-backed policy framework. These efforts aim to create a more transparent, investable carbon market. CAMAK is also rolling out a Carbon Readiness Lab with the goal of training over 100 project developers to navigate and adopt emerging dMRV and registry systems.
Key lessons from the workshop
Digital infrastructure without system-level integration reinforces fragmentation
Kenya has a wealth of digital and financial infrastructure, including the eCitizen service portal, a well-established mobile money ecosystem, robust data systems managed by the Kenya National Bureau of Statistics (KNBS), investment facilitation tools like the Kenya Investment Authority, and a formal capital market anchored by the Nairobi Securities Exchange.
While these platforms offer the potential to support dMRV and carbon market operations, workshop participants noted that these systems offer little to no interoperability There’s an opportunity to build Kenya’s Carbon Markets national registry in line with international standards (specifically, UNFCCC guidelines), and to invest in open-source digital MRV tools that can be adopted, customised, and scaled across Kenya’s existing digital infrastructure. Without deliberate integration through APIs and coordinated governance, siloed digital interventions risk reinforcing fragmentation rather than enabling a coherent carbon ecosystem.
Carbon markets can’t scale if people don’t understand them
Participants noted that many communities remain unsure what carbon markets/credits are, whether their involvement translates into meaningful impacts or how benefits are calculated. This often stems from late consultations and a lack of tools to engage communities; making inclusion feel procedural rather than participatory. Digital financial literacy also emerged as a critical gap where communities ought to understand what green savings are, how mobile-based carbon payouts work, and what digital records mean for their livelihoods. The importance of engaging communities before financial benefits materialise was emphasised for ownership, expectations, and understanding to grow together.
Participants recommended localising digital solutions by co-creating with the community, translating materials into indigenous languages, and eliminating technical or financial jargon. They also proposed a carbon literacy campaign, led jointly by MNOs, community-based organisations, and local media. Tools like the JazaMiti app, which encourages tree planting, or KPLC’s Pika na Power campaign, which aims to promote electric cooking among KPLC customers, were highlighted as promising models for building digital and financial literacy.
Unlocking private sector participation requires early engagement
Kenya’s mobile operators and tech innovators already deploy the IoT, cloud, and payment rails that could accelerate dMRV. Yet many of these actors, alongside financial institutions and impact investors, report being drawn into policy or platform design only after key decisions are already made. Workshop participants called for more transparency about decision making and design processes and emphasised that the private sector and financial institutions should be consulted at the earliest stages of policy and platform design.
Such early involvement could address a major constraint in Kenya’s carbon markets: a lack of financial instruments for pre-financing carbon projects. High upfront costs are a key barrier as revenues often follow many years later, leaving project implementers financially exposed, and beneficiaries apprehensive. Financial institutions and impact investors can play a catalytic role by co-developing tailored financial instruments, such as bridge financing, pre-paid credit models, and carbon-backed insurance products, that align with project realities and unlock capital flows at the stages where it is most needed.
To scale carbon markets, Kenya must prioritise regulatory clarity and alignment
Kenya has made progress in establishing a carbon market framework, but challenges in interpreting policies, limited awareness, and gaps in institutional infrastructure are slowing implementation and delaying investment. Stakeholders raised concerns about ongoing uncertainty around critical issues such as taxation, particularly the lack of clarity on what portion of revenue remains taxable by the Kenya Revenue Authority after fulfilling the mandatory social contributions. Under the 2024 Carbon Markets Regulations, land-based projects are required to allocate 40% of their earnings to community development, while non-land-based projects must contribute 25%, with an additional 25% directed to the Climate Change Fund. Without clarity, developers face difficulty structuring projects, communities lack confidence, and regulators struggle to enforce standards. Conflicting mandates between agencies further compound delays and blur accountability. To address this, participants called for the development of clear, practical guidance to support implementation at county and project levels.
Charting the way forward
The workshop highlighted the pivotal role of digital platforms and the growing potential of mobile money in advancing dMRV in Kenya. Kenya is well-positioned to leverage digital infrastructure for core functions such as data collection, verification, and benefit sharing. The country already has many of the necessary building blocks, expansive mobile infrastructure, policy momentum, and a growing network of engaged public and private actors. The opportunity now is to translate this potential into a coherent and inclusive ecosystem. This means building interoperable systems, fostering public trust and digital literacy, translating national policy into practical local action, and designing carbon markets that deliver both equity and efficiency.
Kenya is positioning itself as a leader in shaping credible, investable carbon markets through strategic international partnerships. It has signed bilateral emissions trading agreements with Sweden and Switzerland under Article 6 of the Paris Agreement, and launched the Coalition to Grow Carbon Markets alongside the governments of Singapore and the UK. Domestically, Kenya has partnered with GGGI and the EU to address policy and regulatory bottlenecks that limit the effectiveness of the carbon markets. The collaboration, led by the Ministry of Environment, Climate Change and Forestry, will work to upgrade the MRV system, define a whitelist, develop a broader carbon markets (Article 6) strategy, and strengthen capacity —with coordinated support from development partners. In addition, the Office of the Special Climate Envoy, through its partnership with the Clean Cooking Alliance and with the support of the VCMI, is exploring regulatory reforms in Kenya’s financial sector that could unlock much-needed local financing for high-impact carbon projects.
We look forward to working closely with the Office of the Special Climate Envoy on promoting an enabling environment for impactful, inclusive, and transparent carbon projects. Kenya is uniquely positioned to not only benefit from digitally enabled climate finance, but to become a continental leader actively shaping global norms and best practices. We will also continue to work closely with startups, emerging platforms, mobile operators and enabling organisations to support them to effectively navigate opportunities in Kenya’s carbon market and build impactful partnerships. Finally, we also seek to share lessons from our engagements in other countries that show how countries across the world are promoting and leveraging DMRV in carbon market regulation and development.
The GSMA ClimateTech Programme has released a new guide that helps startups navigate the voluntary carbon market (VCM). The guide is accompanied by a Carbon Credits Breakeven Calculator to help start-ups estimate the viability of carbon finance for their business models. Click here to explore the guide and calculator. We will also be hosting a live webinar on Wednesday, 17 of September to introduce the guide Click here to register
This initiative is currently funded by funded by UK International Development from the UK government and the Swedish International Development Cooperation Agency (Sida), and is supported by the GSMA and its members.
