{"id":6658,"date":"2026-02-10T16:33:24","date_gmt":"2026-02-10T15:33:24","guid":{"rendered":"https:\/\/news.infotekps.com\/index.php\/2026\/02\/10\/koko-failure-brings-cookstove-carbon-credit-model-into-question\/"},"modified":"2026-02-10T16:33:24","modified_gmt":"2026-02-10T15:33:24","slug":"koko-failure-brings-cookstove-carbon-credit-model-into-question","status":"publish","type":"post","link":"https:\/\/news.infotekps.com\/index.php\/2026\/02\/10\/koko-failure-brings-cookstove-carbon-credit-model-into-question\/","title":{"rendered":"KOKO failure brings cookstove carbon credit model into question"},"content":{"rendered":"
\n

KOKO Networks, one of Africa’s largest clean cooking companies, entered administration on 1 February, after the Kenyan government refused to provide the regulatory approval it needed to sell carbon credits on international compliance markets.<\/p>\n

KOKO Networks was financed by several well-known investors, including Microsoft, investment manager Mirova and Rand Merchant Bank, and was backed by a World Bank investment guarantee. Its sudden collapse jeopardises more than 700 jobs and will affect more than one million households that relied on the company for their supply of ‘clean’ bioethanol.<\/p>\n

More broadly, the demise of the company will dent hopes that carbon credits can help finance the rollout of clean cookstoves needed to tackle one of Africa’s largest public health and environmental problems.<\/p>\n

KOKO’s business model rested on providing cookstoves and clean cooking fuel to consumers at a highly subsidised price. This was to be made possible by the sale of carbon credits.<\/p>\n

Under the aviation industry’s CORSIA mechanism, airlines around the world will be required to purchase carbon credits from late 2027. KOKO therefore expected to be to take advantage of guaranteed demand for credits from CORSIA, as well as similar mechanisms under Article 6 of the Paris Agreement.<\/p>\n

For this to happen, however, the Kenyan government would need to provide a regulatory approval known as a ‘letter of authorisation’ (LoA). After waiting for a lengthy period without the government signing-off on the LoA, and no longer able to subsidise its bioethanol supply, the company was forced into administration.<\/p>\n

There has been considerable speculation about the reason for the government’s refusal to provide the LoA. Lee Kinyanjui, the cabinet secretary for trade and industry, told<\/a> local media on Monday that the government refused the LoA because KOKO would have taken up the entire share of credits Kenya could sell internationally.<\/p>\n

“The business model did not align,” he said, noting the company’s carbon credit issuance would “mop up everything that Kenya would otherwise do”.<\/p>\n

Fragile economics<\/h2>\n

The lack of access to clean cooking is widely agreed to be a major social and environmental problem. According to the International Energy Agency<\/a>, indoor air pollution from burning dangerous fuels causes up to 815,000 premature deaths per year in Africa. The use of firewood for cooking is also a driver of deforestation.<\/p>\n

While in theory switching to cleaner cooking methods helps to preserve forest carbon stocks and also lowers household clean emissions, confidence in the use of cookstove carbon credits has waxed and waned.<\/a><\/p>\n

A peer-reviewed study<\/a> published in 2024 investigated a sample of cookstove projects that were found to have overstated their carbon removal benefits by almost 1,000%.<\/p>\n

Various organisations within the carbon markets ecosystem, including well-funded companies like KOKO, have put considerable effort into developing new methodologies designed to be more robust in accurately calculating emissions reductions. The idea is that both voluntary buyers and customers required to offset emissions would then have sufficient confidence to purchase clean cooking credits.<\/p>\n

The fundamental problem for KOKO proved to be its dependence on securing the cooperation of the Kenyan government as it sought to navigate the complex and ever-shifting world of carbon credits.<\/p>\n

In a statement, Jacqueline Novogratz, founder of climate investment firm Acumen said the collapse of KOKO Networks “should stop us in our tracks”.<\/p>\n

“This latest failure exposes a hard truth: markets that serve low-income communities cannot be built on fragile economics alone,” she said. “It’s time for a more honest conversation about what it takes to build markets for low-income people.”<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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