Market Continues to Digest Koko’s Collapse, Kenyan CORSIA Supply Implications

Why It Matters

The collapse removes up to 10% of anticipated CORSIA supply, tightening market liquidity and exposing regulatory risk for emerging carbon projects, while highlighting host‑country NDC constraints and a shift toward voluntary‑market standards.

Key Takeaways

• Koko’s Kenya unit entered insolvency after LoA denial
• CORSIA Phase 1 credit price fell to $15.90/tCO2e
• New supply from ten projects doubled market volume
• Cookstove firms shift to ICVCM CCP accreditation
• Kenya launches national carbon registry amid authorisation uncertainty

Pulse Analysis

The Koko Networks episode underscores how fragile emerging carbon‑offset projects can be when host‑government approvals lag. Kenya’s refusal to grant a Letter of Approval not only stalled a project that could have contributed up to 20 million tCO2e to CORSIA Phase 1, but also triggered an insolvency filing that sent market participants scrambling for clarity. This regulatory bottleneck revealed the tension between a country’s ambition to meet its NDC targets and the desire to export credits, a balance that many developing economies are still negotiating.

Across the broader carbon market, the loss of Koko’s anticipated supply coincided with a surge in new projects, expanding total available credits from roughly 17.5 million to 32 million tCO2e within weeks. The influx, combined with airlines’ cautious purchasing patterns, drove CORSIA spot prices down to $15.90 per tonne, despite earlier peaks above $23.00. In response, several Kenyan cookstove developers have pivoted toward the Integrity Council of the Voluntary Carbon Market’s Core Carbon Principles, seeking higher‑priced, CCP‑tagged credits that command $15‑18 per tonne, a stark contrast to the sub‑$3 levels of legacy credits.

Kenya’s launch of a national carbon registry signals a strategic effort to streamline future authorisations and create a transparent whitelist of eligible project types. By integrating marginal abatement cost curves and clearer accounting rules, the registry aims to reduce uncertainty for both project developers and international buyers. For investors, the evolving landscape suggests that due diligence must now factor in host‑country policy stability, methodology updates—such as the shift from TOOL 30 to TOOL 33 for fNRB calculations—and the growing relevance of voluntary‑market standards as a hedge against regulatory setbacks.