Electric mobility companies in Kenya are turning to carbon finance as a new revenue source to supplement their sales of vehicles and motorcycles.
Industry players in the electric two-wheeler and bus segments say they are working on monetising their carbon savings, by trading in carbon credits –an emerging revenue stream.
Carbon offsetting allows companies to earn income by reducing or avoiding greenhouse gas emissions, which can then be sold as credits to polluters looking to compensate for their own emissions.
By displacing petrol and diesel engines with electric vehicles, electric vehicles (EV) firms reduce carbon dioxide emissions, qualifying them for participation in this growing market.
The E-Mobility Association of Kenya (EMAK) says its members are actively pursuing carbon finance strategies to boost their revenue.
“Different members are taking different approaches to carbon financing, but it’s definitely an area we’re interested in. We’ve educated our members on the potential, and a number of initiatives are already underway,” said EMAK vice president Moses Nderitu, who is also the chief executive of electric bus company BasiGo.
BasiGo is among the most advanced in the carbon finance space, with plans to begin trading verified carbon credits by the end of the next quarter.
The firm is currently undergoing certification with the Geneva-based Gold Standard, a leading global body for climate and sustainable development standards.
“As BasiGo, we opted for the voluntary carbon market, where credits must be independently verified. We’re at the tail end of that process and we might start by next quarter,” said Mr Nderitu.
Since its launch in 2021, BasiGo says it has saved 2,055 tonnes of carbon emissions —credits that could fetch about Sh2.5 million at the current market rate of Sh1,218 ($9.4) per tonne.
Other local EV firms are also exploring the voluntary carbon market. Roam, known for its electric two-wheelers and pilot e-bus models, is preparing to leverage the voluntary carbon finance to support its operations. Meanwhile, Spiro —another key player in the electric motorcycle space— has saved an estimated 32,796 tonnes of carbon emissions and is pursuing a different route.
Spiro is working with government agencies to tap into the carbon market under Article 6 of the Paris Agreement, which enables countries to trade emission reductions between governments.
“In the voluntary market, Africa’s carbon credits are undervalued. So, we’re engaging European partners for better pricing, but we’re also eyeing the government-to-government option now that Article 6 has gone live,” said Spiro CEO Kaushik Burman.
Carbon credits, he added, will help offset those rising costs and stabilise pricing. BasiGo, for instance, says it has always factored carbon financing into its lease pricing and expects the funds to bring further cost relief to customers.
Companies whose core business involves heavy carbon emissions, especially in the oil, aviation, and transport industries, are the top buyers of carbon credits in efforts to become “net-zero” in their operations, to mean that they emit less than they save.
In Kenya, the Kenya Electricity Generation Company (KenGen) and cooking stove maker Burn are among the companies that have so far commercialised emissions savings through carbon trading.
Majority of the carbon trading projects in Kenya are nature-based, such as forest conservation or tree-planting, but there is yet to be any in the energy efficiency space, where the EV firms are seeking.
