Kenya reinstates tax exemptions on clean energy products to catalyze investment

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Kenya has reinstated tax exemptions on a number of clean energy products, handing relief to the sector that has seen uptake decline since the levies were introduced two years ago.

“The reinstatement is critical to achieving the country’s climate and development goals. This decision aligns with the government’s aim to achieve universal access to clean cooking solutions by 2028,” said David Njugi, the chief executive of Clean Cooking Association of Kenya (CCAK), in a statement Friday.

The clean cooking fuels that will be exempted from 16 percent value-added tax (VAT) after the Finance Act 2021 came into effect on July 1 are biogas and biogas equipment, sustainable fuel briquettes, and ethanol.

Residents, however, will pay more for improved cookstoves and liquid petroleum gas (cooking gas), whose price rose by 350 shillings (about 3.2 U.S. dollars), from July 1.

Njugi said the exemptions will catalyze investments in the clean cooking sector and ensure the fuels are affordable to many households.

With an estimated 18 percent of households in Kenya currently using clean fuels, Njugi said Kenya must rapidly expand access to clean cooking solutions to achieve the ambitious goal. Enditem

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