Article 4: Implementing Article 6.2 and DNA Authorization to Prevent Double Counting

Under Article 6.2 of the Paris Agreement, countries can engage in bilateral trade of carbon credits, formally referred to as **Internationally Transferred Mitigation Outcomes (ITMOs)**. For international buyers and multinational corporations, acquiring ITMOs from sovereign nations like Kenya is a highly attractive pathway to meeting compliance targets.

However, bilateral trading introduces a massive integrity challenge: **Double Counting**. If Kenya claims a carbon credit to meet its Nationally Determined Contributions (NDCs) under the Paris Agreement, and a corporate buyer in Europe claims that same credit to offset their emissions, the environmental integrity of the global carbon market collapses.

The Role of the DNA and the Letter of Authorization

To prevent double counting, the Kenya Climate Change (Carbon Markets) Regulations 2024 establish a rigorous authorization framework overseen by the **Designated National Authority (DNA)**.

Before any carbon credits can be exported as ITMOs and transferred to a foreign registry:

• Mandatory Letter of Authorization (LoA): The project developer must secure a formal Letter of Authorization issued directly by the DNA. This LoA legally indicates that the Kenyan government approves the export of the specified mitigation outcomes.
• Triggering Corresponding Adjustments: By issuing the LoA, the Kenyan state formally commits to executing a **Corresponding Adjustment**. This is a sovereign accounting entry where Kenya subtracts the transferred carbon credits from its national emissions balance, ensuring it does not count them toward its own NDCs.

What This Means for International Buyers

For international enterprise brokers and compliance buyers, purchasing unauthorized carbon credits (non-ITMOs) carries immense risk. Under emerging corporate reporting frameworks (such as the European Corporate Sustainability Reporting Directive - CSRD), companies are increasingly restricted from claiming carbon avoidance offsets that do not have sovereign corresponding adjustments. Buying credits without an LoA invites greenwashing accusations and regulatory audits.

Proving that credits have been authorized and properly adjusted by the DNA is therefore critical to capturing premium pricing.

Securing the Article 6 Value Chain

Kipimo's Enterprise Broker tier provides international buyers with a secure due diligence dashboard to verify these DNA transactions. Proponents log their Letters of Authorization, and the ledger tracks corresponding adjustment indicators. This transparent proof chain guarantees to compliance officers that the credits bought are legally recognized as ITMOs and safe from double counting.