Kenya: Proposed Bill Threatens To Erode Gains in Clean Cooking Sector

  • Kenya’s Finance Bill 2020 proposes an introduction to VAT on items previously exempted under concessions accorded by the Cabinet Secretary.  
  • Particularly, the Bill introduces a VAT of 14% to clean cooking and solar products.
  • The move could see Kenyan households dig deeper into their pockets to pay for clean cooking solutions like Liquid Petroleum Gas (LPG) and improved cookstoves.

The clean cooking sector in Kenya has enjoyed fiscal incentives which have enabled millions of citizens to access clean cooking technologies and fuels. The introduction of VAT at the rate of 14% in proposed Finance Bill threatens to erode numerous gains that have been made toward the achievement of universal energy access by 2022 and Sustainable Development Goal (SDG) 7 which aims at ensuring access to affordable, reliable, sustainable and modern energy for all.

A study carried out in 2019 by CCAK (Clean Cooking Association of Kenya), showed that 58% of households still use the open fire method of cooking, 70% of households use biomass (firewood and charcoal) for cooking; while 19% of households use LPG. LPG adoption was at 3% a decade ago, zero-rating has made it more affordable to consumers, with the adoption increasing to 28% in 2020.

The global statistics paint a grim picture – nearly three billion people today do not have access to modern cooking products and services, with 4 million people dying annually due to indoor pollution caused by dirty fuels. According to the World Bank, “Despite three decades of efforts, access to clean cooking fuel and technologies has continued to be an issue with severe health, gender, economic, environmental, and climate impacts.”

To shed light on the issue and to lobby Parliamentarians to reject the proposed amendment, the ACCESS East African node – Kenya Climate Change Working Group (KCCWG) – convened a webinar that brought together Kenyan stakeholders in the clean cooking sector. These included CSOs, representatives from the private sector, Kenya Ministry of Energy, and the wider public.

During the webinar, ACCESS Coordinator, Jacqueline Kimeu, explained that in Africa, Kenya was a front runner in terms of adoption of renewable energy compared to neighbours such as Tanzania and Uganda, and this was attributed to the current fiscal incentives.  She noted that introducing VAT would not only impact the adoption of clean cooking products but that of solar as well. “The overwhelming majority of off-grid consumers and households who access their energy needs through solar-powered energy solutions come from lower-income, rural communities where VAT exemption on the products has played a critical role in increasing affordability.”

The panelists underscored the implications that would arise out of this amendment including: loss of jobs, the introduction of low-priced counterfeit products from unscrupulous manufacturers, as well as eroding investor confidence in the sector. Not to mention the probability that more Kenyans will resort back to unclean fuels – approximately 70 per cent of households in Kenya still use a type of woodstove as either their primary or secondary fuel, with a greater prevalence of 92 per cent in rural areas.

Update: The Bill is currently being debated and Kenyans are waiting to see what decision the parliamentarians take. The proposed Bill is set to become law by July 1st 2020.

ACCESS is collaborating with Hivos on a project that brings together government and CSOs to share experiences and learnings on how the policy environment is contributing or hampering progress towards achieving Clean Cooking and DRE targets in East, West and South Africa.

To read more on the Ghana workshop, click here.

Clean Cooking Association of Kenya (CCAK) Launch Sector Study

Submission by ACCESS member CCAK (Clean Cooking Association of Kenya). You can read more about their work on https://ccak.or.ke/

Clean Cooking Association of Kenya (CCAK) is a private, not for profit, business membership organization that represents the interest of clean cooking stakeholders by advocating for an enabling environment at both national and county level to catalyze the growth of the clean cooking sector and promote adoption of clean cooking technologies, capacity building of the sector and sector coordination.

On 5th November 2019 at the Clean Cooking Forum 2019 held at Radisson Blu Hotel (Nairobi), Cabinet Secretary for Energy, Hon. Charles Keter launched the Kenya Clean Cooking Sector Study Report, the country’s first-ever clean cooking study commissioned by the Ministry of Energy and the Clean Cooking Association of Kenya.

Photo credit: CCAK

The study offers a glimpse of the situation in Kenyan kitchens, providing answers to many questions raised about the clean cooking sector, and meets key data needs outlined in the SEforALL agenda. It provides a powerful baseline for the sector in 2018 showing the status of both household and market elements of cooking. The study show that 92% of the rural populations still rely on solid fuels as their primary fuel source.

This means that there is need to deeply look into the clean cooking sector and visualize a shift to alternatives for all populations, and especially vulnerable populations. Kenya commits to shift to clean cooking through development of efficient cooking solutions thereby projecting an abatement potential of 7.3MtCO2e by 2030 as a means to mitigating climate change. Using clean cooking solutions will support the move by the government to restore Kenya’s forest cover to 10% up from the current 7%.

In this regards, the report will guide the Ministry of Energy in decision making for the clean cooking sector. It will also guide the Inter Ministerial Committee on clean cooking in planning for all related activities. The report should be able to be shared to multi-sectorial and be read by policy makers, researchers and planners across all sectors, and by anyone interested in making a change in the clean cooking sector.\

The Association was registered in 2013 with a mission to facilitate the scaling up of the clean cooking Solutions in the Kenyan markets. CCAK strives to build solidarity amongst relevant stakeholders and create effective partnerships to ensure that the use of clean cookstoves and fuels is the norm in Kenyan households and institutions.