The company, which supplied subsidised bioethanol cooking fuel to an estimated 1.5 million households, ceased operations at the end of January 2026 after the government declined to issue a Letter of Authorisation required for the international sale of carbon credits. The decision effectively crippled Koko’s business model, which depended on carbon revenue to keep clean fuel affordable for low-income urban households.
Koko operated more than 3,000 automated fuel dispensing machines across informal settlements and towns, supported by thousands of last-mile agents. With the shutdown, not only have direct jobs been lost, but thousands of agents are also left without income, while households are now expected to revert to charcoal and kerosene, a move experts warn could worsen indoor air pollution, increase carbon emissions, and accelerate deforestation.
Sources familiar with the matter say the company’s board reached the decision after emergency meetings, concluding that operations were no longer financially viable without access to higher-value international carbon markets allowed under Article 6 of the Paris Agreement, which requires host government approval.
Customers bought a Koko Cooker, a two-burner ethanol gas stove, and refilled their smart canisters at nearby Koko Points installed in local shops and neighborhood outlets. Households could top up fuel via mobile money (e.g., M-Pesa), then take the canister home to use in the stove. This system allowed families to cook with clean fuel that was often cheaper and much less polluting than charcoal or kerosene.
Beyond the social and environmental impact, the closure could also expose Kenya to a potential liability of up to Ksh23.18 billion.
Energy and climate policy experts say the company’s collapse highlights the fragile balance between innovation and regulation. Once viewed as a flagship success in African climate-tech, the company’s fall underscores how bureaucratic delays and unclear approval processes can derail ventures that blend social impact with carbon finance.
As former employees and agents grapple with uncertainty, attention is now turning to whether Kenyan authorities will review their approach to carbon markets to prevent similar outcomes.
