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Charcoal Value Chain Analysis Within the Region Helps Identify the Main Actors and Understand Their Roles and Main Activities

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Charcoal Value Chain Analysis Within the Region Helps Identify the Main Actors and Understand Their Roles and Main Activities Ministry of Environment, Water and Natural Resources ANALYSIS OF THE CHARCOAL VALUE CHAIN IN KENYA FINAL REPORT | AUGUST2013 Copyright © 2013 This report was commissioned by the Kenya Forest Service (KFS), Coordinated by the National REDD+ Coordinating Office (NRCO) and carried out by Camco Advisory Services (Kenya) Limited. Appreciation goes to all the respondents interviewed in Nairobi, Kwale/Lunga Lunga, Kitui/Mutomo, Baringo and Kajiado as well as the KFS team at Karura and Ecosystem Managers in the 24 counties where charcoal data was available for providing useful charcoal and forestry data. The charcoal producers, transporters and dealers were especially useful in understanding the charcoal value chain including the challenges faced by various actors along the chain. ii Analysis of the Charcoal Value Chain in Kenya iii Analysis of the Charcoal Value Chain in Kenya Document type: Final Consultancy Report Client: Kenya Forest Service Client contact: Alfred Gichu Other details: National REDD+ Coordinator Date: iv Analysis of the Charcoal Value Chain in Kenya Table of Contents Table of Contents ........................................................................................................................................ v List of Acronyms ...................................................................................................................................... viii List of Tables and Figures ......................................................................................................................... ix Executive Summary ................................................................................................................................... xi 1 Introduction ........................................................................................................................................ 1 1.1 Objectives of the Study ................................................................................................... 1 1.2 Summary of the Approach and Methods ............................................................................ 1 1.3 Background ................................................................................................................... 2 1.3.1 Charcoal in the Kenyan Economy ............................................................................ 3 1.3.2 Charcoal Consumption.............................................................................................. 3 1.3.3 Charcoal Supply ........................................................................................................ 4 1.3.4 Raw Materials for Charcoal Production ................................................................... 5 1.3.5 Charcoal and Deforestation/Forest Degradation ....................................................... 5 1.4 The Charcoal Value Chain ............................................................................................... 6 1.4.1 Stakeholders along the Charcoal Value Chain.......................................................... 6 1.4.2 Charcoal Production technologies ............................................................................ 7 1.4.3 Charcoal Marketing ................................................................................................ 12 1.4.4 Taxation and Other Fiscal Measures Relevant to Charcoal .................................... 12 1.5 Comparative Analysis of Regional Charcoal Production Systems and Value Chains ..............13 2 Policies and Legislative Frameworks ............................................................................................. 15 2.1 Energy Act and Policy ...................................................................................................15 2.1.1 Revisions to the Energy Policy (2012) ................................................................... 15 2.2 The Forests Act (2005) and Draft Forest Policy (2007) ......................................................16 2.2.1 A Policy Response to the “Charcoal Problem”....................................................... 16 2.3 The Constitution of Kenya (2010) ...................................................................................17 2.4 Other Policies and legislative Frameworks Relevant to the Charcoal Industry .......................17 2.5 National Development Plans ...........................................................................................18 2.5.1 Vision 2030 – Long-term and Medium Term Plan ................................................. 18 2.6 Overview of specific projects, plans and programmes relevant to charcoal ...........................19 2.6.1 The Kenya Charcoal Policy Handbook................................................................... 19 2.7 Synergies and conflicts between existing plans, development policies and legislation and charcoal production ..................................................................................................................19 3 The Charcoal Value Chain .............................................................................................................. 21 v Analysis of the Charcoal Value Chain in Kenya 3.1 Overview .....................................................................................................................21 3.1.1 Charcoal production ................................................................................................ 21 3.1.2 Transportation and Marketing................................................................................. 27 3.1.3 Charcoal consumption ............................................................................................ 30 3.1.4 Briquette production from charcoal dust ................................................................ 32 3.2 Key Actors and practices along the charcoal value chain ....................................................33 3.2.1 Wood Production .................................................................................................... 34 3.2.2 Charcoal producers ................................................................................................. 35 3.2.3 Charcoal Transporters ............................................................................................. 38 3.2.4 Charcoal Vendors: Wholesalers and Retailers ........................................................ 40 3.2.5 Charcoal consumers ................................................................................................ 40 4 Economic Analysis of the Charcoal Value Chain .......................................................................... 42 4.1 Charcoal production Channels ........................................................................................42 4.2 Analysis of Selected Value Chains ..................................................................................48 4.2.1 Kajiado Value Chain ............................................................................................... 48 4.2.2 Baringo Value Chain............................................................................................... 49 4.3 Economic Analysis of the Charcoal Value Chains .............................................................49 4.3.1 Distribution of income along the value chain ......................................................... 51 4.3.1 Market Response to Charcoal Pricing ..................................................................... 52 The conclusion is that there is very limited market response to charcoal prices as it is entirely in under the control of the cartels. ........................................................................... 53 Main Challenges along the value chains ............................................................................... 53 5 Mapping Charcoal Hotspots ........................................................................................................... 56 5.1 Identification and Analysis of Hotspots ............................................................................56 6 Selected Case Studies ....................................................................................................................... 60 6.1 Charcoal Production by CPAs in Kwale County ................................................................60 6.2 Charcoal production by CPAs in Kitui Zone within Kitui County ........................................61 6.3 Documentation of illegal payments during charcoal transportation from Namanga to Nairobi .62 6.4 Charcoal import and export ............................................................................................65 7 Conclusions and Recommendations ................................................................................................... 66 7.1 Conclusions ................................................................................................................66 7.2 Recommendations ......................................................................................................68 7.2.1 General Recommendations ..................................................................................... 68 7.2.1 Specific Recommendations to Strengthen the Value Chain ................................... 69 vi Analysis of the Charcoal Value Chain in Kenya 8 References .......................................................................................................................................... 70 9 Annexes .............................................................................................................................................
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