Saudi Arabia launches ‘voluntary carbon market’ exchange to finance climate projects

0
21

The Voluntary Carbon Market exchange connects buyers to a group of 17 climate projects around the world.

Saudi Arabia launched the stock exchange Voluntary carbon market “to finance climate projects as the Kingdom transitions to a low-carbon economy.

She said Regional Voluntary Carbon Market Company(RVCMC), backed by Saudi Arabia’s Public Investment Fund (PIF),PIF), and the Tadawul Group, said it will auction more than 2.5 million tons of “high-quality” carbon credits on the Voluntary Carbon Market exchange platform on Tuesday, it said in a statement.

17 climate projects around the world

The Voluntary Carbon Market exchange connects buyers to a diverse group of 17 climate projects around the world, mostly in developing countries in the Global South such as Bangladesh, Brazil, Ethiopia, Malaysia, Pakistan and Vietnam.

The exchange also connects buyers to a US-based project focused on capturing carbon dioxide and incorporating it into fresh concrete.

22 Saudi companies in the “Voluntary Carbon Market” stock exchange

The Regional Voluntary Carbon Market Company (RVCMC) said that 22 Saudi and international companies are participating in the launch of the “Voluntary Carbon Market” exchange, including some subsidiaries of Saudi Aramco, the petrochemical company “SABIC”, and the Red Sea International Company.

The announcement comes a day after countries at the COP29 climate summit in Baku, Azerbaijan, agreed to new standards for carbon credit quality, which is crucial to launching the UN-backed global carbon market.

The role of voluntary carbon markets and climate finance

“Highly-integrity voluntary carbon markets can play an important role in bridging the climate finance gap this decade,” said Reham El-Geizy, CEO of the Voluntary Carbon Market Exchange.

“However, an institutional infrastructure must be created to help buyers and sellers increase private sector participation and realise market potential,” she added.

The first voluntary auction for the carbon market in the Kingdom

The Regional Voluntary Carbon Market Company (RVCMC) launched the first voluntary carbon market auction in 2022 in Riyadh, selling 1.4 million tons of credits.

It later broke its own record by selling 2.2 million tonnes at auction last year in Nairobi, Kenya.

Saudi Arabia, which has set a net zero target for 2060, and with the launch of a “voluntary carbon market” exchange, aims to become one of the largest voluntary carbon markets in the world by 2030.

$250 billion carbon offset market

Morgan Stanley estimates that the value ofVoluntary carbon offset marketIt will grow from $2 billion in 2020 to $250 billion by 2050.

However, the industry has faced criticism over the lack of transparency and the quality of some projects.

Some argue that carbon offsets allow certain sectors to continue polluting the environment.

Saudi Arabia is also establishing a national emissions compliance system.

The world’s first voluntary carbon market

The European Union’s Emissions Trading Scheme, launched in 2005, was the world’s first carbon market and remains among the largest in the world.

It covers emissions from electricity generation, heat, industrial manufacturing and aviation, sectors that account for about 40% of the bloc’s greenhouse gas emissions.

The EU’s carbon border adjustment mechanism will come into force in 2026.

This mechanism will impose a carbon price on imports of carbon-intensive products such as steel, cement and hydrogen, ensuring fair competition for European industries.

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here