Saudi Arabia Launches First Voluntary Carbon Credit Exchange Platform at COP29
Listen to this story:
|
- Saudi Arabia’s Regional Voluntary Carbon Market Company (RVCMC) unveiled the first carbon credit trading platform at COP29, supported by a significant auction involving 22 companies and offering 2.5 million certified carbon credits.
- This initiative is part of Saudi Arabia’s Vision 2030 plan to diversify its economy and boost renewable energy investments, despite its ongoing reliance on oil revenues.
- The move aligns with a growing Middle Eastern push towards carbon market participation, with efforts to address market confidence issues amidst criticisms of voluntary carbon credit quality.
Saudi Arabia, the world’s largest oil exporter, marked a significant milestone in its environmental strategy by launching its first carbon credit exchange at the UN Climate Change Conference (COP29) in Baku on November 12. Managed by the Regional Voluntary Carbon Market Company (RVCMC), the platform is designed to strengthen the voluntary carbon market as the country pushes for economic diversification under its Vision 2030 plan.
Building Market Infrastructure Riham ElGizy, CEO of RVCMC, emphasized at the conference:
“Our message at COP is clear: accelerating global decarbonization requires unlocking financial flows for climate projects at scale. High-integrity voluntary carbon markets can play an important role in reducing the climate finance gap this decade. However, realizing the market’s potential requires institutional infrastructure that will enable greater private sector participation.”
RVCMC, supported by Saudi Arabia’s Public Investment Fund (PIF) (80%) and the Saudi Tadawul Group (20%), leverages the kingdom’s investment in renewables, including solar projects, to achieve carbon neutrality by 2060.
RELATED ARTICLE: Saudi Arabia Secures $9.8B in Private Investments for Sustainable Agriculture Projects
Launch Auction Details The platform’s debut featured an auction involving 22 companies from Saudi Arabia and other nations. This event offered 2.5 million high-quality carbon credits certified by Verra, Gold Standard, and Puro.earth, covering projects dating from 2020 onwards. These credits predominantly originated from Global South countries like Bangladesh, Brazil, Ethiopia, Malaysia, Pakistan, and Vietnam.
This marks RVCMC’s third carbon credit auction, following previous successful auctions in Nairobi and Riyadh. In 2023, RVCMC sold 2.2 million metric tons of carbon credits in Kenya, underscoring Saudi Arabia’s ambition to solidify its presence in the carbon sector.
Market Challenges and Future Prospects Despite this progress, the voluntary carbon market faces challenges due to concerns over the quality of some carbon projects, affecting liquidity and offset prices. However, experts are optimistic that integrity measures in development will rejuvenate market trust.
According to data from Platts, part of S&P Global Commodity Insights, the value of carbon credits varies widely, ranging from $3.85 per metric ton for household device offsets to $125 per metric ton for technological carbon capture offsets.