quotes New carbon market platform to boost Saudi climate leadership

25 November 2024
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Updated 25 November 2024
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New carbon market platform to boost Saudi climate leadership

On the sidelines of the recently concluded climate conference COP29 in Baku, Azerbaijan, the Regional Voluntary Carbon Market Co. launched its voluntary carbon market exchange platform, with 23 Saudi and international companies participating on its first trading day.

To mark the launch, the core basket auction facilitated inaugural transactions, auctioning over 2.5 million tonnes of high-quality carbon credits at a clearing price of SR37.5 ($10) per tonne.

The credits linked buyers to 17 climate projects worldwide, with over three-quarters originating from Global South countries, including Bangladesh, Brazil, Ethiopia, Malaysia, Pakistan, and Vietnam.

The platform aims to boost the supply and demand for high-quality carbon credits across the Global South and beyond, channeling funding to climate projects in need of financing and supporting the transition to global net-zero emissions.

It also seeks to accelerate emission reduction efforts, attract significant funding for global climate projects, and enhance Saudi Arabia’s role in the carbon credit market by 2030.

The launch marks a major milestone in Saudi Arabia’s ambition to become one of the world’s largest voluntary carbon markets by 2030.

The company was founded in 2022 as a partnership between the Public Investment Fund, which owns 80 percent, and the Saudi Tadawul Group, which holds the remaining 20 percent.

The company’s creation aligns with the fund’s strategy to develop Saudi Arabia’s green economy in line with Saudi Vision 2030.

Additionally, the company has conducted two record-breaking voluntary carbon credit auctions — one in Riyadh and the other in Nairobi — selling over 3.6 million tonnes and driving regional demand. The company supports the fund’s goal of achieving net-zero emissions by 2050.

The fund is driving the investment and innovation needed to address climate change and support Saudi Arabia’s goal of achieving net-zero emissions by 2060.

High-quality CORSIA-eligible and Verra-registered carbon credits were offered at the company’s auction, enabling buyers from various sectors to contribute to reducing greenhouse gas emissions and making a positive impact on the climate.

In addition to the company’s platform, Saudi Arabia showcased its efforts at COP29 to strengthen global initiatives for addressing climate change, with a comprehensive and practical vision focused on reducing emissions through a range of technologies.

The Kingdom is becoming a leader in reducing and managing emissions through initiatives like the Saudi Green Initiative, which aims to increase vegetation cover, and the circular carbon economy concept, launched during its G20 presidency and adopted by G20 countries as a comprehensive framework to address greenhouse gas emissions.

Additionally, as a global leader in hydrocarbons, Saudi Arabia is emphasizing clean electricity production from solar and wind.

Desalination is powered by clean electricity to meet environmental goals and improve reliability — an effort aligned with Vision 2030, the nation’s transformation blueprint.

Saudi Arabia has pledged to reduce carbon dioxide emissions by 278 million tonnes annually by 2030, in line with the Paris Agreement.

— Talat Zaki Hafiz is an economist and financial analyst. X: @TalatHafiz