Saudi Arabia buys the largest number of carbon credits in a global auction and its role in addressing the effects of climate change

Weather of Arabia - Saudi companies purchased the largest number of carbon credits in the largest global auction carried out by the "Regional Voluntary Carbon Market" company.

The Carbon Market Company - owned by the Saudi Public Investment Fund - succeeded in selling 2.2 million tons of carbon credits, in the largest carbon credit auction held in the Kenyan capital, Nairobi.

Carbon credits are one of the means offered globally to enable companies to contribute to achieving carbon neutrality, and ensuring carbon emissions are reduced in value chains.

Demand for carbon offsets, which are generated through projects such as afforestation or the use of clean cooking fuels, is expected to grow as companies seek to use the credits to help them meet the net-zero goal.

Details of the largest auction of carbon credits

The auction - the second event implemented by the regional voluntary carbon market company - witnessed the offering of high-quality carbon credits that are compatible with CORSIA standards and registered with the VERA organization, which contribute to enabling companies operating in various sectors in the region to play their role in participating in reaching carbon neutrality goals.

16 regional and international companies participated in the largest auction of carbon credits. Aramco, the Saudi Electricity Company, and Inowa (a subsidiary of NEOM) purchased the largest number of carbon credits.

A number of companies also participated in the auction, including “Saudi Aramco, the International Islamic Trade Finance Corporation, Inoa affiliated with NEOM, the Olayan Company, the Saudi National Bank, the Gulf International Bank, Saudi Airlines, the Saudi Basic Industries Corporation (SABIC), Abdul Latif Jameel, and a company. Saudi Arabian Mining Company "Ma'aden", the Saudi Electricity Company, the Saudi Telecom Company, the Saudi Golf Company, and the Yanbu Cement Company.

The regional voluntary carbon market company, which is organizing the auction, said that the companies paid 23.50 Saudi riyals ($6.27) for each metric ton of carbon credits, according to data seen by the specialized energy platform, quoting the Saudi Press Agency.

It is noteworthy that the Saudi Investment Fund, in cooperation with the Saudi Tadawul Group, established the “Regional Voluntary Carbon Market” company, to provide the necessary guidance and resources to support business sectors in the Middle East and North Africa region, and to help them play their role in the global transition efforts to carbon neutrality.

Carbon credit projects

Bidded carbon credits cover 18 projects, including a variety of projects that avoid and remove carbon emissions, and about three-quarters of the projects are concentrated in the Middle East, North Africa and sub-Saharan Africa, including projects in Kenya, Burundi, Rwanda, Morocco, Uganda and Egypt South Africa.

Carbon credits have helped fund clean and improved cookstove supply and renewable energy projects in these countries.

The Regional Voluntary Carbon Market Company has signed two memorandums of understanding: the first with EverReady East Africa and the Carbon Vista Fund, with the aim of developing high-quality and impactful carbon projects in Kenya, Nigeria and beyond.

The two agreements reflect the shared commitment between the Regional Voluntary Carbon Market and key African institutions.

Coping with the effects of climate change

The CEO of the Regional Voluntary Carbon Market, Reham El-Gizy, stated that the Regional Voluntary Carbon Market will use all available tools to face the challenge of climate change and its impacts.

She noted that the auction demonstrates the important role that voluntary carbon markets play in directing financing to projects that are most needed to advance climate action.

She said: “Today we successfully held the largest auction of high-quality carbon credits, and we sold more than 2.2 tons of carbon credits.. We had previously sold 1.4 million tons of carbon credits in the auction we held in October of the year the past".

She added: “Our goal is to become one of the largest voluntary carbon markets in the world by 2030, a market capable of offsetting hundreds of millions of tons of carbon emissions annually, and in pumping financing into projects that confront climate change and improve living standards in the countries of the global south.”

She stated that the company's achievements to date "reflect our commitment to long-term success, and the extent of its ability to achieve its ambitions."

The mission of the Regional Voluntary Carbon Market Company is to establish a robust market capable of issuing, trading and using carbon credits in the MENA region and will be instrumental in facilitating the transition to a low carbon global economy.

Source: energy