A new coalition of UAE companies has been established to develop and grow a carbon market in the Emirates.
The newly established UAE Carbon Alliance, launched by the UAE Independent Climate Change Accelerators (UICCA), will help support the transition of companies to a green economy, as set out in the UAE Net Zero by 2050 Strategic Initiative.
A carbon market is a trading system in which carbon credits are bought and sold.
Companies or individuals can use such markets to compensate for their greenhouse gas emissions by purchasing carbon credits from groups that remove or reduce greenhouse gas emissions.
Last year, The Abu Dhabi Global Market, the UAE capital's financial free zone, announced plans to team up with AirCarbon Exchange (ACX) to create the “world’s first fully regulated” carbon trading exchange and clearing house in the emirate.
Chaired by Sheikha Shamma bint Sultan, president and chief executive of UICCA, the UAE Carbon Alliance is made up of companies from various sectors that recognise the importance of carbon credits in achieving net-zero goals.
The alliance’s founding members are ACX, First Abu Dhabi Bank, Mubadala Investment Company, Abu Dhabi National Energy Company and Abu Dhabi Future Energy Company, in addition to UICCA.
The alliance will look to establish national co-operation in decarbonisation, develop standards and frameworks for constructive carbon financing, increase education and knowledge of carbon markets and support organisations on greenhouse gas emission reduction projects.
The establishment of a transparent carbon market will direct investment and capital towards projects that support decarbonisation, while also providing corporations with a market-based mechanism to further their transition journey and achieve reduction targets.
“Carbon reduction is both fundamental and non-negotiable for the health of our planet," said Sheikha Shamma.
"To reach net zero, we must actively reduce our emissions across all sectors and it is imperative that public and private sectors take active steps to reduce emissions.
"Productive partnerships like the UAE Carbon Alliance will help the world find practical solutions on the path to decarbonisation, by funding the actual physical carbon abatement efforts and making them financially, environmentally, and socially viable.
"The UAE Carbon Alliance will establish the UAE as a leading hub for high integrity, high quality carbon markets, to help fund the much-needed action to limit global warming to 1.5°C.”
The UAE Carbon Alliance will convene its first executive committee meeting with all its founding members this week.
UICCA will play will help guide the deployment of carbon credit solutions in the region by facilitating stakeholder collaboration across the public and private sector, as well as acting as the secretariat of the alliance.
The alliance will represent buyers and sellers of carbon credits, traders, climate project developers, financial institutions, corporations, exchanges and brokers from across the UAE and beyond.