Saudi carbon credit company to launch exchange in early 2024, chief executive says

The company will conduct an auction to sell 2 million tonnes of carbon offsets on June 14

The Riyadh skyline. EPA

Saudi Arabia's Regional Voluntary Carbon Market Company plans to launch a carbon credit trading exchange in early 2024 and establish a fund to invest in climate projects, its chief executive has said.

RVCMC, which is jointly owned by Saudi Arabia's Public Investment Fund and Saudi Tadawul Group, will also offer advisory services to companies looking to decarbonise their operations, Riham ElGizy told The National in an interview on Monday.

Ms ElGizy’s remarks come ahead of an RVCMC-led carbon offset auction in Nairobi on June 14, where more than 2 million tonnes of credits are set to be sold to 15 buyers, mainly from Africa and Saudi Arabia.

Riham ElGizy, chief executive of Regional Voluntary Carbon Market Company. Photo: Regional Voluntary Carbon Market Company

The carbon credits comply with Corsia, a programme run by the International Civil Aviation Organisation, and are registered with Verra, operator of the world's largest registry of carbon credits.

Carbon credits, also known as carbon offsets, are permits that allow companies to emit a certain amount of carbon dioxide or other greenhouse gases. The funds from the sale of the credits are used to finance climate-action projects that would not otherwise get off the ground.

The market for the financial instrument could be worth more than $50 billion by 2030, according to consultancy firm McKinsey.

Last year, Saudi Arabia conducted the Middle East’s first carbon offset auction and announced the sale of more than 1.4 million tonnes of carbon credits.

“We are going to exceed the bar that we set in the market last time. We were the biggest in the history of the market [and] this time we are going to be even bigger than that,” Ms ElGizy said.

About 70 per cent of the basket of carbon credits is for climate projects in Africa, including countries such as Egypt, Mauritania, South Africa, Uganda and Kenya, she said.

Despite bearing the least responsibility, Africa is already experiencing more pronounced climate change effects compared to other regions.

With nearly one fifth of the world’s population, the region accounts for less than 3 per cent of the world’s energy-related carbon dioxide emissions, according to the International Energy Agency.

“We believe that there is a huge under investment in climate projects in Africa. What we're trying to do over there is to shed the light and illustrate the underinvestment in African [carbon] credits,” Ms ElGizy said.

“That's why we're taking buyers to go and see on the ground … we're connecting the buyer with the supply, and this is very important for us.”

Saudi Arabia, the world's biggest crude exporter and the Arab world's biggest economy, is looking to diversify away from oil exports as part of its plan to achieve net-zero carbon emissions by 2060.

In February, the PIF raised $5.5 billion through the sale of a green bond to secure funding for green investments.

Although carbon offsets are seen as key to limiting carbon emissions, the market for the instrument has come under criticism globally for lack of transparency and the poor quality of projects.

“In the future, we're going to have ratings agencies [and] we're going to look at international standards and make sure that they are applied on the exchange,” Ms ElGizy said.

More than 2,000 people live on the Kolleh Town rubbish dump in central Freetown, Sierra Leone. Nick Webster / The National

Kaditu Kariwallie, 55, a grandmother who raised her children and grandchildren on the site and Maligie Koroma, Freetown City Council supervisor at the Bomeh refuse site in Freetown Sierra Leone. Nick Webster / The National

Daniel-Bob Jones, (yellow top) national chairman of community disaster management and Kolleh Town community chairman. Andy Scott / The National

Yassin Kargbo, Country Manager for Infinitum Energy. The company has a plan to strip the site of its recyclable materials and redevelop the site for its residents. Andy Scott / The National

Kolleh Town landfill centre in Sierra Leone - home to more than 2,000 residents that mine the site for recyclable materials. Andy Scott / The National

Kolleh Town landfill centre in Sierra Leone - home to more than 2,000 residents that mine the site for recyclable materials. Andy Scott / The National

Kolleh Town landfill centre in Sierra Leone - home to more than 2,000 residents that mine the site for recyclable materials. Andy Scott / The National