RIYADH: Expressing her optimism about the prospects of voluntary carbon credits, the CEO of Regional Voluntary Carbon Market Co. expects a positive response from the Middle East and North Africa region, with the market set to reach 100-150 million tons by 2030.
Efforts to mitigate the effects of climate change are also likely to get a boost, as Saudi Arabia is on track to establishing a carbon credit exchange platform by the second half of 2024.
Speaking to Arab News, Riham ElGizy highlighted three main offerings that the exchange market will provide. 
She said it is “going to be a spot market to help price discovery by 2024. We will have as well in that exchange over-the-counter (trading), we will have a marketplace for suppliers to sell their own product(s).”
ElGizy said before the establishment of the platform RVCMC will make available exchange and advisory services to buyers and suppliers. 
“We’re not waiting till the exchange comes online by 2024.” 
Referring to the carbon offset auction held in Nairobi in June, the CEO described it as the “biggest ever” in the history of the market in which 16 Saudi companies representing major economic sectors took part.
A carbon credit or offset credit is a transferrable financial instrument certified by governments or independent certification bodies to represent an emission reduction that can then be bought or sold. It is bought to compensate for the emissions of carbon dioxide or other greenhouse gases. 
“If you talk about the oil and gas sector, we had Saudi Aramco, the biggest oil and gas company in the world, and we had SABIC. If we talk about the construction sector, we had with us the cement company Yanbu Cement, and we had also ENOWA,” she said. 
Other companies that participated in the auction included Golf Saudi, Saudi telecom giant stc, Saudi Electricity Co., and the Saudi National Bank. 
“The aviation industry was represented by Saudia, which is a great partner to us as well,” she added. 
That auction witnessed a trade of 2.2 million tons of carbon credits. Putting that number into perspective, she noted that this is equivalent to the emissions of approximately 650,000 family cars for one year. 
Last year, the global trade in voluntary carbon market transactions amounted to 150 million tons of CO2 emissions, with a corresponding value of $2 billion, a quantity comparable to the emissions of a nation such as Algeria. 
“Which is very good, but not good enough,” ElGizy said. 
Zooming in on the MENA region, the CEO mentioned that when they first started there was no supply and no demand. She stated that their global market share reached 3 percent over the past year, primarily as a result of two successful auctions they conducted, with the first auction taking place during the first day of the 6th Future Investment Initiative held in Riyadh. 
ElGizy remarked “The (carbon credit) market globally is growing at 30 percent per annum and the MENA region will grow proportionately with that. We expect the market to reach 100 to 150 million tons by 2030, which represents the forestation for a country like Germany.” 
In voluntary carbon markets, companies or individuals use carbon offsets in order to meet self-defined goals for reducing emissions. 
RVCMC, established in October last year, is 80 percent owned by the Public Investment Fund, and 20 percent by Tadawul Group with a SR500 million ($133 million) capital.
The company, which allows carbon emitters to offset their emissions by purchasing carbon credits, seeks to be a global leader in the carbon market. 
“Not only serving the Saudi market or even the MENA region, we want to be a global market and we can do that,” she noted. 
Furthermore, it aims to accelerate climate action and to be the leader in the Global South. 
“What we provide is very different than a typical carbon market because we look at it holistically from an ecosystem perspective,” ElGizy said.