Banking group Emirates NBD, which operates in the MENAT region (Middle East, North Africa, and Turkey), has introduced carbon future contracts trading, amid increasing demand from corporations to manage their CO2 emissions offsetting in line with UAE’s Net Zero targets.
The news, announced on July 4, comes in the context of the 28th United Nations Climate Change Conference, or COP28, which will be held in the United Arab Emirates in November. The group’s carbon future contracts trading facility will allow clients to access the asset class, which estimated value reaches $850 billion across six emission trading schemes globally.
The new CO2 contract trading is aligned with the European Union’s Emission Trading System (ETS) and the UK Emission Trading Scheme and the organizations’ guidelines for transparency, credibility, and accountability.
The government of the United Arab Emirates plans to introduce regulated CO2 credit trading exchanges and clearing houses before COP28.
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Green and sustainable financing in the country increased 32% year-on-year in 2022, consulting company Arthur D. Little reported. Green debt instruments from the Middle East and Africa are surpassing the global growth of this sector. In 2021, a total of $24.55 billion was issued in green and sustainable instruments, marking a significant 532% increase compared to the $3.8 billion issued in 2020.
“Through our Global Markets team, clients will be able to seamlessly tap global carbon credit markets to support their net zero ambitions and sustainability goals,” said Ahmed Al Qassim, Group Head of Wholesale Banking at Emirates NBD. “Our clients’ engagement will also aid the growth of the region’s fast-growing capital markets, attracting more global ESG investors as the UAE becomes a hub for climate change financing.”
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