Saudi Arabia held its eigth Future Investment Initiative summit this week and made several steps towards launching its carbon market.
Its Regional Voluntary Carbon Market Company (RVCMC) and the Clean Development Mechanism Designated National Authority (CDMDNA) in Saudi Arabia signed an MoU between the two organization for establishment of a carbon market framework in the country.
RVCMC was established in 2022 when the Saudi Sovereign Wealth Fund partnered with the Tadawul Group – the holding group developing country’s capital market – to lay the foundation of a carbon market.
The company has already held several auction for carbon credits. The 2022 edition of FII saw an auction for 1.4 million tons of CO2 credits with the world’s biggest oil producer Saudi Aramco being lead buyer among the 16 companies that took part in the auction.
Saudi Arabia carbon market roadmap
During FII 2024 Saudi Arabia’s energy minister Prince Abdulaziz Bin Salman shared that there is a gradual approach to establishing the market with a pilot phase being prepared for the next “two to three years”, according to a report in The National.
This would mean the launch of the Saudi Arabia carbon market could be in late 2026 or 2027 but will have to be in line with the country’s economy which is still heavily reliant on oil and gas production.
In 2023 the kingdom launched its Greenhouse Gas Crediting and Offsetting (GCOM) mechanism will provide companies with the opportunity to offset their emissions by purchasing credits from projects that have actively reduced or removed greenhouse gas emissions.
RVCMC is working on developing the infrastructure for its market and in April 2024 selected Xpansiv as its technology provider. At FII the energy minister indicated that the voluntary exchange platform will be launched during the upcoming COP29 in mid-November.
Read more: RVCMC Selects Xpansiv For Credit Exchange In Saudi Arabia
