Egypt puts its UN carbon credits up for sale to companies and banks for the first time

Companies and banks can now buy the state’s UN-certified carbon credits directly, but they’ll have to move fast. The Egyptian Environmental Affairs Agency (EEAA) began taking bids on Sunday from public- and private-sector companies, entities, and banks, and will accept them until 31 October, according to a statement and announcement (pdf). Credits will go out on a first-come, first-served basis until they run out.

It’s the first time the state has sold them directly, a senior government source tells EnterpriseAM. On offer is the government’s share of credits earned by national projects in recent years, open to local and international buyers alike. Until now, the agency has kept them for the state’s own use, applying them toward carbon neutrality for some national projects, the source says.

Why it matters: Foreign buyers increasingly set emissions limits for their suppliers, and the credits give exporters a cheaper way to meet them than heavy green capex. A manufacturer that falls short can buy credits “instead of building a giant solar power plant,” the source says. The state, meanwhile, earns a return on the national projects that generated them.

SOUND SMART- Each credit represents 1 ton of CO2 kept out of the atmosphere, or the equivalent in other greenhouse gases. These are Certified Emission Reductions (CERs), which the UN issued to projects in developing countries under its Clean Development Mechanism. A buyer uses a credit by “cancelling” it against its own emissions, so no one can claim the same ton twice. Buyers here never hold the credits themselves: they don’t need a registry account or a transfer of ownership. Instead, they get an official UN cancellation certificate in their name, according to the EEAA.

A shortcut to a lighter footprint

The credits cover the gap between what a factory can cut and what its buyers ask for. Take the source’s example: a company whose goods carry 100 tons of CO2 equivalent might aim for 50 to stay competitive. If its production lines can’t get it all the way there, credits can make up part of the difference. That’s most useful for firms that can’t afford emissions-cutting projects at their own plants yet, the source adds.

Name your price

There’s no guide price. Bidders name their own, and the EEAA will weigh offers against global credit prices, aiming for the highest price it can get for the state’s national projects, the source says. The agency hasn’t said how many credits are on offer.

How to bid: Bids go to the EEAA’s headquarters in the New Capital in two sealed envelopes, the agency says. The technical offer covers the bidder’s statutory documentation, the number of credits it wants, the period they cover, and the exact name of the company, project, or event they’ll offset. That name goes on the certificate and can’t be changed once it’s issued. The financial offer sets out the price per ton, the currency, and the total value. Buyers pay in full upfront before the credits are canceled.

The UN sets the clock

The rush comes from the UN, which is phasing out the Clean Development Mechanism by the end of this year. Its registry will process cancellations only until 31 December, and it guarantees processing only for requests filed by 25 November, less than four weeks after bids close.

What the credits don’t cover

They won’t count toward the EU’s carbon border tax, the source says. The Carbon Border Adjustment Mechanism (CBAM) requires real emissions cuts and doesn’t accept these certificates in their place. That matters more this year; since CBAM’s definitive phase began in January, EU importers of cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen have had to pay for the carbon in those goods, on top of reporting it.

REMEMBER- Environment Ministry studies estimate that CBAM could cost local manufacturers USD 317 mn a year if they don’t decarbonize, about USD 236 mn of it in iron and steel.

The credits aren’t meant for the local carbon market, either. The voluntary market on the EGX trades credits from projects companies take on by choice, while these come from a UN scheme with its own rules, the source says. That market has had a slow start, clearing just six trades for 6k credits since it launched in August 2024. That could change soon: FRA rules require non-bank financial firms with issued capital or net equity above EGP 100 mn to offset 20% of their reported emissions through it, with compliance due on 31 December, the same day the UN window shuts.

What’s next: Bids close on 31 October. If the EEAA discloses the volume sold and the price, it’d be the first public price for the state’s credits, and the first real measure of how much exporters want them.