Saudi launches carbon trading platform on sidelines of COP29

The Kingdom launched a new carbon trading platform, with an inaugural 2.5 mn tons of carbon credits for projects across 17 countries available for auction starting yesterday, according to a press release (pdf) from the Regional Voluntary Carbon Market Company (RVCMC). The platform — which was first established in 2022 — is 80% owned by the Public Investment Fund (PIF), with Tadawul Group holding the remaining 20%. The story got ink from Bloomberg and S&P Global.

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Trading kicked off yesterday and saw participation from 23 Saudi and international companies including Aramco Trading, Ma’aden, Flynas, SABIC, PIF, Luberef, SNB, Eastern Province Cement, Red Sea Global, and others. International players taking part in the inaugural transactions included US-based Energroup and climate portfolio manager Valitera. The core basket clearing price stood at SAR 37.50 per tonne of carbon credits.

RVCMC’s launch comes one day after negotiators from across the world hammered out new rules for carbon trade at COP29 following years of deadlock, laying the groundwork for a global emissions market administered by the UN, EnterpriseAM Climate reported. RVCMC has run two carbon credit auctions before, in Riyadh and Nairobi.

Market specs: RVCMC features institutional-grade infrastructure for secure trades and price discovery mechanisms, supplied by Xpansiv. The platform includes auction, RFQ, block trade, open connectivity, and Islamic finance options, with plans to add spot market capabilities in 2025.

RVCMC applies new guidelines to address greenwashing claims that have stifled previous carbon market initiatives, Bloomberg said. This means that credits from renewable energy projects and clean cooking stoves will no longer make the cut. The platform is also deploying two teams dedicated to due diligence on each credit-generating project, while accreditation must also be secured from independent verifiers Sylvera or BeZero. “It’s a lot of overhead on companies but this is the only way we can protect our buyers and provide some confidence to them,” Bloomberg cites the platform’s CEO Rihm ElGizy as saying.

More than three quarters of the credits on offer are connected to projects in the Global South, including Bangladesh, Brazil, Ethiopia, Malaysia, Pakistan, and Vietnam, the statement said. About a fifth of the auctioned credits are “removal credits,” which are designed to pull greenhouse gasses out of the atmosphere rather than simply cut emissions, in line with international standards. These include landfill gas projects which capture methane emissions, a reforestation drive in Ethiopia that will also boost local incomes, and a US-based construction technology project that looks to embed captured CO2 in concrete.

This is the region’s second go at a carbon offset market: Abu Dhabi was first out of the gate with a carbon exchange in the Middle East, but the platform — dubbed ACX — shut down just one year after launch and moved shop to Singapore due to limited market pull and policy gaps, EnterpriseAM UAE reported previously. A lack of mandates requiring regional firms to offset their emissions and a downturn in the global carbon offset market on the back of widespread greenwashing claims contributed to ACX’s failure to generate traction.

IN OTHER CLIMATE NEWS- A partnership between local cement supplier Saudi Readymix and Finnish tech firm Betolar has rolled out two low-emission concrete products for use in the Kingdom’s construction sector, according to a press release. The low-carbon concrete solutions look to bolster the construction sector’s push to contribute to national sustainability goals.