Saudi Arabia Debuts Carbon Credit Platform with 2.5 Million Credit Auction at COP29

Saudi Arabia has taken a significant step in its environmental strategy by launching the country’s first carbon credit trading platform at the UN Climate Change Conference (COP29) in Baku on November 12. Managed by the Regional Voluntary Carbon Market Company (RVCMC), the platform aims to bolster the voluntary carbon market as the Kingdom seeks to diversify its economy under the Vision 2030 plan, while continuing its investment in renewable energy.

The debut of the carbon credit exchange was marked by a substantial auction involving 22 companies from Saudi Arabia and beyond, offering 2.5 million high-quality carbon credits. These credits, certified by organizations including Verra, Gold Standard, and Puro.earth, mainly originate from projects in the Global South, covering countries like Bangladesh, Brazil, Ethiopia, Malaysia, Pakistan, and Vietnam. The auction signals Saudi Arabia’s ambitions to establish itself as a key player in the emerging carbon market, following previous successful auctions held in Nairobi and Riyadh in 2023.

Riham ElGizy, CEO of RVCMC, highlighted the importance of voluntary carbon markets for bridging the climate finance gap, emphasizing the need for robust market infrastructure to enhance private sector engagement. “Our message at COP is clear: accelerating global decarbonization requires unlocking financial flows for climate projects at scale. High-integrity voluntary carbon markets can play an important role in reducing the climate finance gap this decade,” said ElGizy.

The RVCMC, supported by Saudi Arabia’s Public Investment Fund (PIF) and the Saudi Tadawul Group, leverages the country’s investments in renewables, including solar energy projects, to advance towards its carbon neutrality target by 2060. This carbon exchange initiative aligns with the broader Vision 2030 goal of reducing the country’s reliance on oil revenues while boosting renewable energy investments.

Despite its progress, the voluntary carbon market continues to face hurdles, particularly regarding market confidence in the quality of certain carbon credits, which can impact both liquidity and offset prices. However, experts remain optimistic that emerging integrity measures will help restore trust in the market. The recent auction showcased carbon credits certified at various price points, reflecting the diversity of project types, from household offsets at $3.85 per metric ton to technological carbon capture offsets at $125 per metric ton.