SAWT BEIRUT INTERNATIONAL

| 26 September 2022, Monday |

Saudi’s PIF signs 5 agreements in push to establish MENA voluntary carbon market

In a statement released late Tuesday, Saudi Arabia’s Public Investment Fund (PIF) stated that five top Saudi enterprises have signed memorandums of understanding to become the wealth fund’s first possible partners in the Middle East and North Africa regional Voluntary Carbon Market (VCM).

The five firms that inked deals with PIF were Saudi Aramco, SAUDIA airlines, ACWA Power, Ma’aden, a mining and metals company, and ENOWA (a subsidiary of NEOM).

The VCM attempts to match carbon credit supply with demand from investors and organizations looking to minimize their carbon footprint by offsetting their emissions.

Carbon credits are a strategy for reducing carbon emissions or greenhouse gas emissions. They function as a permit that allows the credit owner to emit a certain quantity of emissions. One credit entitles you to emit one ton of CO2 or the equivalent in other greenhouse gases.

When firms pollute, they are given credits that allow them to continue polluting but only up to a particular limit. This is known as a “cap-and-trade” mechanism. This amount is then reduced on a regular basis, and the firm can sell any unsold credits to another company in need during this time.

The partners will aim to support PIF in the development of the VCM through carbon credit supply, purchase, and trading as the market is expected to be established in 2023, according to the statement. Additional partners will be announced in the coming months ahead of an initial round of auctions expected in the fourth quarter of 2022, according to the statement.

“We’d want to express our gratitude to our partners for their support for the Voluntary Carbon Market, which is the first of its type in the MENA region. “The support of Saudi enterprises, which are world leaders in their professions,” said PIF Governor Yasir al-Rumayyan, “is a significant proof of the tremendous potential of this market.”

“PIF supports Saudi Arabia’s efforts by facilitating the investment and innovation needed to address the impact of climate change and reach net zero carbon emissions by 2060,” al-Rumayyan said.

Saudi Arabia will begin building on a $5 billion green hydrogen facility in Neom, Saudi Arabia.
PIF stated that private enterprises’ internal decarbonization ambitions will remain a priority, and that the VCM can successfully support these efforts to achieve net-zero emissions by 2060.

“PIF supports Saudi Arabia’s efforts by facilitating the investment and innovation needed to address the impact of climate change and reach net zero carbon emissions by 2060,” al-Rumayyan said.

Saudi Arabia will begin building on a $5 billion green hydrogen facility in Neom, Saudi Arabia.
PIF stated that private enterprises’ internal decarbonization ambitions will remain a priority, and that the VCM can successfully support these efforts to achieve net-zero emissions by 2060.

The action follows the introduction of the VCM project by PIF and Tadawul in September 2021, in which Saudi Arabia’s Deputy Prime Minister and PIF Chairman, Crown Prince Mohammad bin Salman, underlined Saudi Arabia’s responsibility in reducing the impact of climate change as part of various initiatives launched.

The Crown Prince also announced Saudi Arabia’s goal to attain net-zero emissions by 2060 through the Carbon Circular Economy concept earlier this year at the Saudi Green Initiative Forum, which is in accordance with the Kingdom’s growth ambitions in terms of enabling economic diversification.

Such efforts also contribute to the development of the Kingdom’s green economy, create more jobs, and offer up new channels for private sector investment, all of which are in line with Vision 2030.

PIF also released its Green Finance Framework, which outlined a number of measures aimed at assisting it in achieving its objective of being a leader in environmental, social, and corporate governance (ESG), including the creation of a VCM.

 

    Source:
  • alarabiya