Saudi Arabia’s Public Investment Fund (PIF) announced the establishment of a regional voluntary carbon market company, which will offer guidance and resources to support businesses and industry in the region in their transition bid to achieve net zero targets.
PIF will hold 80 percent stake in the new company, while Saudi Tadawul Group Holding Company will hold the remaining 20 percent equity stake.
The new company will be headquartered in Riyadh.
PIF said the new company is to ensure that carbon credit purchases go above and beyond meaningful emission reductions in value chains.
The setting up of the new company follows the announcement of the voluntary carbon market (VCM) initiative by PIF and Saudi Tadawul Group in September 2021.
The initiative is in line with the country’s role in contributing to the reduction of climate change impact and encouraging institutions to reduce their carbon emissions.
The new company announcement is expected to facilitate the efforts of the carbon credit auction – billed as the world’s largest-ever – at the 6th edition of the Future Investment Initiative (FII) in Riyadh on Tuesday.
The auction will involve a total of one million tons of carbon credits and will offer high-quality credits including CORSIA compliant, Verra registered certificates.
Yazeed A. Al-Humied, deputy governor and head of MENA investments at PIF, said the establishment of the new regional voluntary carbon market company would be a major milestone for the MENA region.
“We are passionate about the potential for voluntary carbon markets to deliver additional carbon reduction benefits throughout the region, thereby ensuring the MENA region is at the forefront of climate action and that Saudi Arabia is a leading force in solving the climate challenge,” he said.
The company will play an important role in PIF’s wider efforts to drive the investment and innovation required to address the impact of climate change and support Saudi Arabia’s efforts to achieve net zero by 2060, Al-Humied said.
Khalid A. Al-Hussan, CEO of Saudi Tadawul Group, said the group continuously worked towards encouraging the adoption of ESG disclosures in the Saudi capital market and advocate for a better, more transparent future.
Riham ElGizy, Director of VCM Initiative, said the inaugural auction represented the first step towards becoming a leading presence in the global voluntary carbon market ecosystem.
“With an expected one million tons of carbon credits available to trade, we predict that our auction will be the largest carbon credit auction to date,” he said.
The new company’s establishment is a continuation of PIF initiatives to support Saudi Arabia’s green agenda and follows previous announcements by the fund, including the completion of its $3 billion inaugural green bond.
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