Aramco: Rapid Evolution of Voluntary Carbon Markets

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by KnowESG
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According to a high-ranking Saudi Arabian Oil Co. official, the rapid development of voluntary carbon markets, even in their early stages, reflects the global commitment to a sustainable future.

Musaab Mulla, Saudi Aramco's Vice President for Energy and Economic Insights, highlighted in an interview with Arab News that a recent auction held on June 14 in Kenya saw the sale of 2.2 million tons of carbon offsets in the voluntary carbon credits market.

During the Future Investment Initiative in Riyadh in October 2022, another auction took place where 1.4 million tonnes of carbon offsets were successfully sold, with Saudi Aramco serving as the lead buyer.

Mulla emphasised that Saudi Aramco's focus lies in purchasing high-quality credits, as demonstrated by their participation in auctions organised by the Regional Voluntary Carbon Market Co. He also expressed interest in monitoring potential demand for carbon-neutral fuels and acknowledged the evolving nature of voluntary carbon markets.

Carbon credits enable companies to offset a specific amount of carbon dioxide or other harmful gases, with each credit representing 1 tonne of emissions. These credits are generated through projects such as tree planting or the use of cleaner cooking fuel. They can fund emissions-avoiding projects or help eliminate carbon from the atmosphere altogether.

Mulla underscored the importance of carbon offsets in the global transition to cleaner energy. He explained that carbon credits, tradable instruments supported by emission-reducing projects, can compensate for greenhouse gas emissions and complement internally generated offsets, such as mangroves, as part of their pathway to net zero.

With a net-zero target set for 2050, Saudi Aramco's participation in voluntary carbon markets and other recent initiatives are expected to accelerate its journey towards carbon neutrality. Mulla further shared the company's commitment to monitoring market developments to ensure the acquisition of high-quality credits.

In addition to their net-zero target, Saudi Aramco aims to reduce upstream carbon intensity by at least 15% to 8.7 kilograms of CO2 by 2035. The company plans to achieve this through investments in renewables, carbon capture and storage, energy efficiency improvements, methane and flaring reduction, and offsets.

Highlighting their industry-leading low-carbon practices and technologies, Mulla emphasised that Saudi Aramco's decarbonisation strategy encompasses energy efficiency, reduced methane and flaring, increased use of renewables, carbon capture and storage (CCS), and offsets.

Following the auction in Kenya, RVCMC CEO Riham ElGizy expressed the importance of such initiatives in driving funding to areas that require it the most for climate action and livelihood improvements.

ElGizy envisions RVCMC becoming one of the world's largest voluntary carbon markets by 2030, compensating for hundreds of millions of tonnes of carbon emissions annually and contributing to global net-zero goals.

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Source: Arab News

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