PIF Announces Formation of Regional Voluntary Carbon Market Company
The Public Investment Fund (PIF) announced that it was starting the Regional Voluntary Carbon Market Company. PIF owns 80% of the company, while Saudi Tadawul Group Holding Company owns 20%.
The company will help businesses and industries in the region get ready for the global transition to net zero by giving them advice and resources. It will ensure that buying carbon credits goes above and beyond reducing emissions in value chains.
The news comes after PIF and Saudi Tadawul Group announced the Voluntary Carbon Market Initiative in September 2021. At that time, His Royal Highness Crown Prince Mohammed bin Salman, Chairman of PIF, said that Saudi Arabia would play a leading role in reducing the effects of climate change and encouraging institutions to reduce their carbon emissions as part of several initiatives launched in this area.
The company's announcement will help with the world's largest carbon credit auction on October 25 at the 6th Edition of the Future Investment Initiative (FII) in Riyadh. The company is based in Riyadh.
There will be a total of one million tonnes of carbon credits for sale at the auction. These will be high-quality credits, such as CORSIA-compliant and Verra-recognised certificates.
Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF, said:
“We are delighted to announce the establishment of the Regional Voluntary Carbon Market Company, which coincides with the auction’s announcement – a major milestone for the Middle East and North Africa region. We are very excited about the idea that voluntary carbon markets could help reduce carbon emissions even more across the region. This would put the Middle East and North Africa (MENA) region at the forefront of climate action and make Saudi Arabia a leader in solving the climate problem.
"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.”
Eng. Khalid A. Al-Hussan, CEO of Saudi Tadawul Group, said:
“The Saudi Tadawul Group has an important role to play in championing Saudi Arabia’s efforts towards a sustainable future. We are always trying to get the Saudi capital market to use ESG disclosures so that the future will be better and more open. We are delighted to be an integral part, strategically and operationally, of the Regional Voluntary Carbon Market Company. We believe it will be instrumental in supporting Vision 2030 and in further realising the Group’s vision of being a gateway to the MENA region for global investors."
Riham ElGizy, Director of VCM Initiative, said:
“The inaugural auction represents 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."
The establishment of the company is a continuation of PIF initiatives to support Saudi Arabia's green agenda, and it follows previous announcements by the Fund, such as the completion of its USD 3 billion inaugural green bonds and the various renewable projects PIF is spearheading as part of its commitment to developing 70% of Saudi Arabia's renewable energy capacity by 2030, under Saudi Vision 2030.