Based in Riyadh, the new company will support regional businesses in their contribution to the global transition to net zero.
It aims to ensure that carbon credit purchases go “beyond meaningful emission reductions in value chains,” according to an official statement.
The kingdom’s sovereign wealth fund has an 80% stake in the company while Saudi-owned Tadawul Group has a 20% stake in the company, he added.
“The company will play an important role in PIF’s broader efforts to drive the investment and innovation needed to address the impact of climate change and support Saudi Arabia’s efforts to reach net zero by 2060,” said Yazeed Al Humied, Deputy Governor and Head of Middle Investments in East and North Africa at PIF.
“We are passionate about the potential of voluntary carbon markets to deliver additional carbon reduction benefits across the region, ensuring that the Mena region is at the forefront of climate action and that Saudi Saudi Arabia is a leading force in solving the climate challenge,” the statement said. continued.
The establishment of the company is a continuation of PIF’s initiatives to support Saudi Arabia’s green agenda. Earlier this month it raised $3 billion through its first bond issue as it plans to finance or refinance its investments in renewable energy, energy efficiency, green buildings and transport clean.
The fund is making various efforts as part of its commitment to develop 70% of Saudi Arabia’s renewable energy capacity in line with Saudi Vision 2030.
Saudi Arabia, the world’s largest exporter of crude oil and the largest economy in the Arab world, has set ambitious goals to fight climate change and reduce carbon emissions in order to restructure its economy and reduce its dependence on oil.
It has set itself the goal of achieving net zero carbon emissions by 2060.
The kingdom also plans to more than double its annual carbon emissions reduction target to 278 million tonnes by 2030, Crown Prince Mohammed bin Salman said in October last year. This figure was higher than the previous target of 130 million tonnes.
“We are continuously working to encourage the adoption of ESG (environment, social and governance) information in the Saudi capital market, to advocate for a better and more transparent future,” said Khalid Al Hussan, Managing Director of the Saudi Group. Tadawul.
“We are delighted to be an integral part, strategically and operationally, of the Regional Society of the Voluntary Carbon Market. We believe this will be instrumental in supporting Vision 2030 and realizing the group’s vision of being a gateway to the Mena region for global investors.
The new company will also support the efforts of the carbon credit auction on Tuesday at the sixth Future Investment Initiative in Riyadh.
The auction will involve one million tonnes of carbon credits and will offer high quality credits, including certificates compliant with the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) and registered with Verra.
Corsia is a market-based global measure designed to offset carbon dioxide emissions from international aviation in order to stabilize the levels of these emissions.
“The inaugural auction represents the first step in becoming a leading presence in the global voluntary carbon market ecosystem,” said Riham ElGizy, director of the Voluntary Carbon Market (VCM) Initiative.
“With one million tonnes of carbon credits available for trade, we expect our auction to be the largest carbon credit auction to date.”
The announcement of the new company follows the VCM initiative of PIF and Saudi group Tadawul unveiled in September last year.
The platform intends to become the main destination for companies and institutions that aim to reduce their emissions or contribute to reductions through the exchange of verified, approved and high-quality carbon equivalent certificates.
Updated: October 24, 2022, 9:12 p.m.