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Sale of 2.2 Mln Tons of Carbon Credits in Global Auction

The company’s participation at the Future Investment Initiative in the Saudi capital Riyadh in October. (Asharq Al-Awsat) 
The company’s participation at the Future Investment Initiative in the Saudi capital Riyadh in October. (Asharq Al-Awsat) 
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Sale of 2.2 Mln Tons of Carbon Credits in Global Auction

The company’s participation at the Future Investment Initiative in the Saudi capital Riyadh in October. (Asharq Al-Awsat) 
The company’s participation at the Future Investment Initiative in the Saudi capital Riyadh in October. (Asharq Al-Awsat) 

The Regional Voluntary Carbon Market Company (RVCMC) announced Thursday the successful auction of over 2.2 million tons of carbon credits in the largest-ever voluntary carbon credit auction, which was held in Nairobi, Kenya on Wednesday.

The auction offered high-quality CORSIA-eligible and Verra-registered carbon credits which can enable buyers operating in a range of industries, to play their part in the global transition.

RVCMC seeks to ensure that voluntary carbon credit purchases go above and beyond meaningful emission reductions in value chains.

Sixteen regional and international entities took part in the auction, with Aramco, Saudi Electricity Company (SEC), and ENOWA (a subsidiary of NEOM), purchasing the largest number of carbon credits.

Other successful bidders at the auction included Saudi Aramco, International Islamic Trade Finance Corporation, and ENOWA (a subsidiary of NEOM).

The auction clearing price was 23.50 SAR per ton of carbon credits.

The basket of credits includes 18 projects representing a mix of CO2 avoidance and removal.

Three-quarters of the carbon credits originated from countries across the Middle East, North Africa, and Sub-Saharan Africa, including Kenya, Uganda, Burundi, Rwanda, Morocco, Egypt, and South Africa.

The basket of credits includes projects such as improved clean cookstoves and renewable energy projects.

In addition, RVCMC signed two MOUs, one with Eveready East Africa Plc, and another with Carbon Vista Nigeria LP, in order to generate high-quality, impactful carbon projects in Kenya, Nigeria, and beyond. This signals the important commitment between RVCMC and key African institutions.

"We need to use every tool at our disposal to tackle the devastating impacts climate change is already having. This auction demonstrates the role voluntary carbon markets can play in driving funding where it is most needed, to deliver climate action,” Chief Executive Officer of RVCMC Riham ElGizy said.

"Today we have completed the biggest-ever auction of high-quality voluntary carbon credits, selling over 2.2 million tons. This follows on from the 1.4 million tons auctioned in October last year,” ElGizy added.

"Our aim is to be one of the largest voluntary carbon markets in the world by 2030, one that enables compensation of hundreds of millions of tons of carbon emissions per year... Our achievements to date, in such a brief period, demonstrate commitment to long-term success, and ability to deliver on our ambitions."

ElGizy further announced that the company plans on launching a trading platform for the voluntary carbon market in mid-2014.

RVCMC was established by the Public Investment Fund (PIF) and Saudi Tadawul Group to offer guidance and resourcing to support businesses and industry in the MENA region as they play their part in the global transition to Net Zero.

Its mission is to create a robust and successful market for both the generation and use of voluntary carbon credits in the MENA region and play a meaningful role in assisting the transition to a low-carbon global economy.

Moreover, Olayan Financing Company took part in the second RVCMC's carbon credit auction and purchased carbon credits.

"We firmly believe that as a leading private sector company, it is imperative to not only find effective solutions but also to innovate in our approach to combating climate change," remarked its CEO Nabeel Al-Amudi.

"This endeavor by RVCMC represents a significant stride toward a more sustainable future for both the kingdom as well as the rest of the world," he added.

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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki

The International Monetary Fund said on Thursday that an escalation of the conflict in the Middle East could have significant economic ramifications for the region and the global economy, but commodity prices remain below the highs of the past year.

IMF spokesperson Julie Kozack told a regular news briefing that the Fund is closely monitoring the situation in southern Lebanon with "grave concern" and offered condolences for the loss of life.

"The potential for further escalation of the conflict heightens risks and uncertainty and could have significant economic ramifications for the region and beyond," Kozack said.

According to Reuters, she said it was too early to predict specific impacts on the global economy, but noted that economies in the region have already suffered greatly, especially in Gaza, where the civilian population "faces dire socioeconomic conditions, a humanitarian crisis and insufficient aid deliveries.

The IMF estimates that Gaza's GDP declined 86% in the first half of 2024, Kozack said, while the West Bank's first-half GDP likely declined 25%, with prospects of a further deterioration.

Israel's GDP contracted by about 20% in the fourth quarter of 2023 after the conflict began, and the country has seen only a partial recovery in the first half of 2024, she added.
The IMF will update its economic projections for all countries and the global economy later in October when the global lender and World Bank hold their fall meetings in Washington.
"In Lebanon, the recent intensification of the conflict is exacerbating the country's already fragile macroeconomic and social situation," Kozack said, referring to Israel's airstrikes on Hezbollah in Lebanon.
"The conflict has inflicted a heavy human toll on the country, and it has damaged physical infrastructure."
The main channels for the conflict to impact the global economy have been through higher commodity prices, including oil and grains, as well as increased shipping costs, as vessels avoid potential missile attacks by Yemen's Houthis on vessels in the Red Sea, Kozack said. But commodity prices are currently lower than their peaks in the past year.
"I just emphasize once again that we're closely monitoring the situation, and this is a situation of great concern and very high uncertainty," she added.
Lebanon in 2022 reached a staff-level agreement with the IMF on a potential loan program, but there has been insufficient progress on required reforms, Kozack said.
"We are prepared to engage with Lebanon on a possible financing program when the situation is appropriate to do so, but it would necessitate that the actions can be taken and decisive policy measures can be taken," Kozack added. "We are currently supporting Lebanon through capacity development assistance and other areas where possible."