Carbon Trade… Global Interest, Saudi Action

Young people plant trees around the Saudi capital, Riyadh, to reduce carbon emissions. (Asharq Al-Awsat)
Young people plant trees around the Saudi capital, Riyadh, to reduce carbon emissions. (Asharq Al-Awsat)
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Carbon Trade… Global Interest, Saudi Action

Young people plant trees around the Saudi capital, Riyadh, to reduce carbon emissions. (Asharq Al-Awsat)
Young people plant trees around the Saudi capital, Riyadh, to reduce carbon emissions. (Asharq Al-Awsat)

Amid talk of global carbon dioxide emissions rising by about 1 percent this year, which will make climate-warming gases reach a new record level, calls are mounting to take immediate action to preserve nature, climate, health and the entire planet.

In the face of these concerns, a new commercial trend is emerging in international markets, the “carbon trade” between countries, companies, and individuals.

According to the United Nations definition, the UN Carbon Offset Platform is an e-commerce platform where a company, an organization or a regular citizen can purchase units (carbon credits) to compensate for greenhouse gas emissions or to simply support action on climate.

The UN adds that the main feature of this platform is to display UNFCCC-certified climate friendly projects that reduce, avoid or remove greenhouse gas emissions from the atmosphere. These projects are implemented in developing countries around the world and are rewarded with Certified Emission Reductions (CERs) for each ton of greenhouse gas they help reduce, avoid or remove.

A study by the International Emissions Trading Association and the University of Maryland indicated that national climate action plans, collaboratively through carbon trading, could save governments more than $300 billion annually by 2030, which has increased global interest in the carbon market.

In fact, one of the key outcomes of the 2021 UN Climate Change Conference (COP26) held in Glasgow was the establishment of Article 6 regulating carbon markets under the UNFCCC.

A “carbon market” could contribute to tougher climate action by enabling governments and entities to trade carbon credits resulting from reducing or removing greenhouse gases from the atmosphere, such as phasing out fossil fuels, switching to renewable energy, or conserving carbon stocks in ecosystems such as forests.

Carbon trade in Saudi Arabia

Recognizing the opportunities provided by carbon trading, through financing projects and activities in the Middle East and North Africa, the Regional Voluntary Carbon Market Company in Saudi Arabia, which was established by the Public Investment Fund last year, plays a major role in expanding the scope of the voluntary carbon market and encouraging sustainable business and climate practices.

In October 2022, the company oversaw the sale of more than 1.4 million tons of carbon credits, the largest share of which was purchased by the Olayan Finance Company, Aramco, and the Saudi Arabian Mining Company (Maaden).

The Regional Voluntary Carbon Market is scheduled to host a conference on Oct. 26 on carbon markets in countries of the Global South to agree on a list of actions that must be taken before the 28th Conference of the Parties (COP28).

The Carbon Markets in the Global South - Riyadh Edition will be held within the Future Investment Initiative conference to review the most prominent challenges of strengthening voluntary carbon markets at the global level to reduce carbon emissions. The conference will be held in cooperation with S&P Global Commodity Insights.



China's Yuan Hits Post Financial Crisis Low as Trade War Ramps Up

A Chinese Yuan banknote, US and Chinese flags are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration
A Chinese Yuan banknote, US and Chinese flags are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration
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China's Yuan Hits Post Financial Crisis Low as Trade War Ramps Up

A Chinese Yuan banknote, US and Chinese flags are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration
A Chinese Yuan banknote, US and Chinese flags are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration

China's yuan hit its lowest against the dollar since the global financial crisis on Thursday, with the central bank cutting guidance for the sixth successive trading session amid an intensifying Sino-US trade war.

Beijing has imposed steep tariffs on US imports in response to similar US action. Though US President Donald Trump said he would temporarily lower duties recently imposed on dozens of countries, he increased those on Chinese goods.

"The US and China are currently in a powerplay game of brinkmanship," said ING global head of markets Chris Turner.

"Until a deal is announced or a big, bilateral meeting confirmed, USD/CNY will now be the focal attention of the FX market."

A weaker yuan would make Chinese exports cheaper and alleviate tariff impact on the economy. However, a sharp decline could also increase unwanted capital outflow pressure and risk financial stability, analysts and economists said.

The central bank will not allow sharp yuan declines and has instructed major state-owned lenders to reduce dollar purchases, people with knowledge of the matter told Reuters.

The onshore yuan slipped to 7.3518 a dollar in early trade, its weakest since December 26, 2007. It pared intraday losses and traded 0.02% higher at 7.3428 as of 0516 GMT, but was still down about 1.2% this month.

Its offshore counterpart was at 7.3558 at 0516 GMT, down 0.14%. It hit an all-time low of 7.4288 on Tuesday.

Prior to market open, the People's Bank of China set the midpoint - around which it allows the yuan to trade in a 2% band - at 7.2092, the weakest since September 11, 2023. That compared with the 7.3484 Reuters estimate.

The central bank has been lowering the midpoint at a measured pace, with Thursday's cut contributing to the day's decline, traders said.

The PBOC loosened its grip on the yuan this week by allowing the currency to weaken past 7.2. Still, its guidance is stronger than market projections in what traders and analysts interpreted as an attempt to keep the yuan steady.

The steadily weaker guidance dragged down its value against major trading partners. The CFETS yuan basket index, a gauge that measures the yuan against a basket of currencies, fell to 98.18 on Thursday, the lowest since September 2024, according to Reuters calculations based on official data.

The bank is focusing on a steady yuan even as the trade war challenges the competitiveness of China's export sector, indicating that stability remains the priority.

"A modest, gradual depreciation of the yuan is still the preference," Societe Generale economists said in a client note.

China will only allow gradual depreciation as stability matters for confidence in Chinese assets, and the tariffs are "just too big to be offset by FX depreciation," they said.

Separately, China and Hong Kong shares rose on Thursday. The Hong Kong dollar hovered near a four-year high against the dollar on persistent inflows through the southbound leg of the stock trading link. It last traded at 7.7616 as of 0516 GMT.

Mainland investors purchased more than HK$35 billion ($4.51 billion) worth of Hong Kong stocks on Wednesday, the highest on record.

Marco Sun, chief financial market analyst at MUFG Bank, said a strong Hong Kong dollar was critical for the financial hub during times of heightened financial market volatility.

"And the renminbi is likely to enter a period of orderly depreciation," he said.