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Saudi Arabia Aims for Global Carbon Market Share Equal to Regional Emissions

Riham ElGizy, CEO of Voluntary Carbon Market.
Riham ElGizy, CEO of Voluntary Carbon Market.
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Saudi Arabia Aims for Global Carbon Market Share Equal to Regional Emissions

Riham ElGizy, CEO of Voluntary Carbon Market.
Riham ElGizy, CEO of Voluntary Carbon Market.

Riham ElGizy, CEO of Voluntary Carbon Market (VCM), a Saudi company which is the first of its kind in the MENA region, said the company currently holds about 1.3% of the global carbon trading market.

In exclusive remarks to Asharq Al-Awsat during the Portfolio Egypt 2024 conference in Cairo on Monday, ElGizy predicted that by 2030, the company’s carbon trading volume could reach 100 million tons, making it one of the largest carbon markets worldwide.

“We aim to achieve a market share that matches the region’s carbon emissions,” she said.

Since 2013, global carbon emissions have exceeded 35 billion tons each year, with growth slowing in recent years. In 2021, Arab countries emitted over 2 billion tons of carbon dioxide, representing 5.45% of global emissions, according to European Union statistics.

The VCM enables companies, governments, and individuals to buy and sell credits that represent reductions in carbon dioxide emissions.

These credits can offset emissions that cannot be reduced through other methods, such as improving energy efficiency or using renewable energy sources. This market is increasingly viewed as an effective way to address climate change.

ElGizy announced that the company has increased the region’s carbon trading share from zero to 1.3% of the global market. This growth is attributed to two recent auctions held by the company.

Last year, around 200 million tons of carbon emissions were removed globally, equivalent to emissions from a country like Spain. ElGizy projected that the market’s trade value could reach $100 billion by 2030 and $250 billion by 2050.

According to the World Bank, carbon pricing revenues reached a record $104 billion in 2023.

In October 2022, the VCM held its first auction, selling about 1.4 million metric tons of carbon credits. The second auction in June 2023 sold around 2.2 million tons.

ElGizy announced plans for a third auction in November, expected to feature 2.5 to 3 million metric tons of carbon credits, coinciding with the launch of a new carbon trading platform at COP29 in Baku, Azerbaijan.

She emphasized that several Saudi and regional companies would participate in this auction, noting its significant size and impact. For perspective, she explained that the first auction's 1.4 million tons represented emissions from 250,000 family cars each year.

Looking ahead, ElGizy expects the company’s carbon trading volume to reach 100 million tons by 2030, positioning it among the largest carbon markets globally. She also highlighted the need for trade to shift from the Global North to the Global South and expressed a goal for Saudi Arabia to lead in regional carbon markets.

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Saudi Arabia Leads Int’l Efforts to Combat Climate Change, Land Degradation

Officials from the presidencies of the next three editions of the Conference of the Parties. (Asharq Al-Awsat)
Officials from the presidencies of the next three editions of the Conference of the Parties. (Asharq Al-Awsat)
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Saudi Arabia Leads Int’l Efforts to Combat Climate Change, Land Degradation

Officials from the presidencies of the next three editions of the Conference of the Parties. (Asharq Al-Awsat)
Officials from the presidencies of the next three editions of the Conference of the Parties. (Asharq Al-Awsat)

The presidencies of the next three upcoming Conferences of the Parties (COP) — Saudi Arabia, Azerbaijan, and Colombia — held a meeting on the sidelines of the United Nations General Assembly in New York to outline their ambitions regarding the three Rio Conventions.

Additional meetings are scheduled for the last quarter of this year to address the pressing challenges of climate change, desertification, and biodiversity loss.

The Rio Initiative takes its name from the historic agreements made at the 1992 Earth Summit in Rio de Janeiro, Brazil. It aims to foster cooperation in tackling land degradation, climate change, and biodiversity loss, while boosting international efforts under the United Nations' environmental agreements.

On Sunday, world governments gathered in New York to establish a framework for addressing the threats posed by climate change, desertification, and biodiversity loss. The meeting focused on enhancing cooperation between the upcoming COP presidencies.

The participants included Saudi Arabia, set to lead the 16th Conference of the Parties to the United Nations Convention to Combat Desertification (COP16); Azerbaijan, which will chair the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP29); and Colombia, which will head the 16th Conference of the Parties on Biological Diversity (COP16).

Saudi Arabia's presidency of COP16 highlighted the crucial importance of land restoration for the well-being of both people and the planet. It also underscored the devastating economic, social, and environmental impacts of land degradation and drought, which threaten biodiversity and increase greenhouse gas emissions, worsening food and water security challenges.

Dr. Osama Faqeeha, Saudi Arabia’s Deputy Minister of Environment, Water, and Agriculture, and advisor to the COP16 presidency, stated: "Climate change, biodiversity loss, and land degradation are interconnected aspects of the same crisis facing the planet, and they must be addressed in a more integrated and effective manner."

"This year presents a unique opportunity to unite efforts with Azerbaijan and Colombia and rally global support to address these interlinked environmental challenges, which have a destructive impact on the planet and its people," he added.

Colombian Minister of Environment and Sustainable Development Susana Muhamad emphasized the need for a unified agenda to be implemented on the ground. She expressed her readiness to establish a working group to bolster coordination and cooperation.

"The just transition in climate change must reflect interconnected efforts to protect natural ecosystems from degradation and harm," she said, adding: "We have a valuable opportunity to plan land use through a more integrated approach: decarbonization, environmental restoration, and improving human living conditions. COP16 for Biological Diversity is the ideal platform to deepen understanding and action on these efforts."

Mukhtar Babayev, president of COP29 for Climate Change, stressed the importance of "fostering cooperation, enhancing action efficiency, and achieving tangible results that benefit people and the planet by strengthening collaboration across the three Rio agreements."

He continued: "It’s essential to recognize that the goals of these agreements are fundamentally interconnected, and progress in one area can drive advancements in others."

Saudi Arabia called on governments attending the UN General Assembly to take decisive actions during COP16 for the United Nations Convention to Combat Desertification, which will be held in Riyadh in early December.

The UN Convention to Combat Desertification has set a target of restoring 1.5 billion hectares of degraded land by 2030. In Riyadh, Saudi Arabia's COP16 presidency will push for further concrete commitments to help achieve this goal.

The upcoming COP16 will be the largest and most comprehensive conference in the history of the convention, providing a global platform for collaboration. It will also offer opportunities for the private sector, civil society, and the scientific community to exchange solutions for combating land degradation, desertification, and drought.