Saudi’s RVCMC to launch carbon credit exchange early next year

Part of startup’s efforts to ramp up carbon abatement projects
Saudi’s RVCMC to launch carbon credit exchange early next year
Carbon credits are instrumental in helping organizations reach climate goals

The Regional Voluntary Carbon Market Company (RVCMC), a Saudi government-backed carbon credit company, is planning to invest in more projects that seek to reduce carbon emissions. These endeavors will span the Middle East, Africa, and Southeast Asia. This is according to Chief Executive Officer Riham ElGizy, who was speaking to the publication AGBI.

Among its major endeavors is the launch of a carbon credit trading exchange in early 2024.

Saudi Arabia’s Public Investment Fund (PIF) and the Saudi Tadawul Group launched the startup in October. With its ambitious plans, it is on track to become a major player in the global carbon offset market.

Forecasts show that the voluntary carbon offset market could surge to $250 billion by 2050. These offsets are pivotal in helping companies and nations achieve their respective climate objectives. By acquiring “credits,” both private and public sectors can remove or reduce their carbon outputs. 

Carbon credit trading

RVCMC operates three major business units. In particular, these include advisory, investment, and its upcoming carbon credit trading exchange, which will cater to both spot and over-the-counter trading.

“We want to invest in projects to accelerate climate action and scale supply [of carbon credits] in our region and many regions. We want to be one of the top [carbon offset] markets by 2030,” outlined ElGizy.

Meanwhile, as RVCMC’s carbon credit trading exchange starts to gain substantial interest from brokers and developers, the chief executive also underscored the importance of having a rigorous due diligence process.

“Our market will really care about the integrity of the credits being traded. That’s why we will set certain criteria and thresholds of who can join and sell on the market,” she stated.

RVCMC carbon credit

Earlier in June, RVCMC’s endeavors gained traction when they hosted a substantial auction. Particularly, they were able to sell around 2.2 million tons of carbon credits. It is considered the largest of its kind globally. 

During the auction, carbon credits were sold to 16 Saudi companies including Saudi Aramco, Saudi Telecom Co, Saudi Basic Industries Corporation, and Saudi Electricity Co. The auction’s proceeds will fund various projects across Africa. These include renewable energy initiatives and efforts to provide cleaner cooking stoves.

Read: The GCC can lead the global push toward high-integrity carbon credit markets

Confident outlook

Amid recent fluctuations in carbon credit prices, the RVCMC CEO highlighted her optimism about the market. 

“The market isn’t material yet; it’s growing into maturity, so the more we correct early on, the better. There’s a lot of great things happening in terms of integrity and bringing confidence back to the market. There’s still demand,” ElGizy shared.

According to a 2021 McKinsey research, there could be a 15-fold demand increase in carbon credits by 2030. The estimated market value could hit up to $50 billion. 

Beyond trading carbon credits, RVCMC shows its commitment to curbing emissions with other undertakings. Recently, the company signed a memorandum of understanding with Nigeria’s Carbon Vista. The deal will allow them to co-invest in carbon credit-generating projects. 

Additionally, RVCMC’s consultancy service is also actively assisting buyers in formulating decarbonization strategies, emphasizing both avoidance and offsetting. 

“We work with our buyers on their decarbonization plans to make sure that they’re avoiding as much as they are offsetting. When we started there was zero supply, zero demand in our region,” elaborated ElGizy.

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