Egypt has launched its first regulated voluntary carbon market, a remarkable step towards achieving economic and environmental sustainability. The market, which allows for the registration, issuance, and trading of carbon reduction certificates, signifies Egypt’s commitment to mitigating climate change through innovative policies.
Catalyst for climate change mitigation
At a conference held at the Financial Regulatory Authority (FRA) headquarters in the Smart Village, Minister Al-Mashat announced the completion of regulatory frameworks for carbon reduction projects. She emphasized that the launch of the market signifies Egypt’s commitment to innovative policies aimed at mitigating climate change.
World Bank supports Egypt’s green transition
The Minister further explained that the establishment of this market is a result of collaboration between all relevant parties, including development partners. She highlighted the crucial role of the Development Policy Financing Program, implemented by the Ministry in partnership with the World Bank, which has provided support through structural reforms and technical assistance. This assistance enabled the FRA to issue three key decisions regarding local carbon markets.
Additionally, the launch, a result of collaboration with development partners, is supported by the Development Policy Financing Program implemented by the Ministry of Planning and Economic Development with the World Bank. This program has provided structural reforms and technical assistance to the Financial Regulatory Authority (FRA) to issue key decisions regarding local carbon markets.
Financing a greener future
The new market will further boost Egypt’s regional leadership in the green economy. Carbon markets incentivize companies to reduce emissions by providing “carbon credits” that can be traded and sold, providing financing for green transitions. This aligns with Egypt’s Vision 2030 and National Climate Change Strategy 2050, aiming to balance economic and environmental development while mitigating climate change impacts.
Read more: Egypt ramps up initiatives to speed up transition to low carbon economy
Moreover, the move is a key recommendation emphasized by development partners, including the World Bank and OECD, and is expected to attract private capital and enhance liquidity in the financial markets. The Ministry of Planning and Economic Development is collaborating with the World Bank and the European Union to further develop the carbon market ecosystem and make Egypt a regional hub.
Furthermore, the launch of the voluntary carbon market is a crucial step towards a mandatory carbon market, which will involve identifying carbon reduction projects, calculating emissions across sectors, and establishing a robust Monitoring, Reporting, and Verification (MRV) system.
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