Voluntary Carbon Market And Enowa Partner To Deliver Over 30 Million Tons Of Carbon Credits By 2030

The Voluntary Carbon Market (VCM), initiated by the Public Investment Fund (PIF) and Saudi Tadawul Group, has partnered with Enowa, NEOM's energy and water subsidiary, to deliver 30 million tons of carbon credits by 2030. This agreement is a major step in VCM's goal to boost the voluntary carbon market in the region.

According to VCM's recent announcement, these carbon credits will primarily come from climate projects in the Global South. The credits will be traded on VCM's platform. The first delivery under this agreement has already occurred. "The long-term agreement between VCM and Enowa to facilitate the delivery of over 30 million tons of carbon credits by 2030 marks a significant moment in Saudi Arabia’s journey to drive growth in global voluntary carbon markets," said Riham ElGizy, CEO of VCM.

VCM launched Saudi Arabia’s first voluntary carbon credit exchange platform. This platform aims to provide a transparent and scalable marketplace for trading carbon credits. It offers institutional-grade infrastructure for secure transactions and data discovery, crucial for market growth globally.

The platform integrates with leading global registries and supports Islamic Finance through specialized trading infrastructure. Additional features like RFQ, block trade functionality, spot market, and more are set to launch by 2025.

Enowa has been actively participating in VCM’s auctions since 2022. These auctions were held in Saudi Arabia and Kenya. Jens Madrian, Executive Director Energy at Enowa, stated that Enowa is committed to meeting NEOM’s energy needs sustainably.

"Over the past two years, we have purchased high-integrity carbon credits from VCM’s auctions," Madrian noted. "This year, we are delighted to be the first company in Saudi Arabia to agree to a large-scale, long-term agreement with VCM."

Market Growth Projections

The voluntary carbon offset market is projected to expand significantly from USD 2 billion in 2020 to approximately USD 250 billion by 2050. To support this growth within Saudi Arabia and beyond, VCM's exchange offers buyers and sellers robust infrastructure for swift transactions.

VCM was established by PIF and the Saudi Tadawul Group in October 2022. PIF holds an 80% stake while the group owns 20%. Through its mandate for NEOM, Enowa exemplifies sustainable urban development worldwide.

This collaboration between VCM and Enowa not only addresses current emissions but also lays down sustainable infrastructure for future needs. It ensures funding certainty for climate action projects globally while promoting economic diversification and enhancing quality of life.

With inputs from SPA