RIYADH - The Public Investment Fund of the Kingdom of Saudi Arabia today announced the signing of five non-binding Memoranda of Understanding with leading national entities, representing the first prospective partnerships for the voluntary carbon credit trading market in the Middle East and North Africa.

The signing of the memoranda comes after the Public Investment Fund announced with the Saudi Tadawul Group the voluntary market initiative for carbon credit trading in September 2021, in which His Royal Highness Prince Mohammed bin Salman bin Abdulaziz, Crown Prince, Deputy Prime Minister, Chairman of the Council of Economic Affairs and Development, praised the Managing the Public Investment Fund, with the Kingdom’s leading role in the region to confront the challenges of climate change and motivate institutions to reduce their carbon emissions, and as an extension of its efforts in this field aimed at contributing to improving the environment and reducing the negative effects of urban development, in addition to what His Highness the Crown Prince announced - his preservation God - during the Saudi Green Initiative forum, about the Kingdom’s goal to reach zero-neutrality in 2060, through the circular economy approach to carbon in line with the Kingdom’s development plans, and enable its economic diversification. This contributes to the development of the green economy, creating quality job opportunities, and providing huge investment opportunities for the private sector, in accordance with the Kingdom's Vision 2030.

The announcement of the agreements came during a signing ceremony held by the Public Investment Fund today, which included Saudi Aramco, Saudi Airlines, ACWA Power, Maaden, and NEOM's "INWA" company (the "Partners"). The memoranda includes the contribution of entities along with the Public Investment Fund to develop a voluntary market for carbon credit trading, through the supply, purchase and trading of carbon credits, once the market is established, which is expected to be in 2023. More partners are expected to join in the coming period before an initial round of auctions by last quarter of this year.

On this occasion, His Excellency the Governor of the Public Investment Fund, Mr. Yasser bin Othman Al-Rumayyan, said: “We extend our sincere thanks to all our partners for their commitment to the voluntary market for carbon credit trading, the first of its kind in the Middle East and North Africa. The contribution of these leading national entities is a strong evidence of the potential capabilities that will characterize this market.

His Excellency added: "The Public Investment Fund contributes to supporting the Kingdom's efforts to promote investment and innovation to counter the impact of climate change, and achieve zero carbon neutrality in the Kingdom by 2060."

Saudi Aramco President and CEO, Amin bin Hassan Al-Nasser, said: “Saudi Aramco is proud to be a partner in this pioneering initiative in the Middle East, launched by the Public Investment Fund to establish a voluntary carbon credits trading platform, which is in line with our ambition to achieve zero-band neutrality (1 and 2) in carbon emissions, in our fully owned and operated business facilities by 2050. Carbon credits are an important and effective tool to achieve carbon reduction goals in the global efforts to address climate change.”

His Excellency Eng. Ibrahim Al-Omar, General Manager of the Saudi Airlines Group, said: "Saudia, the national carrier of the Kingdom, plays a pivotal role in the carbon offset initiative and contributes to environmental sustainability efforts. Saudia's participation in the voluntary carbon market for the Middle East and North Africa is a significant event in the The journey of the national carrier, and we look forward to cooperating with the new market, which is one of the innovative initiatives of the Investment Fund, which will contribute to the prosperity of our future.”

ACWA Power Chairman Mohamed Abunayyan said: “To achieve the goal of carbon neutrality at the global level, resolute actions must be taken to reduce carbon emissions. There is no doubt that the launch of the voluntary market for carbon credit in the Middle East and North Africa will play an important role in achieving this goal. In addition to addressing the challenges of climate change, while allowing private investors, companies and non-governmental organizations to offset their carbon emissions, and transforming the Kingdom of Saudi Arabia into a global carbon trading hub, and based on our role in driving the energy transformation process by expanding renewable energy, water desalination and green hydrogen projects In this regard, we have an important role that we seek to play, and from this standpoint, we are honored to be among the first partners to contribute to the implementation of the roadmap through which the Kingdom’s vision seeks to achieve its ambitious efforts towards achieving carbon neutrality by 2060.”

Ma'aden CEO Robert Willet said: "We are always keen to keep pace with the ambitious vision of the leadership of the Kingdom of Saudi Arabia, to be the pioneers in protecting the environment not only locally, but regionally and globally through the Green Saudi Initiative and other projects aimed at reducing global warming, and reducing global warming. Carbon emissions, among the most important of these initiatives, is the strategic partnership between Maaden and the Public Investment Fund, to launch the voluntary market for carbon credit trading in the Middle East and North Africa, which is an important step towards enabling the Kingdom and the region to contribute

In addressing the challenges posed by global climate change, which aims to raise air quality and promote the health of the planet. We will continue to work closely with the Public Investment Fund and support the initiative by providing carbon credits; To support the Kingdom’s climate ambitions and achieve our goal of achieving zero emissions from our operations by 2050.” Peter Terium, CEO of ENOWA, a subsidiary of NEOM, stressed that NEOM, from the moment of its establishment, maintains a commitment to the principles of environmental sustainability that promote sustainable practices. Pointing out that the process of eliminating emissions using current technologies constitutes a significant financial burden, especially when eliminating certain sources of emissions completely is not a foregone conclusion in the short term, which calls for the need to find a practical solution in the medium term. NEOM, all sectors are working in perfect harmony to accelerate progress in innovation in carbon reduction and removal technologies, and support the efforts of the Kingdom of Saudi Arabia to reach carbon neutrality, which will have a very positive impact on the environment.

To reinforce this trend, he recently announced the establishment of ENOWA, a company specialized in energy and water, which is responsible for managing this path in the company.” And he indicated that the announcement of the first partnership to reduce carbon emissions in the Middle East and North Africa, is integrated with our business objectives and our vision of sustainability, We look forward to this pioneering initiative being a source of inspiration for other leaders in our regional environment.”

In addition to launching the voluntary market for carbon credit trading, it will link carbon credits to purchase orders from investors, companies and institutions that want to reduce carbon emissions, by offsetting the emissions they generate, thus effectively contributing to the market to reach zero carbon neutrality.

The voluntary market for carbon credit trading will seek high quality credits.

Companies and institutions in the Kingdom are uniquely positioned to supply and purchase high-quality certified carbon credits, as the voluntary market for carbon credit trading is expected to enable investors and companies across the region to realize their ambitions to reduce or neutralize their carbon footprint.

Carbon markets have witnessed rapid growth in recent years around the world, recording a compound annual growth rate of more than 30%, which has raised the value of these markets to more than one billion dollars according to data for the month of November 2021, and is expected to reach 15 billion dollars by 2030 .

In line with the Kingdom’s Vision 2030, the Public Investment Fund recently launched its green finance regulatory framework, which includes a number of initiatives that support this trend, including the establishment of a voluntary market for carbon credit trading.