Energy Minister Prince Abdulaziz Bin Salman announced the launch of a market mechanism to offset and balance greenhouse gases "Carbon Equivalent".
The launch of the market mechanism would target the issuance of carbon certificates to stimulate the investments in projects to reduce the greenhouse gas emissions in all the sectors in Saudi Arabia. Prince Abdulaziz’s announcement came during two main forums, one of them was during the second edition of the Saudi Green Initiative that is being held in Sharm El-Sheikh which is hosting the COP27 Summit, while the second one was during the summit’s activities. The National Committee for the Clean Development Mechanism, which is the body responsible for issuing carbon certificates in Saudi Arabia, has followed the international best practices to come up with the market mechanism.
The National Committee has also took into account the national and regional circumstance by applying a holistic approach to the circular carbon economy, which adopts all the solutions to reduce the carbon emissions that were approved by the G20 in Riyadh Summit in 2020. The announcement of the market mechanism also comes in line with Saudi Arabia's climate goals and ambitions, which represent the Nationally Determined Contributions, as it targets to reduce the emissions by 278 tons annually from the carbon equivalent by 2030.
Saudi Arabia also aims to reach zero neutrality in 2060, in addition to joining the Global Methane Pledge to reduce the global emissions of methane gas to 30% by 2030, compared to 2020 levels. It is noteworthy that the Public Investment Funds (PIF) has announced the establishment of a voluntary platform for exchanging carbon certificates within the Middle East and North Africa (MENA) Region.
It has also established the Regional Voluntary Carbon Market Company to support companies and sectors in the region, which would enable them to reach zero neutrality. This platform is considered as one of the possibilities to achieve the market mechanism goals for offsetting and balancing the greenhouse gases.