Oil and gas giant Saudi Arabian Oil Co. (Aramco) and other Saudi and international companies purchased over 2.42 million tons of carbon credits at the Regional Voluntary Carbon Market Company (RVCMC) auction held in Nairobi, Kenya on Monday, the RVCMC said.

A total of 16 Saudi and international firms participated in the auction, with Aramco, Saudi Electricity Company (SEC), and NEOM subsidiary ENOWA purchasing the largest number of carbon credits, the RVCMC said in a news release Thursday.

The auction beat the previous record for the largest-ever voluntary carbon credits sold, which was 1.54 million tons (1.4 million metric tons) in October 2022, the RVCMC said. The auction clearing price was $6.27 (SAR 23.50) per metric ton of carbon credits.

Carbon credits are certificates that represent the reduction, avoidance, or removal of one ton of carbon by a specific activity.

Two of the globally accepted carbon credit standards are the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and the Verified Carbon Standard of Verra. The auction sold “high-quality CORSIA-eligible and Verra-registered carbon credits which can enable buyers operating in a range of industries to play their part in the global transition”, RVCMC said.

The carbon credits offered at the auction included 18 projects representing a mix of carbon dioxide avoidance and removal, such as improved clean cookstoves and renewable energy projects. Three-quarters of the carbon credits originated from countries across the Middle East, North Africa, and Sub-Saharan Africa, including Kenya, Uganda, Burundi, Rwanda, Morocco, Egypt, and South Africa, the news release said.

“This auction demonstrates the role voluntary carbon markets (VCM) can play in driving funding where it is most needed, to deliver climate action and improve livelihoods across the Global South”, RVCMC CEO Riham ElGizy said.

RVCMC was founded by Saudi Arabia’s Public Investment Fund and the Saudi Tadawul Group to “offer guidance and resourcing to support businesses and industry in the MENA region as they play their part in the global transition to Net Zero”, according to the news release. Its objectives include an “investment fund for climate mitigation projects, an exchange for the trading of carbon credits, and advisory services that help organizations understand how to decarbonize”.

"Our aim is to be one of the largest voluntary carbon markets in the world by 2030, one that enables compensation of hundreds of millions of tonnes of carbon emissions per year and contributes to global Net Zero goals”, ElGizy said. “Our achievements to date, in such a brief period, demonstrate commitment to long-term success, and ability to deliver on our ambitions."

According to an earlier report by S&P Global Ratings, momentum is growing for VCM, which could indicate that “some stakeholders believe carbon credits can support decarbonization claims”. The report said “potential issues can arise for carbon credits that are based on perceived benefits that can be difficult to substantiate or simply lead to adverse effects elsewhere”.

The World Bank reported a significant increase in VCM activity in the last five years, with 275 million voluntary credits issued in 2022, while Ecosystem Marketplace estimated the market value of VCM at $2 billion, according to the report. Although this represents only a fraction of current global emissions, demand is expected to increase substantially, the report said.

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