PIF announces first partners of Voluntary Carbon Market for MENA region

Logo of Public Investment Fund

The Public Investment Fund (PIF) announced today, March 22, that five leading Saudi Arabian businesses have each signed a separate non-binding memorandum of understanding (MoU) to become the first potential partners of the MENA regional Voluntary Carbon Market (VCM).

Today’s news follows the announcement of the VCM initiative by PIF and Tadawul in September 2021, the fund said in a statement.

The partners announced are Aramco, SAUDIA, ACWA Power, Ma’aden, and ENOWA, a subsidiary of NEOM, (the Partners).

The Partners will support PIF in the development of the VCM through the supply, purchase and trading of carbon credits as the market is expected to be established in 2023.

Additional partners will be announced in the coming months ahead of an initial round of auctions expected in the final quarter of this year.

The VCM will connect the supply of carbon credits with demand from investors, corporates and institutions wanting to reduce their carbon footprint by offsetting carbon emissions they generate.  While corporates’ internal decarbonization targets should remain the priority, the VCM can effectively complement their efforts until and when they reach net zero. The VCM will seek out carbon credits possessing the highest integrity and quality.

Carbon markets have grown rapidly in recent years across the world, with a CAGR of 30% to reach a value of more than $1 billion of traded value as of November 2021, and could grow another 15x by 2030 according to the Taskforce on Scaling Voluntary Carbon Markets. 

In its recently published Green Finance Framework, and in line with Vision 2030, PIF set out a number of broad initiatives to help it achieve its goal to be a leader in ESG, including the establishment of a VCM.