The Regional Voluntary Carbon Market Company (RVCMC) has on the 14th June 2023 auctioned over 2.2 million tons of carbon credits in the largest-ever voluntary carbon credit auction. The RVCMC secured the first-ever Fatwa issued for carbon credits as an enabling commodity for Islamic finance in November 2022 following its inaugural auction.
The auction, which was held in Nairobi, Kenya, saw the participation of 16 Saudi entities including the International Islamic Trade Finance Corporation, which is the trade finance arm of the IsDB.
“This auction demonstrates the role voluntary carbon markets can play in driving funding where it is most needed, to deliver climate action and improve livelihoods across the global south,” Riham ElGizy, CEO of RVCMC, commented.
Three quarters of the carbon credits sold at the auction, comprising 18 CO2 avoidance and removal projects, originated from the Middle East and Africa including Kenya, Uganda, Burundi, Rwanda, Morocco, Egypt and South Africa.
Saudi Arabian Oil Group or Aramco, the Saudi Electricity company and NEOM subsidiary ENOWA were among the largest bidders for the auction, which cleared at SAR23.5 (US$6.26) per ton of carbon credits. The auction also notably saw participation from Saudi National Bank and Gulf International Bank.
The auction is the second auction effort from the RVCMC with the inaugural auction held on the 25th October last year. The debut auction, which previously held the title for the world’s largest voluntary carbon auction, sold 1.4 million tons of carbon credits to 15 participants.
According to Riham, the RVCMC hopes to become the largest voluntary carbon market in the world by 2030, enabling compensation of hundreds of millions of tons of carbon emissions per year.
The RVCMC was established as a joint effort between Saudi sovereign fund Public Investment Fund and the Saudi Tadawul Group in October 2022 following the joint voluntary carbon market initiative announced in September 2021.