RVCMC plans to launch voluntary carbon market platform in H1 2024: CEO

Riham ElGizy, CEO of Regional Voluntary Carbon Market Co. (RVCMC)

Regional Voluntary Carbon Market Co. (RVCMC) intends to launch a platform for the voluntary carbon market during the first half of 2024 to connect seller and buyer, and ensure optimal price through a carbon certificate auction, CEO Riham ElGizy told Argaam in an exclusive interview.

She explained that the company does not aim to make a profit in the current period, as it is working on leadership and creating a market by pumping investments in order to achieve profits later.

The size of the carbon market reached $2 billion by the end of 2022, while the growth rate in the last five years has accelerated to reach more than 30%, she noted, expecting the market to continue to grow by 15-20% by 2030.

ElGizy pointed out that companies that have international standards in environmental, social and corporate governance or emission reduction standards are the biggest beneficiaries of the carbon market. These companies are able to sell and buy carbon from any international company, as the market is global and aims to reduce emissions and improve livelihoods.

On the voluntary carbon market, RVCMC CEO explained that it is similar to trading in the commodities market. Here, it is a certificate that issues one ton of carbon, which is measured based on international standards, where sellers in the market are project developers and profit is made by issuing carbon certificates and working through cooking stoves.

She added that a buyer represents companies that have climate commitments to reduce emissions and buys certificates to reduce these emissions. She pointed out projects in Kenya include cooking stoves aimed at reducing carbon emissions, improving health and others.

In October 2022, RVCMC hosted its first auction at the 6th Future Investment Initiative (FII) in Riyadh. During the auction, 1.4 million tons of carbon credits were sold with the participation of several companies, including 15 Saudi entities.

The second auction held in Nairobi, Kenya, was the largest in the world, with 2.2 million tons of carbon sold, representing 70% of the supply in Africa, by developers from Rwanda, Uganda, Kenya, South Africa and other companies, ElGizy said.

She explained that the auction witnessed a large turnout with Saudi and regional participation from Saudi Aramco, SABIC, stc, Saudi Airlines, Saudi Electricity, NEOM, Yanbu Cement, Gulf International Bank, International Islamic Corporation, Greek Shipping Company and others.

The company plays an influential and effective role not only in Saudi Arabia but in the southern Arab region and aspires to accelerate climate action, face its changes and improve livelihoods in the global south by pumping investments in this field, while maintaining credibility and integrity by introducing and activating the international carbon market.

She stated that the company is going through three tracks. The first aims to increase supply through investments by the Public Investment Fund (PIF).

The second track is consulting which works to help the company accelerate and reduce the carbon footprint, while the third track is the exchange platform, which is very important as it works to discover the optimal price for the market.

The CEO pointed out that the company seeks to expand its presence in the market and have an effective role on the ground, indicating that it is also working with the municipalities in Saudi Arabia to help them register their projects such as afforestation projects and issue carbon credit balances to sell in the region or Saudi Arabia.

According to data available on Argaam, the Public Investment Fund (PIF) established RVCMC in October 2022, with a capital of SAR 500 million. It is 80%-owned by the fund and 20% by Saudi Tadawul Group Holding.