Saudi Arabia advances net-zero goal with landmark carbon credit deal

Arab News

a day ago

RIYADH: More than 30 million tonnes of high-integrity carbon credits are set to be delivered by 2030 under an agreement aimed at supporting Saudi Arabia's net-zero ambitions.
The long-term deal was signed between ENOWA — NEOM's energy and water subsidiary — and the Voluntary Carbon Market Co., a unit of the Public Investment Fund.
According to the Saudi Press Agency, the credits will be sourced from global climate action projects, primarily in the Global South, with the first batch scheduled for delivery via the market platform in December.
This agreement is a key step in the Kingdom's efforts to build a scalable voluntary carbon market, and will enable ENOWA to offset its current emissions as it develops renewable infrastructure to power NEOM's future sectors and projects.
The deal also contributes to Saudi Arabia's broader goal of achieving net-zero emissions by 2060 through the development of a robust carbon trading infrastructure focused on high-quality credits and meaningful climate impact.
'The long-term agreement with ENOWA aims to facilitate the delivery of more than 30 million tonnes of carbon credits by 2030. It represents a key milestone in the Kingdom's journey to drive growth in global voluntary carbon markets,' said Riham El-Gizy, CEO of the Voluntary Carbon Market Co.
'As ENOWA develops an advanced renewable and clean energy system to power NEOM's sectors and projects, this agreement will help it offset its current emissions and lay the foundation for long-term clean energy infrastructure,' she added.
VCM, which was established in October 2022 by PIF and the Saudi Tadawul Group, is 80 percent owned by the sovereign wealth fund. It operates a comprehensive ecosystem that includes an investment fund for climate mitigation projects, a carbon credit trading platform, and advisory services to support emissions reductions.
The global voluntary carbon market is projected to expand significantly, from an estimated $2 billion in 2020 to around $250 billion by 2050.
El-Gizy highlighted that the agreement also supports climate projects in the Global South by providing essential financing guarantees, helping developers plan with more certainty.
'To reach global net-zero emissions, climate-friendly projects that reduce or remove carbon from the atmosphere not only need funding but enhanced credibility,' she said.
Jens Madrian, acting CEO of ENOWA, emphasized the importance of the partnership for NEOM's sustainability goals.
'ENOWA is working to meet NEOM's energy needs sustainably. Over the past two years, we have acquired high-integrity carbon credits from the Voluntary Carbon Market auctions, and we are pleased to be the first company in the Kingdom to sign a long-term, large-scale agreement with the market,' he said.
The VCM launched Saudi Arabia's first voluntary carbon credit trading platform on Nov. 12, 2024. The system offers secure transactions, price discovery tools, and access to carbon credit project data — forming the backbone of the Kingdom's entry into the global market.
Integrated with international registries, the platform also supports Shariah-compliant infrastructure and includes features such as auctions, quote requests, and over-the-counter trading. A spot trading market is expected to launch in 2025.
ENOWA has previously participated in carbon credit auctions held in Saudi Arabia in 2022 and Kenya in 2023. These efforts align with NEOM's wider objectives of building a sustainable urban model, fostering economic diversification, and improving quality of life.