{"id":31606,"date":"2023-06-26T06:20:21","date_gmt":"2023-06-26T06:20:21","guid":{"rendered":"https:\/\/sustainablesquare.com\/?p=31606"},"modified":"2023-06-27T08:48:07","modified_gmt":"2023-06-27T08:48:07","slug":"saudi-led-carbon-credits-auction-a-watershed-moment-for-africa","status":"publish","type":"post","link":"https:\/\/sustainablesquare.com\/wp.old\/saudi-led-carbon-credits-auction-a-watershed-moment-for-africa\/","title":{"rendered":"Saudi-led Carbon Credits Auction, a Watershed Moment for Africa"},"content":{"rendered":"\t\t
\n\t\t\t\t\t\tThe plan comes at a time when Africa produces only a tiny percentage of its carbon credit potential and aims to produce 300 million carbon credits annually by 2030, and 1.5 billion credits annually by 2050. It is expected to unlock USD 120 billion in revenue by 2050. \t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t<\/div>\n\t\t\t\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t On 14th June 2023, Kenya’s capital Nairobi was host to what\u2019s been termed the largest voluntary carbon market auction event, where over 2.2 million carbon credits were sold. The carbon credits were traded on voluntary bids made on 18 projects that utilize sustainable technologies, initiatives that reduce emissions from the atmosphere.<\/p> Organized by the Regional Voluntary Carbon Market Company (RVCMC), the event saw 16 Saudi based companies buy certified credits in projects across countries such as Kenya, South Africa, Burundi, Rwanda, Morocco and Uganda representing Sub-Saharan Africa and the MENA regions.<\/p> According to RVCMC, high-quality\u202fCORSIA-eligible and Verra-registered carbon credits were offered, enabling buyers across a range of industries to participate.<\/p> Carbon Credits<\/span><\/span>\u00a0<\/span><\/strong><\/p> In the carbon market, individuals and companies purchase or sell certified carbon credits to compensate or offset carbon emissions.<\/p> One carbon credit is equal to one tonne of carbon dioxide (CO2) or the equivalent amount of a different greenhouse gas (CO2e). The recent event therefore represented over 2.2 million tonnes of CO2 emissions reduced or sequestered from the atmosphere. Buyers paid 23.50 Saudi riyals (USD 6.27) per carbon credit.<\/p> So, <\/span>what\u2019s<\/span> the fuss all<\/span> about?<\/span><\/span>\u00a0<\/span><\/strong><\/p> This auction comes at a time when there\u2019s a global need for a sustainable solution towards addressing climate change impacts. Effective action is imperative bearing in mind the potentially higher costs of inaction. This calls for concerted efforts and sufficient investment. Developing countries need at least USD 6 trillion in climate finance by 2030<\/a>, and that is projected to cover only half of their climate action goals.<\/p> The auction demonstrates the potential of carbon markets to accelerate climate financing in emerging markets such as sub-Saharan Africa. Global carbon markets stand to offer the region incredible climate financing opportunities while promoting socio-economic progress by creating job opportunities, expanding energy access and protecting biodiversity.<\/p> R<\/span>ace<\/span> to Net Zero<\/span><\/span>\u00a0<\/span><\/strong><\/p> Since the signing of the Paris Agreement in 2016, there has been a growing commitment from governments, NGOs and the private sector towards decarbonization of their activities. Companies in various industries have made commitments towards achieving net zero in their operations with strategies and policy commitments in place. With more companies aiming for net-zero emissions by 2050, the demand for carbon offsets will likely go up.<\/p> Aramco, one of the largest bidders in the recent Nairobi auction, announced in their 2022 ESG report its ambition to achieve net zero Scope 1 and Scope 2 greenhouse gas (GHG) emissions across its assets by 2050. Voluntary carbon markets will play a significant role to complement such efforts, by accelerating the demand for carbon offsets and therefore encouraging projects such as those offered in the recent auction.<\/p> The ACMI<\/span><\/span>\u00a0<\/span><\/strong><\/p> There are concerted efforts towards creating high quality and high integrity carbon markets for generation and trade of credits.<\/p> In 2022, the Africa Carbon Markets Initiative (ACMI) was launched on the sidelines of the United Nations Climate Change Conference (COP27) held in Egypt. The initiative is led by a 13-member steering committee of African leaders and carbon credit experts and is tasked to expand Africa\u2019s voluntary carbon markets capabilities while creating job opportunities.<\/p> According to ACMI secretariat, the plan comes at a time when Africa produces only a tiny percentage of its carbon credit potential and aims to produce 300 million carbon credits annually by 2030, and 1.5 billion credits annually by 2050. It is expected to unlock USD6 billion in revenue by 2030 and over USD 120 billion by 2050.<\/p>