RVCMC names Xpansiv to spearhead carbon credit exchange launch in Saudi Arabia

On April 25, 2024, the Regional Voluntary Carbon Market Company (RVCMC) publicised that it had selected Xpansiv, the leading provider of market infrastructure for the global energy transition, to provide technological support for the forthcoming Saudi Arabian carbon credit exchange. This decision represents a notable advancement toward RVCMC's goal of amplifying worldwide supply and demand to facilitate vital climate finance to regions in need within the Global South.

The establishment of the exchange stems from the triumph of RVCMC’s voluntary carbon credit auctions in October 2022 and June 2023, both of which marked unprecedented milestones as the largest-ever voluntary carbon credit auctions globally.

In June 2023, it was reported that RVCMC successfully sold over 2.2 million tonnes of carbon credits at the largest-ever voluntary carbon credit auction event in Nairobi, Kenya. It indicated active participation from 16 Saudi regional and international entities in an auction. Among the top buyers of carbon credits were Aramco, the Saudi Electricity Company (SEC), and ENOWA, a subsidiary of NEOM. Notably, the Saudi Arabian Mining Company (MA'ADEN) also secured a place among the successful bidders at the auction. Ma'aden is the largest multi-commodity mining and metals company in the Middle East and among the fastest-growing mining companies in the world.

RVCMC's selection of Xpansiv promises to furnish both buyers and sellers with top-tier institutional infrastructure, facilitating swift and secure transactions. With its established presence through CBL, the world's premier spot carbon credit marketplace, the forthcoming exchange will leverage Xpansiv's accessible market framework. This includes a fully automated, same-day settlement platform and a robust portfolio management system seamlessly integrated with prominent global registries.

RVCMC's stringent oversight of the exchange ensures the inclusion of carbon credit projects of utmost integrity. These projects, endorsed by independent standard setters, contribute to the advancement of the global energy transition. Contracts are meticulously crafted to adhere to industry best practices, with a deliberate and hopeful progression towards incorporating carbon removal initiatives.

Emerging markets and developing nations need $2.4 trillion annually by 2030 to meet the Paris Agreement's objectives and attain global net zero greenhouse gas emissions. The voluntary carbon market, anticipated to hit $3 billion by 2024 and projected to soar to $100 billion by 2030, serves as a crucial contributor to bridging this financial shortfall.

The previous two voluntary carbon credit auctions held by RVCMC resulted in the sale of 1.4 million tonnes in 2022 and 2.2 million tonnes in 2023, significantly boosting regional demand. The introduction of the new RVCMC exchange marks a significant step towards expanding carbon credit trading in Saudi Arabia and worldwide. This initiative aligns with the Kingdom's dedication to addressing climate change, as outlined in the Saudi Green Initiative and Vision 2030, by directing climate funding to areas requiring it the most.

Riham ElGizy, the CEO of RVCMC, said, "The world needs to use every tool at its disposal to tackle the devastating impacts climate change is already having. As our previous two auctions demonstrated, there is growing demand from leading businesses in Saudi Arabia to play their part."

"Developing a carbon credit trading exchange is the next step in RVCMC's mission to become one of the largest voluntary carbon markets in the world by 2030. Our work with Xpansiv will help us build the infrastructure the market needs for a thriving, transparent and increasingly liquid market, one that can maximize the role of carbon offsets in tackling climate change across the Global South."

John Melby, the CEO of Xpansiv, said of the partnership: “We are honoured to work with RVCMC to realise its vision of a new carbon market for the Middle East. We look forward to supporting the company’s mission to develop a marketplace that will channel carbon finance at scale, essential to realising the global energy transition at an accelerated pace.”

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