Xpansiv selected to open carbon credit exchange in Saudi Arabia

The Regional Voluntary Carbon Market Corporation (RVCMC) announced its partnership with Xpansiv, a leading provider of market infrastructure in global energy transmission. The objective is to facilitate the technological backbone for RVCMC’s future carbon credit exchange in Saudi Arabia. It will be launched later this year.

RVCMC and Xpansiv Forge Path to Sustainable Trading

Established in October 2022, RVCMC was established by the Public Investment Fund (PIF) and Saudi Tadawul Group Holding Company. PIF owns 80 percent of the company’s shares, while Tadawul Group holds the remaining 20 percent.

With a shared vision, RVCMC is rapidly and ambitiously building a credible voluntary carbon market of global significance. The core of its mission is prioritizing high-quality carbon credits and preventive climate action.

RVCMC is leading the development of an ecosystem that includes the various components necessary for effective climate mitigation. This ecosystem includes the following financial tools and services:

  • An investment fund dedicated to financing climate mitigation projects.
  • A convenient exchange for trading carbon credits, and
  • Consulting services aimed at helping organizations navigate the complexities of decarbonization.

The decision to use Xpansiv stems from RVCMC’s effort to provide traders with enterprise-grade infrastructure, ensuring fast and secure transactions.

Xpansiv, known for launching CBL, the world’s largest spot carbon credit market, will equip the new exchange with its open access market infrastructure. It includes a fully automated, same-day settlement platform and a portfolio management system, both seamlessly integrated with the leading global registry.

RVCMC will apply strict criteria to the exchange to exclusively list carbon credit projects with high integrity. All of them are certified by independent standards, thereby strengthening the global energy transition.

Contracts will be carefully tailored to conform to industry best practices and include a gradual transition to decarbonization initiatives.

Fuel climate action: RVCMC’s role in global carbon markets

In order to meet the targets set out in the Paris Agreement and achieve the global goal of net zero greenhouse gas emissions, emerging markets and developing countries need to invest $2.4 trillion annually in climate action by 2030.

Global VCM, which is projected to reach $3 billion by the end of 2024, will play a critical role in bridging this funding gap. Projections suggest this market could grow to $100 billion by 2030, underscoring its importance in advancing climate mitigation efforts.

Projected growth in demand for carbon offsets

RVCMC’s voluntary carbon credit auctions have significantly increased demand in the region. They saw sales of 1.4 million tons in 2022 and 2.2 million tons in 2023.

The upcoming launch of the new RVCMC exchange will help boost carbon credit trading in Saudi Arabia and beyond.

Such development is in line with the Kingdom’s commitment to combating climate change, as outlined in this article Saudi Green Initiative and Vision 2030. The initiative aims to direct climate funding to areas of urgent need. It addresses climate concerns in three ways: reducing greenhouse gas emissions, expanding forests, and protecting land and sea areas.

Saudi Arabia's initiative

Riham ElGizy, CEO of RVCMC, emphasized the importance of trading carbon credits in achieving its goal of becoming one of the largest VCMs worldwide by 2030.

“Our work with Xpansiv will help us build the market infrastructure needed for a thriving, transparent and increasingly liquid market that can maximize the role of carbon offsets in tackling climate change across the Global South.”

John Melby, CEO of Xpansiv, echoed this sentiment, stating:

We look forward to supporting the company’s mission to develop a market that drives carbon finance at the scale necessary to realize a rapidly accelerating global energy transition.

Xpansiv is at the forefront of advancing the world’s energy transition through robust market infrastructure. The company’s Platform Solutions Group operates the world’s largest environmental commodity exchange, which includes carbon credits and renewable energy certificates.

Xpansiv Registry and Energy Solutions is a leading provider of registry infrastructure for the energy, power and environmental markets. In addition, Xpansiv Managed Solutions is also the largest independent platform for managing and selling renewable solar energy credits across North America.

With a shared vision of promoting high-quality carbon credits and proactive climate action, RVCMC and Xpansiv are committed to creating a transparent and liquid market that accelerates the global energy transition. As the world moves toward achieving net zero emissions, initiatives like the RVCMC Exchange play a critical role in mobilizing investment and driving effective climate mitigation efforts.

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