The Egyptian government launched the first African voluntary carbon market, which will be based in Egypt, on the side lines of the COP27 climate summit on Wednesday.
The African Market for Carbon Certificates is a platform to help economic entities operating in various productive activities in Egypt and Africa to engage in activities to reduce carbon emissions and to benefit from the issuance and sale of certificates under the reduction for other companies wishing to offset their carbon emissions that are difficult to reduce.
Voluntary carbon markets help companies recover part of their investment spending directed to reducing carbon emissions resulting from the exercise of their activities and reinvesting these resources in achieving the greater goal of carbon neutrality that all countries of the world seek to achieve.
All relevant authorities, such as the Egyptian Stock Exchange and the Financial Regulatory Authority (FRA), will work to develop frameworks, business models, and organizational structures necessary to activate the new market, by adopting the value chain, which includes raising companies’ awareness and knowledge of the new market and the services provided through it, and how to access them and benefit from them in reducing carbon emissions, as well as setting the standards and controls necessary for the issuance and registration of these certificates, while ensuring the achievement of the highest levels of integrity and transparency in accordance with international standards in this regard.
In the same context, the market-related authorities are awaiting the issuance of the general framework regulating the new market, through the Prime Minister, especially after the decision to consider carbon certificates as a tradable and listing security in line with the goals of the Paris Climate Agreement.
Egypt for Carbon Neutrality
Egyptian Prime Minister, Mostafa Madbouly said the launch of the new voluntary market confirms the country’s capabilities to participate effectively in advancing efforts to achieve the international goal, which is carbon neutrality, in addition to the fact that the new market comes in line with the National Climate Change Strategy 2050, which is implemented by the Egyptian administration, and targets in its fourth pillar, strengthening climate finance infrastructure.
Egyptian Minister of Environment, Yasmine Fouad, affirmed that Egypt is ready to support Africa in the transition towards implementing climate action pledges through the Voluntary Carbon Platform.
FRA Chairman Dr Mohamed Farid said that the new voluntary African carbon market will serve as a pivotal market for the African continent to achieve carbon neutrality in accordance with international standards and enhance the level of involvement of African companies in accessing innovative climate finance.
Egypt will lead the development and implementation of the new market to be the African platform that provides its services with quality and efficiency to the African continent to maximize its benefit from all developments applied globally in relation to reducing carbon emissions, and to qualify it to issue carbon certificates under the reduction that can be traded to achieve commercial benefits.
Ramy El-Dakani, head of the Egyptian Stock Exchange, said that the new market will support the efforts of the African continent at the governmental and private levels towards achieving economic, environmental and social benefits, and accelerating and promoting the ambition of mitigation and adaptation through the creation of unified assets in the form of carbon credits.