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Aramco and 15 other Saudi and international companies this week bought more than 2.2 million tons of carbon credits in the largest-ever voluntary carbon credit auction, the organizers of the auction said.
The Regional Voluntary Carbon Market Company (RVCMC), the organizer of the auction held in Kenya, was launched at the end of last year by the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, the Saudi Tadawul Group Holding Company.
In the auction this week, Saudi Aramco, the world’s largest oil firm, purchased the largest number of credits, along with Saudi Electricity Company and ENOWA, a subsidiary of NEOM, the carbon market company said.
The basket of credits in the auction included 18 projects representing a mix of carbon dioxide (CO2) avoidance and removal, including projects such as improved clean cookstoves and renewable energy projects. Three-quarters of the carbon credits originated from countries across the Middle East, North Africa, and Sub-Saharan Africa, including Kenya, Uganda, Burundi, Rwanda, Morocco, Egypt, and South Africa.
“Our aim is to be one of the largest voluntary carbon markets in the world by 2030, one that enables compensation of hundreds of millions of tonnes of carbon emissions per year and contributes to global Net Zero goals,” said Riham ElGizy, Chief Executive Officer of RVCMC.
Last year, Aramco signed a Memorandum of Understanding (MoU) with PIF to support the establishment of the Regional Voluntary Carbon Market in Riyadh and participated in its inaugural auction, where 1.4 million carbon credits were sold, of which 650,000 were purchased by Aramco, the Saudi oil giant said in its 2022 Sustainability Report published on Thursday.
Carbon credits are a growing business for companies from all industries, and this market could be worth more than $50 billion in 2030, McKinsey has said.
Environmentalists, however, slam carbon credits as greenwashing. Carbon offsetting is “the next big thing in greenwashing,” Greenpeace has said, labeling the market as a “scam.”
“It’s a bookkeeping trick intended to obscure climate-wrecking emissions. It’s tree planting window dressing aimed at distracting from ecosystem destruction.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.