Kenya has made history by selling over 2.2 million tonnes of Carbon Credits to Saudi Arabian firms at the Nairobi Auction. This is the largest transaction of its kind in the world. The auction was attended by delegates from Kenya, Rwanda, Egypt, and South Africa, making it the largest sale of carbon credits ever held. Among the 16 Saudi firms that participated in the auction were Aramco, Saudi Electricity Company, and Saudi Airlines.
The Regional Voluntary Carbon Market Company (RVCMC) organized the auction. The CEO of RVCMC, Riham ElGizy, stated that the carbon credits auctioned from Kenya come from projects that reduce emissions through the use of sustainable technologies or carbon removal from the atmosphere. RVCMC chose Nairobi as the auction destination due to the emerging climate change issues in Africa. The company plans to establish a full-time exchange in Riyadh by the first half of 2023.
The demand for carbon offsets, which are generated through projects like tree planting or clean fuel usage, is expected to grow as companies strive to achieve net-zero emissions goals. The voluntary carbon market allows companies to invest in projects that capture and store climate-warming emissions. However, concerns about the quality of some projects have led to calls for stricter regulations.
Experts predict that the global voluntary carbon credit market could reach $50 billion by 2030. McKinsey, a consultancy firm, projects this growth amid concerns about the market’s lack of transparency and limited supply of credits. RVCMC addresses these concerns by working with independent teams of experts to vet projects and ensure their credibility.
As more companies worldwide aim for net-zero emissions by 2050, the demand for carbon offsets is expected to increase. However, it is crucial to address the quality and transparency concerns associated with the carbon offset market. Stricter regulations and independent verification will be necessary to build trust and ensure the effectiveness of the voluntary carbon market.