SAUDI LEADS MENA IN JOURNEY TO COMBAT CLIMATE CHANGE
Saudi Arabia took a major step in fighting climate change with the announcement of carbon credits by the country’s two major financial powerhouses.
The sovereign wealth fund Public Investment Fund (PIF) and the Saudi Tadawul Group said it has created a Riyadh Voluntary Exchange Platform for offsets and carbon credits within the Middle East and North Africa (MENA) region.
The initiative will become the primary platform for companies and institutes seeking to reduce their emissions, or contributing towards that goal, through the trading of verified, approved carbon equivalent credit certificates.
“The voluntary exchange platform establishment will come as part of extended alignment efforts with regulatory entities, such as the Designated National Authority for Clean Development Mechanism (DNA), along with local and international expertise to identify the best regulatory and operational methodologies, business models, and governance practices that align with best global standards in order to establish a voluntary exchange platform, which will support the reduction of climate change effects, as well as to contribute to Paris Agreement goals,” the companies said.
SUSTAINABILITY IS KEY
Saudi Arabia is taking a leading role in the region to curb carbon emissions and create an environment for businesses to thrive in a sustainable manner.
“These efforts are part of Saudi Arabia’s leading role within the region to contribute to the reduction of climate change effects as part of several initiatives that were launched with that regard, through pursuing additional methodologies such as creating a motivational environment for companies and institutes to reduce their emissions,” said His Royal Highness Prince Mohammad bin Salman bin Abdulaziz Al Saud, crown prince, deputy prime minister, chairman of the Council of Economic and Development Affairs, and chairman of the PIF.
“Moreover, and taking Saudi Arabia capital market strength, its initiatives and aspirational projects into consideration, we are well-positioned to incubate and host this exchange platform.”
The companies are pledging to create a suitable environment for the voluntary exchange platform, and leverage the sovereign wealth fund and the financial services companies strength and financial acumen.
PIF is also a participant in the One Planet Sovereign Wealth Funds Working Group, which aims to accelerate efforts to integrate financial risks and opportunities related to climate change in the management of large, long-term asset pools.
“In addition to that, PIF has several strong enablers, being that Saudi Arabia is the home of several companies and institutes that aim to reduce their greenhouse gas emissions, in addition to having international partners who are interested in investing within this area,” according to the Saudi Press Agency.
NEW PROJECTS
New renewable energy projects are also expected to be launched in the kingdom after the Ministry of Energy said it has allocated two pieces of land, located in the Jeddah 3rd Industrial City and the Rabigh Industrial City, with a combined area of 12 million square metres for the development of two renewable energy plants by the Saudi Authority for Industrial Cities and Technology Zones (MODON).
“Locations of renewable energy projects are selected by a Saudi team of technical specialists to ensure the highest electricity production efficiency possible, in co-operation with various entities to identify potential locations and make available the necessary land,” the Ministry of Energy noted.
The focus on renewable energy is part of the kingdom’s ambition to generate 50% of its electricity through renewable energy sources by 2030.
In June, the Minister of Environment, Water and Agriculture awarded a contract to develop the 570,000-cubic-metre-per-day Jubail 3B Independent Water Plant Project.
The project will deploy "reverse osmosis" technology and serve Riyadh and Qassim regions.
“This strategic project will also include solar energy units to reduce the electricity consumption from the grid, in addition to water tanks with a storage capacity of one operational day,” the ministry said.
Meanwhile, other companies are also deploying innovative technology to reduce their carbon footprint and develop sustainable practices.
The Red Sea Development Company (RSDC), on the kingdom’s west coast, said it has launched the first station to produce water fully extracted from sunlight and air, as part of its sustainable programme.
The water extraction station, powered by solar energy, will have the capacity to produce two million recyclable bottles with a total of 330 millimetres annually. The water collection and bottling facility will reach carbon neutrality and dispose of non-recyclable plastic bottles.
“Moreover, 100 hydrogen panels will be installed, while expansion plans in the second and third phases will include installing 1,200 hydrogen panels in total, in addition to providing the station with necessary machinery and equipment, as well as the recyclable bottles from companies inside the Kingdom of Saudi Arabia,” the company said.
Earlier in the year, the RSDC also secured a SAR 14.12 billion loan and first ever riyal-denominated green finance credit facility to build the massive leisure and tourist destination.
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