Saudi Arabia Strengthens Voluntary Carbon Market Growth

Saudi Arabia is accelerating its transition to a low-carbon economy by expanding its voluntary carbon market, positioning it as a key pillar of the Kingdom's sustainability strategy.

Established in 2022 through a partnership between the Public Investment Fund (PIF) and Saudi Tadawul Group, the Voluntary Carbon Market Company supports Saudi Vision 2030, the Saudi Green Initiative, the Middle East Green Initiative, and the country's goal of achieving net-zero emissions by 2060 under the Circular Carbon Economy framework.

The voluntary carbon market enables government entities and private companies to trade certified carbon credits, allowing organisations to offset emissions while financing climate-positive projects.

Since its launch, the company has hosted major carbon credit auctions in Riyadh, Nairobi, and at COP29 in Baku, facilitating the sale of more than 15 million tonnes of carbon credits with transactions exceeding SAR350 million. These milestones demonstrate the Kingdom's growing role in regional and global carbon trading.

In November 2024, the company launched the Middle East's largest carbon credit trading platform, designed to meet international registry standards while supporting Islamic finance and multiple trading mechanisms, including auctions and off-exchange transactions.

To improve transparency and market integrity, it also signed a memorandum of understanding with the Clean Development Mechanism Designated National Authority (CDMDNA) to enable secure electronic data exchange for carbon trading activities.

Experts highlight that the voluntary carbon market is driving investment into renewable energy, waste management, land restoration, mangrove planting, ocean carbon capture, and other high-impact sustainability projects.

It is also helping diversify Saudi Arabia's economy, attract investment in low-emission technologies, develop environmental auditing and emissions verification capabilities, and support green hydrogen production.

As the global carbon market continues to expand, Saudi Arabia is establishing itself as a regional leader by combining robust governance, international standards, and climate-focused economic development.

Saudi voluntary carbon-market growth reshapes what regional carbon-credit availability looks like for Gulf corporates, and how credibility gets built matters for long-term market functioning. Our climate-action and responsible-investment teams help clients evaluate carbon-credit portfolio strategy and disclosure alignment.