Aramco and ACWA Power look to join Saudi carbon trading exchange

Aramco, the world’s biggest oil producer, and four other Saudi Arabian companies could become the inaugural members of the first carbon market in the Middle East under agreements announced on Tuesday.

The kingdom’s sovereign wealth fund, which is launching the exchange, signed non-binding memorandums of understanding with Aramco, utility ACWA Power, Saudi Arabian Airlines Corp., miner Maaden, and ENOWA, an energy and water firm, it said in a statement.

The five firms could potentially become the first partners for the Middle East and North Africa regional Voluntary Carbon Market, which the wealth fund launched last year in cooperation with the Saudi stock exchange.

Saudi Arabia launched the Saudi Green Initiative last year, which included commitments to reach net-zero planet-warming emissions by 2060 and plant 10 billion trees across the country. It’s also looking to become a major producer of hydrogen, considered an important part of the transition away from fossil fuels.

Plans to launch the exchange with the Saudi Tadawul Group, the stock exchange, were announced in September. Since then there has been no disclosure on how the exchange would work. Saudi Arabia has not yet announced any plans to force firms to cap their emissions or purchase offsets.

The Public Investment Fund, as the wealth fund is known, is a major investor in ACWA, Maaden, and Neom, while Governor Yasir Al Rumayyan is also chairman of Aramco.

The PIF said it would make further announcements about potential suppliers and buyers of carbon credits will be made in the coming months. There’s meant to be an introductory round of auctions in the fourth quarter.