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Mashat :Trading carbon credits can halve cost of implementing NDCs worldwide by $250 bn
– Mashat: Launching Egypt’s first voluntary carbon market opens vistas for South-South cooperation with Africa
– World Bank provided technical support for Egypt’s launch of the first voluntary carbon credit trading market
Minister of Planning, Economic Development and International Cooperation Rania Mashat said trading carbon credits could almost halve the cost of implementing Nationally Determined Contributions (NDCs) worldwide by $ 250 billion by 2030.
She highlighted that Egypt’s launch of the first voluntary carbon trading market will enhance the contribution of the green economy to gross domestic product (GDP), including boosting green investments, in addition to opening vistas for South-South cooperation with Africa.
Mashat noted that the launch of Egypt’s first voluntary carbon trading market is the fruit of cooperation among various stakeholders, including development partners, referring to the World Bank’s support for Egypt’s launch of the carbon market.
The ministry implemented the Development Policy Financing Program in tandem with the World Bank to support the establishment of this market by enhancing structural reforms and providing technical support to the Financial Regulatory Authority.
This support included issuing three decisions concerning local carbon markets; registration requirements for accreditation and verification bodies, authorization requirements for carbon credit registrations, and authorization requirements for commercial carbon credit registrations.
The ministry will continue to implement the Development Policy Financing Program with the World Bank and other partners to support structural reforms promoting green transformation, she highlighted.
She asserted that carbon markets are effective tools that encourage companies to reduce harmful emissions by providing tradable carbon credits for investors and businesses struggling to cut their emissions. This mechanism is not only a tool for emission reduction but also an effective means of securing necessary financing for green transformation.
Mashat noted that the launch of Egypt’s carbon market represents a step towards becoming a regional leader in the field of green economy.
Mashat added that carbon markets are an important global mechanism for reducing harmful emissions and represent an innovative financing model recommended by the “Sharm El-Sheikh Guidebook for Just Financing,” launched by Egypt during the 27th United Nations Climate Change Conference (COP27). This model is mentioned in the fourth section on blended finance due to its role in providing financial returns that enhance climate action.
Mashat emphasized that this initiative aligns with Egypt’s Vision 2030 and the National Climate Change Strategy 2050, and contributes to Nationally Determined Contributions. It aims to balance economic and environmental development by mitigating the adverse effects of climate change while maintaining economic growth.
It also reflects Egypt’s leading role in supporting Africa’s Agenda 2063 to create sustainable and resilient regional economies and societies.
Mashat noted that energy projects under the “NWFE” program are among the country’s efforts to achieve the National Climate Change Strategy’s goals by reducing approximately 17 million tons of CO2 emissions annually. In this regard, the ministry collaborates with various entities, including the Transformative Carbon Asset Facility (TCAF) of the World Bank, which aims to reduce carbon emissions.
Mashat noted the Country Climate and Development Report (CCDR) issued by the World Bank Group in November 2022 highlighted the need for a carbon credit market as part of Egypt’s low-carbon future strategy. Additionally, the OECD report on “Green Growth Policies in Egypt,” under the country program with the government, recommended establishing a carbon trading market on the Egyptian stock exchange as a positive step towards involving the private sector in climate action and encouraging Egyptian companies to invest in mitigation projects.
Mashat noted that the ministry is collaborating with the World Bank on the Joint Capital Market Program (J-CAP). This program supports the Financial Regulatory Authority, the Ministry of Environment, and several national entities in strengthening infrastructure to attract private capital to Egypt and enhance liquidity in financial markets. This includes developing the necessary foundations for the local ecosystem to become a regional carbon market hub.
The ministry is also coordinating with the European Union to implement various activities under the TAIEX mechanism to provide technical support for the Carbon Border Adjustment Mechanism (CBAM) for relevant entities, including the Ministry of Industry and its affiliated entities.
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