Cairo – August 11, 2024: Egypt is one step closer to launching its first regulated market for voluntary carbon reduction certificates in Africa, with the Financial Regulatory Authority (FRA) announcing the successful completion of regulatory requirements.
Mohamed Farid, Chairman of the FRA, emphasized that the new regulated market represents a milestone in Egypt’s environmental and financial sectors.
Farid underscored that the new market supports Egypt’s broader efforts to reduce the carbon footprint for exported goods, and highlights the FRA’s commitment to accelerating the activation of the carbon market and reinforcing the Egyptian state’s ongoing efforts to reduce carbon emissions.
In collaboration with the Ministry of Environment, the FRA has established the necessary framework, while the Egyptian Exchange (EGX) has developed a trading platform for these certificates, according to an official statement from the FRA.
The FRA statement did not disclose an official launch date.
This market will allow the issuance, registration, and trading of carbon reduction certificates, offering a structured platform for implementing and financing carbon reduction projects.
Through attracting both local and international investors, the initiative aims to enhance investment in sustainable projects and Egypt’s leadership in promoting sustainable economic growth.
Carbon certificates are tradable financial instruments using credits that represent a certain amount of carbon dioxide or other greenhouse gases (GHGs) - one credit represents one ton of CO2 or GHGs.
These certificates will enable companies in Africa to sell certified carbon credits to companies seeking to offset their emissions. Through Egypt’s carbon market, the certificates will be issued to the developer of the emissions reduction project, according to the FRA.
The new regulations follow amendments to the executive regulations of the Capital Market Law No. 95 of 1992, to recognize carbon emission reduction certificates as financial instruments.
To facilitate the market’s operation, the FRA also recently issued a decision outlining the criteria for registering verification and certification bodies for carbon reduction projects.
The authority set rules for registering and delisting carbon reduction certificates on the Egyptian Exchange, and established standards for local voluntary carbon registries.
In July, Farid announced new conditions for brokerage firms to trade in carbon reduction certificates, including requiring a minimum capital of LE 15 million and providing technological infrastructure.
According to EGX head Ahmed El Sheikh, the EGX is working with Go Green for Agricultural Investment and Development to issue carbon certificates in parallel with the company's efforts to list on the EGX. Speaking to Hapi Journal, El Sheikh added that the stock exchange is looking into approaching four listed entities to promote issuing carbon certificates.
The FRA invited all companies and entities to participate by registering their carbon reduction projects in the regulated market.
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