The Financial Regulatory Authority, the supervisor and regulator of the non-banking financial sector, which includes the capital
market, insurance activities, and non-banking financing activities, in cooperation with the Ministry of Environment, has completed all regulatory and procedural requirements for registering carbon emission reduction projects and launching the first regulated and monitored market by financial market regulators to register, issue, and trade voluntary carbon reduction certificates in Egypt and Africa. The new market enables implementers and financiers of reduction projects to issue carbon reduction certificates for projects registered with the Authority, and sell them in the trading systems prepared for this purpose by the Egyptian Stock Exchange, to attract local and international investors to trade on these certificates, which supports increased investment in these projects, achieves leadership for Egypt in this field, and enhances sustainable economic growth. Dr. Mohamed Farid, Chairman of the Financial Regulatory Authority, expressed the importance of completing all regulatory and procedural requirements for the first organized and monitored market for registering, issuing and trading carbon reduction certificates issued under carbon emission reduction projects registered with the Authority, in coordination with the Ministry of Environment and all relevant parties, stressing that what we are witnessing today confirms the ability of Egyptian institutions, through integration, coordination and concerted efforts, to achieve achievements and keep pace with global developments in various fields, especially in the field of climate action and the relentless global pursuit of achieving carbon neutrality.
Dr. Farid stressed that the new organized market will support the efforts of the Egyptian state in the negotiation process related to the requirements for reducing the carbon footprint of goods exported to markets, which may contribute to their implementation.
This comes as a continuation of the efforts of the Egyptian state in developing organized markets and what was announced at the COP 27 conference, regarding working to launch voluntary carbon markets.
The first building blocks of the new market began with the issuance of a decision by the Prime Minister No. 4664 of 2022 regarding amending some provisions of the executive regulations of the Capital Market Law No. 95 of 1992 regarding considering carbon emission reduction certificates as a financial instrument and the Stock Exchange establishing a trading platform and establishing a supervisory committee, all based on the proposal of the Authority’s Board of Directors. This was followed by the formation of the General Authority for Financial Supervision, the first committee to supervise and monitor carbon emission reduction units and their competencies, headed by the Chairman of the General Authority for Financial Supervision, and including in its membership representatives of the General Authority for Financial Supervision, representatives of the Ministry of Environment and the Stock Exchange, and members with experience in the field of carbon markets. To accelerate the pace of activating the new market, given its pivotal role in enhancing the Egyptian state’s efforts to reduce carbon emissions, the Financial Regulatory Authority continued to push forward efforts, as it issued a decision regulating the criteria for registering verification and certification bodies for reduction projects in the list prepared for this purpose by the Authority, so that the committee began receiving requests from entities wishing to register to work as verification and certification bodies. The committee conducted interviews with them to verify their capabilities and qualifications, which resulted in registering 3 entities to carry out verification and certification tasks, two local entities and one foreign entity. The Authority then issued rules for registering and deleting carbon emission reduction certificates on the Egyptian stock exchanges, as well as standards for approving local voluntary carbon records, which are considered central electronic storage systems that include records for issuing, registering and tracking the sequence of transfer of ownership of carbon emission reduction certificates resulting from the implementation of the reduction project according to the methodologies issued by the bodies that set the standards and methodologies, in parallel with the Authority’s approval of the rules for trading on the Egyptian Stock Exchange after conducting extensive consultations and coordination, and approving the settlement rules for voluntary carbon certificates on the Egyptian stock exchanges. The Financial Regulatory Authority calls on all companies and entities to register voluntary carbon reduction projects in the first organized and monitored market through the following links:
1-Link to the website of the Financial Regulatory Authority, which includes all the details.
2-Link to register voluntary reduction projects.
3-Link to receive requests from entities wishing to purchase carbon emission reduction certificates.
4-Link to the website of the carbon emission reduction certificates trading platform on the Egyptian Stock Exchange.
5-Link to the file explaining the accounting treatment of carbon emission reduction certificates.
6-Link to the register of verification and certification bodies for carbon emission reduction projects.
