Saudi Arabia: Plastic and wax specialists Saudi Top Plastics has signed an agreement with a Public Investment Fund-backed firm to purchase 1,000 carbon credits.

The memorandum of understanding, signed by the plastics trading name Saudi Top for Trading Co. with the Regional Voluntary Carbon Market Co. will remain in effect for three years, and will also see a focus on advancing global climate action.

A carbon, or offset, credit is a transferable financial instrument certified by governments or independent certification bodies to represent an emission reduction that can be bought or sold.

Under the terms of the agreement, both parties will cooperate on initiatives to expand the voluntary carbon market and advance climate action in the Middle East, North Africa, and globally, while compensating for emissions with the credits, contributing to Saudi Arabia’s climate goals.

“Under the terms of the MoU, STP has committed to purchasing 1,000 carbon credits from RVCMC. Carbon credits help finance important climate action projects that help to address the devastating effects of climate change,” a spokesperson for RVCMC commented.

He added: “The MoU aims to set a new standard for sustainability in the region, demonstrating that industry leaders can make substantial progress in their environmental commitments. The companies have prioritized high-quality carbon credits and will continue to work closely together on positive climate action.”

On the sustainability front, the spokesperson noted that STP focuses on creating innovative solutions that recycle plastic waste into raw materials for new industries. It currently produces over 50,000 tonnes of recycled products annually and exports to more than 30 countries worldwide.

“By partnering with the Regional Voluntary Carbon Market Co., STP aims to further enhance its sustainability initiatives,” he said.

Saudi Arabia’s sovereign wealth fund holds an 80 percent stake in RVCMC, with Tadawul Group owning the remaining 20 percent. The company aims to enable emissions offset via carbon credits and aspires to become a global leader in the sector.

In 2022 and 2023, RVCMC auctioned a total of 3.6 million tonnes of carbon credits. The first auction was the largest voluntary carbon bidding ever, selling 1.4 million tonnes of carbon offsets, which is roughly the amount produced by 250,000 family cars in a year.

The second auction, which was held in Nairobi, Kenya, sold over 2.2 million tonnes of high-quality carbon credits to 16 companies from Saudi Arabia and other countries.

In October last year, Riham ElGizy, CEO of RVCMC, said that carbon trading is crucial for mitigating the risks associated with climate change.