الهيئة العامة للرقابة المالية

• The seminar was well attended by stakeholders, experts and economists who actively discussed the establishment, development and efficiency of the Voluntary Carbon Market.

Dr. Mohammed Farid – FRA Chairman:

• FRA is committed to foster a stable and fair non-bank financial market environment that protects the rights of all market participants
• FRA has established a robust framework, and technical methodologies aligned with international standards for measuring carbon emissions.
• FRA conducted thorough research on global benchmarks and experiences to ensure the efficiency and effectiveness of Egypt’s voluntary carbon market.
• The Voluntary Carbon Market is a pioneering initiative that complements Egypt’s efforts to reduce carbon emissions and achieve carbon neutrality.
• FRA is continuously reviewing the policies and procedures to enhance their effectiveness in promoting carbon reduction practices.
• The regulatory and legal framework for Egypt’s Voluntary Carbon Market is now complete, and entities are invited to register their projects and begin their carbon reduction journey.
• Accurate carbon footprint measurement and the identification of reduction opportunities begin with the development of a comprehensive project document
• Robust governance of the technology used to build and manage carbon registries is paramount for ensuring the efficiency and effectiveness of the market

Dr. Mohamed Farid, FRA Chairman presented a comprehensive overview of Egypt’s pioneering experience in establishing the first regulated Voluntary Carbon Market in Africa during a seminar hosted by the Institute of National Planning (INP). The seminar, attended by Dr. Ashraf Al-Arabi, President of INP as well as other leading figures from both FRA and INP. Dr. Alaa Zahran, former President of the Institute of National Planning (INP) moderated the seminar.

The seminar, titled “Challenges of Establishing a Carbon Market in Egypt within a Comparative International Framework: Opportunities and Challenges” was well attended by representatives from government and private sector entities, as well as experts and economists. Discussions focused on the mechanisms for establishing carbon markets, exploring their development pathways and identifying strategies to enhance their efficiency.

Dr. Farid emphasized FRA’s ongoing commitment to enhance the overall stability of non-bank financial markets, ensuring market integrity and protecting investor rights. He highlighted that the Authority has established a robust framework, and technical methodologies aligned with international standards for measuring carbon emissions. The Authority has also thoroughly researched global benchmarks and experiences to ensure the efficiency and effectiveness of Egypt’s Voluntary Carbon Market.

Dr. Mohamed Farid, FRA Chairman announced the successful launch of Egypt’s first regulated Voluntary Carbon Market in Africa, a significant milestone in Egypt’s climate change mitigation efforts. The launch, attended by six ministers in August 2024, followed amendments to the Capital Market Law’s Executive Regulations, officially recognizing carbon credits as financial instruments. Subsequently, a supervisory committee was established to oversee the registration and issuance of carbon credits. This led to the development of criteria for registering Validation/Verification Bodies (VVBs), resulting in the registration of three entities, including two local and one international entity.

Dr. Farid emphasized FRA’s commitment to activate the carbon credit market, which supports Egypt’s broader goal of achieving carbon neutrality. He highlighted the global consensus on the need to address the adverse impacts of climate change, such as wildfires and floods, which are exacerbated by rising global temperatures.

Dr. Farid emphasized that Egypt’s pioneering launch of the first regulated Voluntary Carbon Market in Africa aligns with the commitments made at COP 27. This initiative empowers project developers across sectors, including agriculture and industry, to generate carbon credits. These credits can then be traded on regulated platforms, attracting both domestic and international investors. This will stimulate investment in carbon reduction projects, foster sustainable economic growth, and position Egypt as a global leader in climate action.

FRA Chairman further noted that the foundational step for establishing Egypt and Africa’s first voluntary carbon market was the issuance of a Prime Ministerial decree amending certain provisions of the Executive Regulations of the Capital Market Law No. 95 of 1992. This decree recognized carbon credits as financial instruments and mandated the establishment of a trading platform on the Egyptian Exchange, as well as the formation of a supervisory committee. Subsequently, FRA formed the first committee to supervise carbon credit units, chaired by FRA Chairman and comprising representatives from the Authority, Ministry of Environment, Egyptian Exchange and carbon market experts.

To accelerate the activation of this new market, which is crucial for supporting Egypt’s carbon reduction goals, the Authority issued regulations governing the registration of Validation/Verification Bodies (VVBs). The committee overseeing carbon credit units subsequently began receiving applications from entities seeking VVB registration. After evaluating their capabilities and qualifications through interviews, the Committee approved three entities, including two local and one foreign entity.

Furthermore, the Authority issued regulations governing the listing and delisting of carbon credits on Egyptian Exchanges. These regulations also established standards for voluntary carbon registries, which function as centralized electronic systems for recording the issuance, registration, and transfer of ownership for carbon credits generated by projects adhering to methodologies established by recognized standards-setting bodies. Concurrently, through extensive consultations and coordination, the Authority approved trading rules on the Egyptian Exchange and specific settlement rules for voluntary carbon credits.

Dr. Farid emphasized the Authority’s commitment to continually review policies and procedures to ensure their effectiveness in promoting carbon reduction practices. He highlighted that the regulatory and legal framework for the regulated Voluntary Carbon Market is now fully established, inviting all companies and entities to register their carbon reduction projects through FRA’s online platform.

He further explained that developing a project document is the crucial first step in assessing the project’s carbon footprint and identifying opportunities for carbon emission reduction. He also emphasized the critical importance of robust governance for the technology used to build and manage carbon registries in order to enhance the market’s efficiency and effectiveness.