الهيئة العامة للرقابة المالية

• Four governors were present at the forum, where carbon credit revenues were distributed to farmers representing different governorates.

Dr. Mohamed Farid – FRA Chairman:

• Tackling climate change is essential for our existence and a higher quality of life, with the voluntary carbon market serving as a cornerstone for emissions reduction.
• A key priority is to enhance awareness and understanding of carbon market’s significance and its potential benefits for economic actors in the coming period.
• Establishing a robust and up-to-date database is essential for sound policymaking aimed at reducing carbon emissions and lessening the impacts of climate change.
• The Authority supports all efforts and organizations that aid in lowering carbon emissions, considering the agricultural sector to be of paramount importance.

Dr. Mohamed Farid, FRA Chairman delivered a prominent keynote address at the EoL and Carbon Credits Forum. This significant event took place at Heliopolis University for Sustainable Development through a collaborative effort with the Egyptian Biodynamic Association (EBDA).

The forum’s central objective was to showcase the effective role of carbon credits as a mechanism for fostering sustainable development in individuals’ lives. It also explored avenues for enhancing livelihoods by embracing the shift towards organic agriculture and actively participating in the voluntary carbon market. A key feature of the forum was the recognition and celebration of partners and “climate hero” farmers from across various governorates, marked by the distribution of carbon credits revenues issued for their respective initiatives.

The EoL and Carbon Credits Forum witnessed the distinguished presence of several key leaders, including Major General Dr. Abdel Fattah Serag, Governor of Sohag; Major General Dr. Alaa Abdel Moaty, Governor of Kafr El-Sheikh and Major General Dr. Hisham Abu Al-Nasr, Governor of Assiut. Joining them were Eng. Dr. Hazem El-Deeb, Deputy Governor of Beheira and Helmy Abouleish, Chairman of the Board of Trustees of Heliopolis University and Chairman of the Egyptian Biodynamic Association. Furthermore, a significant number of stakeholders and professionals actively involved in Egypt’s sustainable development initiatives also attended.

In his address, Dr. Farid underscored that addressing the dangers of climate change is a critical and fundamental endeavor for a better future, especially considering the growing and undeniable impacts of climate change globally. As a result, FRA has taken proactive steps by offering guidance and launching training programs for the financial institutions it oversees. These initiatives are designed to strengthen their ability to effectively manage climate-related risks, which includes the work being done by the Regional Center for Sustainable Finance (RCSF). Moreover, FRA is actively collaborating with diverse stakeholders to foster a unified and integrated strategy for managing climate risks within the non-bank financial sector.

Turning to opportunities, FRA Chairman highlighted in his address that a well-organized and regulated voluntary carbon market is a key element in reducing carbon emissions. He further noted its potential to facilitate financing with low interest rates from international institutions for projects seeking to lower their carbon footprint.

Dr. Farid clarified that the carbon market provides financial institutions with opportunities to invest in carbon credits, green finance and environmentally friendly projects, which helps direct capital towards sustainable initiatives.

He also stated that the carbon market requires a sufficient supply of high-quality carbon credits, which necessitates a robust infrastructure and attracting new participants to the market in addition to data accuracy and disclosures.

He added that the upcoming phase will witness focused and intensified effort to raise awareness and understanding regarding the importance of the voluntary carbon market and the ways in which economic entities can capitalize on its advantages. He further clarified that the complete foundational principles and technical methodologies for the voluntary carbon market have been established, aligning with international best practices. Moreover, the Authority thoroughly reviewed global standards and experiences to gain valuable insights and guidance prior to establishing the market, ensuring its ultimate efficiency and effectiveness.

During his address, Dr. Farid highlighted Egypt’s pioneering role in establishing the first regulated voluntary carbon market in both Egypt and Africa, under the oversight of capital market regulators. He emphasized the crucial role of voluntary carbon markets in enabling the offsetting of greenhouse gas emissions through the purchase and retirement of carbon credits. Furthermore, he noted their effectiveness in creating financial incentives for companies to actively reduce their emissions, thereby driving overall emission reductions and channeling investments towards clean energy solutions and low-carbon technologies.

He further pointed out the significant economic advantages, stating that carbon credits trading has the potential to decrease the cost of implementing national contributions to combat climate change by over half, potentially saving up to $250 billion by 2030. Dr. Farid concluded by emphasizing that these markets are instrumental in mobilizing financial resources and lowering costs, thus empowering both nations and corporations to more readily transition towards a low-carbon economy.

The foundational groundwork for establishing Egypt and Africa’s pioneering voluntary carbon market involved a landmark decree issued by the Prime Minister. This decree amended specific articles within the Executive Regulations of the Capital Market Law No. 95 of 1992, officially recognizing carbon credits as financial instruments. Furthermore, it mandated the Egyptian Exchange (EGX) to serve as the trading platform and established a dedicated supervisory committee, all stemming from a proposal put forth by FRA’s Board of Directors. Subsequently, FRA took the initiative to form Carbon Credit Regulatory Committee (CCRC) chaired by FRA Chairman and comprises representatives from FRA, the Ministry of Environment, EGX and experts in carbon markets.

FRA Chairman underscored the Authority’s recent registration approval for several projects within its database, noting that the subsequent step involves making their carbon credits available for trading on the voluntary carbon market.

Subsequently, the Authority established comprehensive regulations governing listing and delisting of carbon credits on the Egyptian Exchanges. These regulations were accompanied by clearly defined accreditation criteria for local voluntary carbon registries, which serve as central electronic custody systems. These registries record the issuance and registration of carbon credits, as well as their complete chain of ownership transfer, ensuring adherence to methodologies established by recognized standard-setting organizations. This robust regulatory framework was developed in parallel with the Authority’s approval of the trading rules, a process marked by extensive consultations and close coordination. Additionally, the settlement procedures for carbon credits traded on the Egyptian Exchanges were also formally approved.

Dr. Farid affirmed FRA’s active and expedited efforts in launching this new market, emphasizing its crucial role in achieving Egypt’s carbon reduction goals.

In this context, the Authority issued a regulation outlining the criteria for the registration of validation and verification bodies on its designated list. Consequently, the Committee initiated the application intake process for entities seeking registration to function as accredited validation and verification bodies. Subsequently, the Committee conducted thorough interviews with these entities to assess their capabilities and qualifications, ultimately leading to the registration of three bodies authorized to perform validation and verification tasks, comprising two domestic and one international entity.

Separately, Dr. Farid underscored the critical importance of establishing an up-to-date database, especially focusing on the agricultural sector. He elucidated that this serves as a fundamental cornerstone for informed decision-making, which will underpin effective carbon emission reduction policies aimed at mitigating the risks of climate change. Furthermore, he emphasized the increasing necessity of prioritizing climate and nature-related risks in considerations to proactively hedge against their potential future impact.

Helmy Abouleish, Chairman of the Board of Trustees of Heliopolis University, underscored the profound significance of the event which served to celebrate the “climate hero” farmers whose certifications demonstrably prove their direct contribution to realizing the objectives of the 2016 Paris Agreement on Climate Change.

In his address, he highlighted that the farmers’ transition to biodynamic agriculture plays a crucial role in reducing carbon emissions, preserving healthy soil and sequestering carbon within it and contributes to safeguarding public health through the production of healthy, vital agricultural products.

Concluding his remarks, Abouleish emphasized the critical need for collaboration among all stakeholders, encompassing governmental bodies and private sector companies, to collectively achieve the goals of the Paris Agreement and ultimately reach net-zero emissions.