A new coalition called UAE Carbon Alliance making up of UAE companies has been established to develop and grow a carbon market in the United Arab Emirates.
The newly established alliance, launched by the UAE Independent Climate Change Accelerators (UICCA), will help support the transition of companies to a green economy, as set out in the UAE Net Zero by 2050 Strategic Initiative.
Carbon market is a trading system in which carbon credits are bought and sold. Companies or individuals can use such markets to compensate for greenhouse gas emissions through buying carbon credits from groups that remove or reduce greenhouse gas emissions.
Last year, the Abu Dhabi Global Market, the UAE capital's financial free zone, announced plans to collaborate with AirCarbon Exchange (ACX) to create the “world’s first fully regulated” carbon trading exchange and clearing house in the Emirates.
Chaired by Sheikha Shamma bint Sultan, president and chief executive of UICCA, the UAE Carbon Alliance consists of companies from various sectors that realize the importance of carbon credits in achieving net-zero goals.
The founding members are ACX, First Abu Dhabi Bank, Mubadala Investment Company, Abu Dhabi National Energy Company and Abu Dhabi Future Energy Company, in addition to UICCA.
The alliance will look to establish national co-operation in decarbonization, develop standards and frameworks for constructive carbon financing, increase education and knowledge of carbon markets and support organizations on greenhouse gas emission reduction projects.
The establishment of a transparent carbon market will direct investment and capital towards projects that support decarbonization, while also providing corporations with a market-based mechanism to advance their transition journey and fulfill reduction targets.
"To reach net zero, we must actively reduce our emissions across all sectors, and it is imperative that public and private sectors take active steps to reduce emissions,”said Sheikha Shamma.
"The UAE Carbon Alliance will establish the UAE as a leading hub for high integrity, high quality carbon markets, to help fund the much-needed action to limit global warming to 1.5°C.”
The UAE Carbon Alliance will convene its first executive committee meeting with all its founding members this week.
The alliance will represent buyers and sellers of carbon credits, traders, climate project developers, financial institutions, corporations, exchanges and brokers from across the UAE and beyond.
UICCA will help guide the deployment of carbon credit solutions in the region by facilitating stakeholder collaboration across the public and private sector, as well as acting as the secretariat of the alliance.