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Saudi Arabia has outlined aims to combat climate change and reduce carbon emissions with a long-term goal to diversify its economy and lessen its dependence on oil. The kingdom’s goal is to achieve net-zero emissions by 2060. 

Now, Saudi Arabia has announced that it will launch a greenhouse gas credits scheme early next year, allowing companies to offset their emissions by buying credits from projects that voluntarily cut or remove greenhouse gas emissions.

The kingdom’s Greenhouse Gas Crediting and Offsetting Mechanism (GCOM), launched at the United Nations’ MENA Climate Week in Riyadh, aims “to incentivize the deployment of emission reduction and removal activities at scale to support and enable climate-related national strategies, policies, and programs,” GCOM’s website said.

The project “reflects the kingdom’s efforts in addressing climate change,” the Saudi Press Agency noted, adding, “GCOM will be accessible to all entities within the kingdom, offering an incentive for developing activities in emissions reduction.”

Participation in the scheme, which aligns with the Paris Climate Agreement, is voluntary and project-based, covers greenhouse gas and non-greenhouse gas “metrics across all sectors,” and is open to the public and private sectors as well as subsidiaries of foreign firms.

In line with the UN Framework Convention for Climate Change, GCOM will further support achieving the Saudi Nationally Determined Contributions.

Last October, The Public Investment Fund (PIF), Saudi’s sovereign wealth fund, and Saudi Tadawul Group partnered to create the Regional Voluntary Carbon Market Company (RVCMC). In June, RVCMC auctioned 2.2 million tonnes of carbon credits in Nairobi, where Aramco, Saudi oil giant Saudi Electricity Company and Enowa were the main buyers.

Moreover, PIF raised $5.5 billion in February by selling a green bond to fund green investment. In July, RVCMC said there are plans to launch a carbon credit trading exchange by 2024 while establishing a fund to invest in climate projects.