The Middle East and North Africa (MENA) region is emerging as a dynamic force in global carbon markets. While still developing compared to established markets in Europe and Asia, MENA countries are rapidly building sophisticated carbon market infrastructure, driven by ambitious national visions, climate commitments, and economic diversification strategies.
With regional leaders like Saudi Arabia and the UAE pioneering innovative market mechanisms, the MENA region is positioned to become a significant hub for carbon trading and climate finance. This article explores the carbon market landscape across key MENA countries, highlighting achievements, opportunities, and the path forward.
For an introduction to carbon market fundamentals, see our companion article: Carbon Market Compliance 101: Understanding the Fundamentals.
MENA Carbon Market Overview
Compared to other global players, the MENA region represents an emerging but rapidly growing carbon market ecosystem. With leading countries like Saudi Arabia and the UAE spearheading development, the region is expected to witness significant expansion in both compliance and voluntary carbon markets over the coming decade.
Several factors are driving this growth:
- Ambitious national climate commitments (Saudi Arabia 2060, UAE 2050)
- Economic diversification strategies under Vision 2030 and similar programs
- Pioneering regulatory frameworks (UAE’s mandatory climate law, Saudi’s GCOM)
- Significant renewable energy investments across the region
- Growing corporate sustainability commitments from regional businesses
Saudi Arabia: Regional VCM Leader
Driven by Vision 2030 objectives and ambitious climate commitments, Saudi Arabia has emerged as a regional leader in developing carbon market infrastructure. The Kingdom’s proactive approach to carbon markets reflects its broader transformation strategy, positioning it at the forefront of climate action in the Middle East and North Africa region.
National Climate Framework and Targets
In 2021, the government of Saudi Arabia announced a landmark national net-zero greenhouse gas target for 2060 and adopted the Circular Carbon Economy (CCE) concept as the framework for pursuing its medium- and long-term climate mitigation ambitions.
The CCE framework emphasizes technology-neutral, holistic, context-specific, and cost-effective approaches to achieving emissions circularity. This strategic vision is supported by ambitious technology-specific targets:
- 50% power generation capacity shares for both renewables and natural gas by 2030
- 44 million tons of CO₂ carbon capture, utilization, and storage (CCUS) capacity by 2035
- 50 billion trees planted across the region through the Saudi Green Initiative
Corporate Climate Leadership
Saudi Arabia’s climate ambitions extend beyond government commitments to encompass the private sector. Major Saudi corporations, including Saudi Aramco and SABIC, have set net-zero greenhouse gas targets for operational emissions (Scopes 1 and 2) by 2050.
Many other companies are following suit, creating a growing demand for carbon management solutions and market mechanisms. These corporate commitments are spurring significant interest in the potential role of carbon markets to facilitate climate action implementation across the Kingdom’s business landscape.
Greenhouse Gas Crediting and Offsetting Mechanism (GCOM)
Launched in 2023, GCOM is a domestic, voluntary, project-based carbon crediting mechanism and registry. It enables both public and private entities, including subsidiaries of foreign companies, to develop and trade carbon credits across sectors. GCOM forms a key pillar of Saudi Arabia’s strategy to achieve net-zero emissions by 2060 and complements the goals of the Saudi Green Initiative.
The Regional Voluntary Carbon Market Company (RVCMC)
As the first mover in Saudi Arabia’s voluntary carbon market (VCM) space, the Public Investment Fund (PIF), together with the Saudi stock exchange Tadawul, launched the Voluntary Carbon Market Initiative in 2021. This initiative evolved into the Regional Voluntary Carbon Market Company (RVCMC) in 2022, with the stated purpose of providing guidance and support for carbon credit purchases to companies across the MENA region.
Market Activity and Auction Success:
The RVCMC has achieved notable success in catalyzing regional carbon market activity. Between 2022 and 2023, the company organized two record-breaking VCM auctions that collectively sold more than 3.6 million carbon credits to Saudi and international companies.
PIF-affiliated and other Saudi-headquartered firms constituted the majority of buyers, while renewable and clean energy-based credits registered by Verra comprised the majority of credits sold. Notably, all credits in these initial auctions were sourced from projects outside Saudi Arabia, highlighting the current reliance on international carbon credit supply.
Recent Developments: The Saudi Carbon Exchange
At the Baku Climate Change Conference (COP29) in November 2024, the RVCMC launched the Saudi-based VCM carbon exchange, marking a significant milestone in the Kingdom’s carbon market development.
The exchange initially enlisted 22 Saudi Arabian and international companies and made available carbon credits originating from 17 projects across countries worldwide. On the exchange’s opening day, the RVCMC held a third carbon credit auction that witnessed the sale of 2.5 million carbon credits.
The company has also announced plans to establish an investment fund dedicated to financing mitigation projects, further deepening the Kingdom’s carbon market infrastructure.
Future Outlook and Domestic Credit Potential:
According to a report by KAPSARC, demand for carbon credits is expected to increase significantly over the coming decades.
On the supply side, decisive action to bring new carbon credit projects online at scale can ensure that a share of mitigation benefits delivered through carbon crediting is kept within Saudi Arabia’s borders. Such developments would not only contribute to the government’s climate change targets but also reduce reliance on credits sourced from other countries, building domestic carbon market capacity and expertise.
The Kingdom’s carbon market journey demonstrates how strategic vision, institutional support, and private sector engagement can rapidly establish market infrastructure.
United Arab Emirates: World’s First Regulated Carbon Exchange
Alongside Saudi Arabia, the United Arab Emirates stands as another key player driving carbon market development in the MENA region, distinguished by its pioneering regulatory approach and ambitious climate commitments.
Pioneering Regulatory Framework
In 2022, Abu Dhabi Global Market (ADGM) made history by becoming the world’s first jurisdiction to regulate carbon credits as financial instruments and partnering with AirCarbon Exchange (ACX) to establish the world’s first fully regulated carbon trading exchange.
COP28 Climate Leadership
The UAE’s leadership was further demonstrated during COP28 in 2023, where it launched:
- $30 billion Alterra climate fund (targeting $250 billion by 2030)
- Global Climate Finance Centre with major institutions including the World Bank and BlackRock
- UAE Carbon Alliance’s $450 million commitment to African carbon credits
Mandatory Climate Compliance
In 2024, the UAE transformed its carbon landscape from voluntary to mandatory with Federal Decree-Law No. 11 of 2024, which came into force in May 2025, requiring all businesses to measure, report, and reduce their GHG emissions.
The National Register for Carbon Credits (NRCC) was established to create a comprehensive carbon accounting and trading framework, with:
- Financial penalties: AED 50,000 to AED 2,000,000 for non-compliance
- Tax incentives: Carbon credits included under 0% Free Zone corporate tax regime
Egypt: Africa’s Carbon Market Pioneer
The platform enables trading of carbon emission reduction certificates (CERs) and has attracted growing participation from the private sector. By early 2025, nearly 30 projects had joined the platform, offering over 170,000 carbon credits for trading.
Egypt is also developing its renewable energy carbon credit framework, with plans to begin issuing carbon credits to renewable energy projects by early 2026. As part of the Africa Carbon Markets Initiative (ACMI) launched during COP27, Egypt is positioning itself as a gateway for African carbon markets while aligning with its Vision 2030 and National Climate Change Strategy 2050.
Qatar: Regional Carbon Standards Hub
Qatar hosts the Global Carbon Council (GCC), established in 2019, which serves as a regional carbon crediting standard and the first carbon market initiative in the Global South endorsed by CORSIA.
As part of its commitment to reduce greenhouse gas emissions by 25% by 2030, Qatar is engaging strategically with Article 6 mechanisms under the Paris Agreement and exploring bilateral climate agreements to attract international investment.
Qatar’s National Dialogue on Climate Change 2025 emphasized accelerating carbon markets in the MENA region, with the country positioning itself as a hub for high-integrity carbon credits while implementing advanced Carbon Capture and Storage (CCS) technologies across its energy sector.
Jordan: Solar & Wind Carbon Credits
Jordan has actively participated in renewable energy development and carbon credit generation, positioning itself among the top Arab countries attracting renewable energy investment.
The country has generated carbon credits from its solar and wind energy projects and is participating in voluntary carbon markets. Jordan’s strategic location and available land make it well-suited for utility-scale renewable energy infrastructure, supporting both domestic decarbonization and carbon credit generation for international markets.
Oman: Article 6 Framework Leader
Oman launched a national Article 6 carbon market framework with emphasis on attracting international finance for technologically advanced, high-abatement-cost mitigation projects.
The country has established a positive list of pre-approved project activities and is focusing on:
- Renewable energy expansion: 20% by 2027, 35-39% by 2040
- Green hydrogen as a major decarbonization pathway
Oman’s strategic approach combines carbon market participation with ambitious renewable energy targets, positioning it for future carbon credit generation and international carbon finance.
Morocco: Renewable Energy Champion
Morocco has emerged as a renewable energy leader in the MENA region with a 52% renewable energy target by 2050 and over $38 billion in renewable energy investments between 2003-2024.
In 2025, Morocco signed a memorandum of understanding to create a voluntary carbon market and launched the “Green Assets Cluster” in Casablanca, positioning the city as a future African hub for carbon trading.
Morocco is also advancing Article 6 implementation under the Paris Agreement, with ITMO (Internationally Transferred Mitigation Outcomes) offtake agreements expected with Switzerland’s Klick Foundation and Norway. The country’s leadership in clean energy exports ($360 million in 2024) and pioneering concentrated solar power technology strengthens its carbon market potential.
“The MENA region is rapidly transforming from carbon market observer to active participant, with pioneering regulatory frameworks, significant investments, and ambitious climate targets positioning it as a future hub for carbon trading and climate finance.”
Opportunities for Businesses in MENA Carbon Markets
The rapid development of carbon markets across the MENA region creates significant opportunities for businesses:
1. Carbon Credit Generation
- Renewable energy projects (solar, wind) can generate carbon credits
- Energy efficiency improvements monetized through credit sales
- CCUS projects eligible for credit issuance
2. Compliance Readiness
- Mandatory reporting requirements in UAE (2025) create service opportunities
- CBAM compliance for exporters to EU markets
- Early movers gain competitive advantage
3. Market Access
- RVCMC exchange provides regional trading platform
- Egypt’s EGX connects to African carbon markets
4. Investment Opportunities
- $30B+ climate funds (Alterra, RVCMC investment fund)
- Sustainable project financing through carbon revenue streams
Navigating Regional Challenges
While opportunities abound, businesses must also navigate several challenges:
- Regulatory complexity: Different frameworks across countries require tailored approaches
- Limited domestic supply: Current reliance on international credits creates supply challenges
- Capacity building: Need for carbon accounting and management expertise
- Market maturity: Emerging markets lack liquidity and price discovery[AH1]
- Reputational risk and greenwashing: Companies that pursue carbon credits without first establishing the foundational work, including a measured GHG footprint, emissions baseline, and a credible ESG strategy and reduction plan, face significant reputational exposure. Purchasing offsets as a shortcut, rather than as a complement to genuine emissions reduction efforts, invites scrutiny from regulators, investors, and the public. In an era of growing climate accountability, carbon market participation must be built on transparency and substance, not optics.
How Ecoryx Supports MENA Carbon Market Participation
At Ecoryx, we provide comprehensive support for organizations navigating MENA carbon markets:
Regional Expertise
- Deep knowledge of Saudi, UAE, and regional carbon frameworks
- Navigation of Vision 2030 and national climate strategies
- Connections with RVCMC, ADGM, and regional exchanges
Comprehensive Services
- Carbon footprint assessment tailored to regional operations
- Carbon credit project development from concept to verification
- CBAM compliance for MENA exporters to EU markets
- ESG reporting aligned with international and regional standards
- Strategy development for voluntary and compliance market participation
Contact Ecoryx today to position your organization for success in MENA carbon markets.
Ready to Seize MENA Carbon Market Opportunities?
The MENA region’s carbon markets are developing rapidly, creating opportunities for forward-thinking businesses. Whether you’re looking to generate carbon credits, ensure regulatory compliance, or position your organization for future market participation, Ecoryx provides the expertise and support you need.
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