The Dubai Financial Market (DFM) is running a pilot program on carbon credits which will debut during the upcoming COP28 event in Dubai.
The program will allow companies to manage ‘unavoidable and residual carbon emissions’ while pursuing direct decarbonisation strategies. The carbon credits from local DEWA projects for admission will be supplied to the pilot.
One carbon credit can help offset 1 ton of CO2 equivalent emissions. The DFM pilot program for institutional investors will begin on December 4 and run through to December 8. Companies can buy and sell credits during this period and the ‘offsetting period’ ends on 10th January 2024.
“DEWA is leading in this aspect, and we’re delighted to play a pivotal role in DFM’s pioneering carbon pilot initiative, set to launch during COP28,” said Saeed Mohammed Al Tayer, MD & CEO of DEWA. Dubai has its Carbon Abatement Strategy 2030 to reduce carbon emissions by 30% by 2030.
“To achieve these goals, we have launched many initiatives and projects, most notably the Mohammed bin Rashid Al Maktoum Solar Park, which is the largest single-site solar energy project in the world based on the IPP model with a capacity of 5,000 megawatts by 2030,” said Al Tayer.
The inaugural pilot will see the active participation of more than 17 UAE companies, including Dubai Electricity and Water Authority (DEWA), DP World, Dubai Municipality, Dubai International Financial Centre (DIFC), Emirates NBD, Majid Al Futtaim, SHUUA Capital, Al Ansari Financial Services, Emaar, Salik, SEE Holding, FIVE Holdings, Gulf Cryo and Tabreed among others. DFM has worked closely with Dubai Future Foundation as a partner for the pilot. The transactions will be executed through 5 DFM brokers, namely Al Ramz Capital, Arqaam Securities, BHM Capital, EFG Hermes and Emirates NBD Securities. Clearing and settlement processes will be handled in USD by Dubai Clear and the Dubai Central Securities Depository (DCSD), with global daily price reference provided by leading pricing agencies such as OPIS, a Dow Jones company.
The carbon credits traded on DFM will be supplied from both DEWA and MyCarbon, coming from internationally certified carbon projects around the world that include carbon avoidance, reduction and removal initiatives.
DFM said that all projects have been verified by widely recognised standard setters such as VERRA or the UN’s Clean Development Mechanism (CDM).
