- The "Sharm El-Sheikh Guidebook for Just Financing" recommended the establishment of carbon markets as an innovative means for climate financing.

- The World Bank provided technical support to the relevant authorities to assist in the launch of Egypt’s first voluntary carbon credit trading market.

- Trading carbon credits could reduce the cost of implementing Nationally Determined Contributions (NDCs) worldwide by $250 billion by 2030.

- Implementation of the Joint Capital Market Program (J-CAP) with the World Bank and relevant entities aims to support the local capital market in becoming a regional hub for carbon markets.

- Collaboration with the European Union through the TAIEX mechanism to provide technical support for carbon border adjustment mechanisms.

- Enhancing cooperation with the Transformative Carbon Asset Facility (TCAF) of the World Bank to reduce carbon emissions through the "NWFE" program.

- Launching Egypt’s first voluntary carbon market opens avenues for South-South cooperation with Africa.

- Continuing to implement the Development Policy Financing Program with the World Bank and other partners to support structural reforms that advance green transformation.

H.E. Dr. Rania A. Al-Mashat, Minister of Planning, Economic Development, and International Cooperation, affirmed that the launch of Egypt’s first organized voluntary market for the registration, issuance, and trading of carbon credits is a significant step towards achieving economic and environmental sustainability in Egypt. It reflects the country’s commitment to adopting innovative policies to mitigate climate change.

This comment was made during H.E.’s participation in the conference announcing the completion of all regulatory frameworks for carbon reduction projects. The event took place at the headquarters of the Financial Regulatory Authority in the Smart Village, and was attended by Dr. Mohamed Farid, Chairman of the Authority; Dr. Yasmine Fouad, Minister of Environment; Engineer Hassan Khatib, Minister of Investment and Foreign Trade; Mr. Alaa Farouk, Minister of Agriculture; and Mr. Mahmoud Fawzy, Minister of Parliamentary and Legal Affairs, as well as other officials from the private sector and business community.

Structural Reforms in Collaboration with the World Bank

H.E. Dr. Al-Mashat explained that the launch of Egypt’s first voluntary carbon trading market is a result of cooperation among various stakeholders, including development partners. The Development Policy Financing Program, implemented by the ministry with the World Bank, supported the establishment of this market by enhancing structural reforms and providing technical support to the Financial Regulatory Authority. This support included issuing three decisions concerning local carbon markets: (1) registration requirements for accreditation and verification bodies, (2) authorization requirements for carbon credit registrations, and (3) authorization requirements for commercial carbon credit registrations. The ministry will continue to implement the Development Policy Financing Program with the World Bank and other partners to support structural reforms promoting green transformation.

H.E. Minister Al-Mashat noted that this development represents a step towards regional leadership in the green economy. Carbon markets are effective tools that encourage companies to reduce harmful emissions by providing tradable carbon credits for investors and businesses struggling to cut their emissions. This mechanism is not only a tool for emission reduction but also an effective means of securing necessary financing for green transformation.

Innovative Financing Models

H.E. Dr. Al-Mashat highlighted that carbon markets are an important global mechanism for reducing harmful emissions and represent an innovative financing model recommended by the "Sharm El-Sheikh Guidebook for Just Financing," launched by Egypt during the COP27 Climate Conference. This model is mentioned in the fourth section on blended finance due to its role in providing financial returns that enhance climate action.

H.E. Minister Al-Mashat emphasized that this initiative aligns with Egypt’s Vision 2030 and the National Climate Change Strategy 2050, and contributes to Nationally Determined Contributions. It aims to balance economic and environmental development by mitigating the adverse effects of climate change while maintaining economic growth. It also reflects Egypt’s leading role in supporting Africa's Agenda 2063 to create sustainable and resilient regional economies and societies.

H.E. Dr. Al-Mashat noted that energy projects under the "NWFE" program are among the country’s efforts to achieve the National Climate Change Strategy’s goals by reducing approximately 17 million tons of CO2 emissions annually. In this regard, the ministry collaborates with various entities, including the Transformative Carbon Asset Facility (TCAF) of the World Bank, which aims to reduce carbon emissions.

International Financing Institutions’ Recommendations

H.E. Dr. Al-Mashat mentioned that the establishment of the carbon credit trading market is among the key recommendations of development partners. The Country Climate and Development Report (CCDR) issued by the World Bank Group in November 2022 highlighted the need for a carbon credit market as part of Egypt’s low-carbon future strategy. Additionally, the OECD report on "Green Growth Policies in Egypt," under the country program with the government, recommended establishing a carbon trading market on the Egyptian stock exchange as a positive step towards involving the private sector in climate action and encouraging Egyptian companies to invest in mitigation projects.

Joint Capital Market Program (J-CAP)

H.E. Minister Al-Mashat stated that to build on this progress, the Ministry of Planning, Economic Development, and International Cooperation is continuing its collaboration with the World Bank on the Joint Capital Market Program (J-CAP). This program supports the Financial Regulatory Authority, the Ministry of Environment, and several national entities in strengthening infrastructure to attract private capital to Egypt and enhance liquidity in financial markets. This includes developing the necessary foundations for the local ecosystem to become a regional carbon market hub.

The ministry is also coordinating with the European Union to implement various activities under the TAIEX mechanism to provide technical support for the Carbon Border Adjustment Mechanism (CBAM) for relevant entities, including the Ministry of Industry and its affiliated entities.

H.E. Minister Al-Mashat noted that trading carbon credits could reduce the cost of implementing NDCs by more than half, potentially saving up to $250 billion globally by 2030. In this context, launching the carbon market in Egypt will enhance the contribution of the green economy to GDP, including increasing green investments and achieving target ratios in various aspects of the green economy.

H.E. Dr. Al-Mashat reaffirmed the Ministry of Planning, Economic Development, and International Cooperation's commitment to maximizing the benefits of multilateral cooperation, supporting the country’s investment plans for inclusive and sustainable growth, and opening opportunities for South-South cooperation with Africa through the launch of Egypt’s first voluntary carbon market.