Egypt’s Financial Regulatory Authority (FRA), the regulator of the non-banking financial sector, including the capital market, insurance activities, and non-banking financing activities, announced the launch of the first regulated and supervised carbon credit market in Egypt and Africa.

According to a statement by the FRA, the new market enables implementers and financiers of emission reduction projects to issue carbon credits for projects registered with the authority and sell them on trading systems prepared for this purpose by the Egyptian Stock Exchange. This will attract local and international investors to trade these certificates, supporting increased investment in these projects, achieving leadership for Egypt in this field, and promoting sustainable economic growth.

Dr. Mohamed Farid, Chairman of the FRA, emphasized that the new regulated market will support Egypt’s efforts in negotiations related to reducing the carbon footprint of goods exported to markets, which may contribute to their access.

This comes as a continuation of Egypt’s efforts to develop regulated markets and what was announced at the COP27 conference to work on launching voluntary carbon markets.

The first building block of the new market began with the issuance of Prime Minister’s Decree No. 4664 of 2022, amending some provisions of the executive regulations of Capital Market Law No. 95 of 1992 regarding considering carbon emission reduction certificates as a financial instrument and the establishment of a trading platform and a supervisory committee by the Stock Exchange, all based on a proposal from the FRA’s Board of Directors.

This was followed by the FRA forming the first committee to supervise and monitor carbon emission reduction units. Headed by the Chairman of the FRA, the committee includes representatives from the FRA, the Ministry of Environment, the Stock Exchange, and members with expertise in carbon markets.