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DFM’s carbon credits pilot platform debuts at COP28 as trading commences; listed entities take part

DFM’s carbon credits pilot platform debuts at COP28 as trading commences; listed entities take part
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Dubai – Mubasher: The carbon credits trading pilot programme by Dubai Financial Market (DFM) was launched on 5 December 2023, where institutional investors will be able to buy and sell until 11 December.

Making its debut at the 28th UN Climate Change Conference of the Parties (COP28), the platform will have the offsetting period ending on 10 January 2024, according to a press release.

More than 24 UAE entities will participate in the inaugural pilot, some of which are listed on the UAE stock markets like Dubai Electricity and Water Authority (DEWA), Emirates NBD, Shuaa Capital, Al Ansari Financial Services, Salik Company, National Central Cooling Company (Tabreed), and Emaar.

Among the remaining carbon credit suppliers and partners are DP World, Dubai Municipality, Dubai International Financial Centre (DIFC), Majid Al Futtaim, SEE Holding, FIVE Holdings, and Gulf Cryo.

Meanwhile, the pilot introduces trading for two UAE carbon credit projects by DEWA in addition to five international developments.

Al Ramz Capital, Arqaam Securities, BHM Capital, EFG Hermes, Emirates NBD Securities, and FAB Securities will be the six DFM brokers to carry out related transactions. Meanwhile, DFM has worked closely with Dubai Future Foundation as a partner for the pilot.

The processes of clearing and settlement will be handled in USD by Dubai Clear and the Dubai Central Securities Depository (Dubai CSD), as pricing agencies including Dow Jones Company’s OPIS will provide the global daily price reference.

Furthermore, all carbon credits traded on DFM will be supplied by DEWA, First Abu Dhabi Bank (FAB), and MyCarbon.

It is worth highlighting that by 2030, the market for carbon credits would exceed $50 billion according to estimates.

On 23 November 2023, DFM unveiled the pilot programme for trading carbon credits, in a bid to position the securities market at the forefront of climate action as a regulated platform where project capital raising, carbon credit trading, and safekeeping are explored in support of the UAE’s net zero upon 2050 objectives.