Saudi Arabia’s Enowa, VCM Ink Deal for 30 Million Tons of Carbon Credits

In a major push towards its net-zero ambitions, Saudi Arabia’s Voluntary Carbon Market (VCM) and Enowa, the energy and water subsidiary of NEOM,  have signed a long-term agreement to deliver over 30 million tons of carbon credits by the end of this decade.

The milestone deal is set to help Enowa offset emissions as it builds NEOM’s renewable energy infrastructure, reinforcing the Kingdom’s commitment to sustainable growth and a low-carbon future.

According to VCM, the credits will come from a portfolio of high-integrity climate action projects across the globe, primarily located in the Global South, and traded via VCM’s newly launched exchange platform. The first carbon credit delivery under this deal was made on December 19, 2024.

“The agreement marks a turning point in Saudi Arabia’s climate journey,” said Riham ElGizy, CEO of VCM. “Not only does it support Enowa’s sustainability goals, but it also guarantees long-term funding for carbon reduction projects around the world, a critical step in delivering global net-zero targets," he added.

ElGizy emphasised the importance of 'certainty' in carbon finance. “Projects that reduce or remove carbon need both funding and long-term visibility. This deal provides both, and showcases what our platform can unlock for the climate finance ecosystem.”

Enowa’s Executive Director of Energy, Jens Madrian, echoed the sentiment, stating, “Sustainability is at the heart of NEOM’s development. We are proud to be the first company in Saudi Arabia to commit to such a large-scale, multi-year carbon credit agreement. Our collaboration with VCM supports our broader mission of building sustainable infrastructure from the ground up.”

Launched in November 2024, the VCM exchange is the Kingdom’s first voluntary carbon credit trading platform. Designed with institutional-grade infrastructure, the platform provides transparency, liquidity, and seamless integration with global registries. It also supports emerging carbon trading mechanisms, including those tailored for Islamic Finance.

The exchange offers multiple transaction types including auctions, RFQ (request for quote), and block trades. A spot market and other advanced functionalities are slated for launch in 2025.

Analysts say the global voluntary carbon market could balloon from USD 2 billion in 2020 to nearly USD 250 billion by 2050. VCM, backed by the Public Investment Fund (80 percent stake) and Saudi Tadawul Group (20 percent), aims to position Saudi Arabia as a key player in this evolving space.

Enowa has already been an active participant in VCM’s earlier auctions, held in Saudi Arabia in 2022 and in Kenya in 2023. Its latest deal not only solidifies its leadership in the voluntary carbon space but also aligns with NEOM’s goal of becoming a model for climate-resilient urban development.

As Saudi Arabia scales up its green economy ambitions, this agreement signals a bold step in marrying climate action with economic transformation  and placing the Kingdom at the forefront of global carbon market innovation.