The Egyptian Financial Regulatory Authority (FRA) is establishing the Supervisory and Control Committee on Carbon Emissions Reduction Units and their terms of reference.
Mohamed Farid, Chairperson of the Financial Regulatory Authority (FRA), issued two resolutions No. 57 and 58 of 2023 to set up the new committee.
According to the new decision, the committee is responsible for developing rules for issuing carbon emission reduction certificates while developing rules for regulating and overseeing carbon emission reduction certificates, including requirements for constant full and open disclosure for carbon emission reduction projects and programs.
In addition, it will help in developing standards for selecting verification and approval bodies for carbon emission reduction projects and developing special guiding rules with the standards of integrity and credibility of carbon emission reduction certificates.
Moreover, it shall be tasked with preparing rules for avoiding conflicts of interest for parties involved in the process of issuing carbon emission reduction certificates, preparing rules for defining records of carbon emission reduction certificates whose certificates are valid for trading, and coordinating with the concerned authorities to establish the Egyptian registry for carbon emission reduction certificates, with a description of the types of certificates, reducing carbon emissions.
However, the committee also undertakes other tasks related to its work.
Mohamed Farid further explained that the committee was established due to the mutual work, collaboration, and combining of efforts with the appropriate parties to speed up the rate of activating the carbon emission reduction certificates for the trading market.
He also noted that the carbon emission reduction certificates were announced by FRA the Egyptian Exchange during the activities of the 27th Climate Summit (COP27) in the city of Sharm El-Sheikh in 2022, with the ultimate objective of motivating corporations to engage more in reducing carbon emissions to comply with international requirements and standards in this regard.
Furthermore, He said that in the past period and light of the preparation of the legislative framework regulating the new market, amendments have been made to the capital market law to allow the carbon emission reduction certificate to be considered a negotiable financial instrument, and all the necessary legislative and procedural requirements in this regard are being met, as the new market supports the state’s efforts aiming to achieve carbon neutrality to reduce global warming and boost financing for climate action.
Furthermore, He indicated that over the past period and in the context of the drafting of the legislative structure regulating the market, amendments to the capital market law have been made to allow the carbon emission reduction certificate to be considered an adjustable financial instrument, and all essential legislative and procedural requirements in this regard are being met, as the new market encourages the efforts of the state to achieve zero greenhouse gases in an effort to reduce global warming and boost financing for climate action.
