UAE-based stock exchange Dubai Financial Market (DFM) has launched a pilot programme for trading carbon credits.
The initiative has been timed to coincide with the upcoming COP28 climate conference which is taking place in the UAE.
The pilot will start on December 4 with the offsetting period running until January 10, 2024. Under the terms of the pilot, one carbon credit will be equivalent to one ton of CO2 equivalent emissions. The carbon credits traded on DFM will be supplied by Dubai Electricity and Water Authority (Dewa) and UK-based sustainability consultant MyCarbon.
There are 17 UAE-based companies participating, including Dewa, DP World, Dubai Municipality, Dubai International Financial Centre, Emirates NBD, Majid Al Futtaim, SHUUA Capital and Al Ansari Financial Services.
Transactions will be executed by five DFM-based brokers – Al Ramz Capital, Arqaam Securities, BHM Capital, EFG Hermes and Emirates NBD Securities. Clearing and settlement processes will be handled in USD by Dubai Clear and the Dubai Central Securities Depository.
“This collaborative effort led by DFM not only brings together issuers and key market participants, but also offers a strategic exploration of the effectiveness of carbon credit trading and its catalytic contribution to the UAE prosperous green future,” said Saeed Mohammed Al Tayer, managing director & CEO of Dewa.
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