Saudi Arabia's Regional Voluntary Carbon Market: How Corporates Can Use RVCM Credits Credibly

A Carbon Credit Is Now a Disclosed Line Item, Not a Press Release

A Saudi company can now buy carbon credits through a Riyadh-backed exchange in a few clicks. The harder question is what happens to that credit the moment the company has to report it. The same year the Gulf’s carbon market infrastructure matured, two rulebooks made a credit’s quality and role a disclosed, audited fact.

Spectreco, a US-headquartered sustainability technology and advisory firm with offices in Dubai, Muscat and Lahore, sees the same mistake across the region: treating a carbon credit as a reputational accessory rather than a reported number. Under IFRS S2 and the Science Based Targets initiative (SBTi) Corporate Net-Zero Standard, a credit only works if it sits on top of a real reduction plan, not in place of one.

Sources: RVCMC / VCM.sa  |  SBTi: Corporate Net-Zero Standard V2.0

In this article

• What Saudi Arabia’s Regional Voluntary Carbon Market is and who runs it

• The mitigation hierarchy: why credits come after cuts

• What makes a carbon credit high-integrity

• How credits are disclosed under IFRS S2

• How the SBTi V2.0 standard treats credits

• The greenwashing risks and how to avoid them

• FAQ

What Is Saudi Arabia's Regional Voluntary Carbon Market?

Saudi Arabia’s Regional Voluntary Carbon Market is run by the Regional Voluntary Carbon Market Company (RVCMC), a joint venture that auctions and trades voluntary carbon credits and positions Riyadh as a regional carbon-trading hub. It channels capital to climate projects and gives Gulf corporates a regulated route to buy offsets.

Who runs RVCMC?

RVCMC is owned by the Public Investment Fund (PIF), which holds an 80% stake, and Saudi Tadawul Group, the holding company of the Saudi Exchange, which holds the remaining 20%. PIF announced the company’s establishment in Riyadh on 24 October 2022. Its stated purpose is to help regional firms contribute to the move to net zero and to ensure that credit purchases lead to real emission reductions.

Source: PIF: Regional Voluntary Carbon Market Company

What the auctions and exchange have done so far

RVCMC ran a series of pilot auctions before building standing market infrastructure. The headline event came on 14 June 2023 in Nairobi, where it sold over 2.2 million tonnes of carbon credits to 16 Saudi and international buyers, including Aramco and the Saudi Electricity Company, in what it called the largest voluntary carbon credit auction to date. The credits were CORSIA-eligible and Verra-registered, drawn from 18 projects that mixed emission avoidance and removal.

On 13 November 2024, at COP29 in Baku, RVCMC launched a standing voluntary carbon market exchange built with market-infrastructure provider Xpansiv. The platform offers auction, request-for-quote and block-trade functions, links to major global registries, supports credits compatible with Islamic finance, and set out a spot market to follow. For context on how another market is building its carbon-trading rulebook, see our analysis of Pakistan’s carbon market and Article 6 strategy.

Sources: PRNewswire: RVCMC Nairobi auction  |  SPA: RVCMC exchange platform

Credits Come After Cuts: The Mitigation Hierarchy

An easy market makes it tempting to buy first and cut later. Every serious net-zero framework reverses that order. The sequence a company should follow is fixed:

• Measure the footprint across Scope 1 (direct emissions), Scope 2 (purchased energy) and Scope 3 (value-chain emissions).
• Cut emissions inside operations and the value chain as far as the business can.
• Buy high-integrity credits only for the genuine residual emissions that cannot yet be eliminated.

SBTi’s Corporate Net-Zero Standard builds this into its implementation hierarchy: direct actions in a company’s own operations and value chain come first, and market instruments are reported separately from the physical-inventory target. A credit is a complement to cutting emissions, never a substitute for it.

Source: SBTi Corporate Net-Zero Standard V2.0 (PDF)

What Makes a Carbon Credit High-Integrity?

Not every credit represents a real tonne of avoided or removed carbon. The Integrity Council for the Voluntary Carbon Market (ICVCM), an independent governance body for the voluntary market, sets the global quality benchmark through its ten Core Carbon Principles. A credit carrying the CCP label has met those criteria under the CCP Assessment Framework. The principles that decide whether a credit holds up are:

• Additionality: the reduction would not have happened without the credit revenue.
• Permanence: the reduction lasts, or reversal risks are managed and compensated.
• Robust quantification: the reduction is measured conservatively and scientifically.
• No double counting: the reduction is claimed only once.
• Independent third-party validation and verification.

RVCMC’s Nairobi credits were CORSIA-eligible and Verra-registered, which signals a recognised standard behind them. Buyers still have to check the specific project, vintage and claim, because the label on the exchange is the starting point for due diligence, not the end of it.

Source: ICVCM: The Core Carbon Principles

How Do Carbon Credits Interact With IFRS S2 Disclosure?

If a company’s climate target relies on carbon credits, IFRS S2 (the ISSB’s Climate-related Disclosures standard) requires it to say so in detail. Under paragraph 36, a company with a net greenhouse gas emissions target must disclose the gross target separately and explain exactly how credits fit the plan. The required disclosures include:

• The extent to which the target relies on carbon credits.
• The carbon crediting scheme the credits come from.
• Whether the offset is nature-based or based on technological removals.
• Any other factors needed to understand the credits’ credibility and integrity, such as assumptions about permanence.

This matters acutely for Tadawul-listed companies, which are already moving toward IFRS S1 and S2 disclosure. A credit bought quietly becomes a public, itemised claim the moment the sustainability report is filed. We cover the Saudi disclosure landscape in what Tadawul companies must do on ISSB reporting.

Source: IFRS S2 GHG educational material (PDF)

How the SBTi V2.0 Standard Treats Credits

The SBTi published the final Corporate Net-Zero Standard Version 2.0 on 11 June 2026, after two consultation drafts in March and November 2025. Companies can begin submitting targets for validation under Version 2.0 in the first quarter of 2027, while the previous version stays open for submissions until the end of 2027.

The standard is strict on where credits sit. They are a complement, not a substitute, for a company cutting its own emissions. Targets are set from the physical emissions inventory, and credits do not count toward the near-term and long-term reductions a company must deliver inside its value chain. Long-term targets require a linear contraction to roughly 10% residual emissions or less by 2050, and credits enter only to neutralise those genuine residuals at the net-zero year. Version 2.0 also introduces a voluntary Ongoing Emissions Responsibility programme, which recognises high-integrity action on remaining emissions and is intended to become mandatory from 2035. For the detail, read our guide to the SBTi V2.0 standard from target-setting to delivery.

Sources: SBTi: V2.0 release  |  SBTi: Developing the standard

The Greenwashing Risk: Where Credits Go Wrong

An accessible exchange does not lower the integrity bar. The failure modes are well known, and each one turns a credit into a liability:

• Using credits in place of reductions, so the company buys its way to a headline number while its own emissions hold steady.
• Buying low-integrity or avoidance credits where a removal is needed, which fails the quality test the disclosure standards expect.
• Leaving out the scheme, project type and vintage, which is exactly the information IFRS S2 now requires.
• Double counting, where the same tonne is claimed by the buyer and by the host country’s national inventory.

The defence is disclosure discipline. A credit that is high-integrity, matched to a real residual emission, and reported with its scheme and type is a credible climate action. The same credit bought to avoid the harder work of cutting emissions is a greenwashing claim waiting to be found.

How to Use RVCM Credits Credibly in a Net-Zero Plan

The credible path through the Gulf’s voluntary market is a sequence, not a purchase:

1. Build the emissions baseline first. Measure Scope 1, 2 and 3 to a standard that can survive assurance, so you know the size of the residual before buying anything. A cloud-native ESG platform keeps one dataset feeding both the target and the disclosure.
2. Set reduction targets and deliver them. Commit to near-term and long-term cuts inside your own operations and value chain, and treat credits as outside that target.
3. Buy only high-integrity credits. Screen for the Core Carbon Principles and recognised registries, and match removals to residuals that genuinely cannot yet be cut.
4. Disclose the credits fully. Report the scheme, the project type, the vintage and the share of the target they cover, in line with IFRS S2 paragraph 36.
5. Keep capacity in place. Where internal teams are thin, a Virtual Sustainability Office can run the reduction and disclosure cycle alongside your own team.

Frequently Asked Questions (FAQs)

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The Bottom Line

Saudi Arabia’s Regional Voluntary Carbon Market has made high-integrity credits easier to buy in the Gulf than ever. That convenience changes nothing about the discipline. Cut emissions first, buy credits only for genuine residuals, screen them for integrity, and disclose the scheme and type under IFRS S2. The companies that treat credits as the top of a real reduction plan, rather than a shortcut around one, are the ones whose climate claims will survive scrutiny.

Spectreco helps Gulf corporates build net-zero plans and disclose carbon credits credibly. Book a net-zero and offset-disclosure readiness session with our Decarbonization and Net-Zero Strategy team before your next reporting cycle.

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