The Egyptian Exchange Holding Company for Capital Markets Development, the Agricultural Bank of Egypt and Libra Capital Group signed Sunday a framework to establish a Carbon Certificates Trading Company.
The signing came without disclosing the financial and organizational details of the company which aims to cooperate with all government and private projects, according to a statement issued by the Egyptian Stock Exchange.
Carbon certificate trading is a mechanism that aims to reduce companies’ emissions by setting a price for the polluting activities resulting from them, and allowing companies to buy and sell carbon credits related to the volume of their emissions.
The mechanism allows the company to issue a specific amount of emissions, represented in the form of credits, each equal to one ton of carbon dioxide, and if it exceeds this emissions limit, it will be required to buy more credits. In return, the companies that reduce emissions sell their available emissions credits to achieve profit, which provides a financial incentive to reduce pollution.