Saudi Arabia’s planned compliance carbon market could generate national demand for around 30 million carbon credits per year, according to senior staff at the kingdom’s state-backed voluntary carbon market company. The projection is the first concrete demand figure attached to a scheme Riyadh has signalled for launch around 2027, and it matters well beyond the Gulf: a compliance obligation of that size would instantly rank among the larger sources of credit demand outside the EU and China, and would pull supply, registry infrastructure and Article 6 authorisation decisions toward the region.
The Demand Signal Behind the Number
A 30-million-tonne annual requirement is not a rounding error. For scale, it is roughly twelve times the 2.5 million tonnes auctioned on the Saudi exchange platform at its COP29 launch in Baku in November 2024, when 23 companies cleared a core basket at 37.5 Saudi riyals per tonne, about 10 US dollars. Participants in that auction reportedly included Aramco Trading, Ma’aden and Gulf International Bank.
The figure also reframes what the kingdom’s existing infrastructure has been for. The Regional Voluntary Carbon Market Company (RVCMC), established in 2022 and owned 80 percent by the Public Investment Fund and 20 percent by Saudi Tadawul Group, has so far operated as a voluntary venue. Its first two auctions, in Riyadh in 2022 and Nairobi in 2023, sold more than 3.6 million tonnes combined, with Nairobi alone clearing 2.2 million tonnes, a record for a voluntary carbon auction at the time. A compliance market converts that voluntary flow into a regulated obligation for covered entities, which is precisely where durable demand comes from.
Two Pillars, One Missing Layer
Saudi Arabia’s carbon market architecture rests on two pillars. RVCMC is the trading venue: institutional-grade infrastructure with auction, request-for-quote and block-trade functions, settling against major global registries. The Greenhouse Gas Crediting and Offsetting Mechanism (GCOM), announced at MENA Climate Week in Riyadh in October 2023 and overseen by the kingdom’s Clean Development Mechanism Designated National Authority, is the domestic crediting framework under which Saudi-origin projects register and issue credits, with additionality testing and verification requirements designed to align with Article 6.
The missing layer is binding regulation. Analysts at Columbia University’s Center on Global Energy Policy note that rules governing market participation and credit use have not all been adopted yet. GCOM is operational as a registry, but the domestic pipeline remains thin: almost all credits sold through RVCMC to date originate from projects outside Saudi Arabia, certified under Verra, Gold Standard and Puro.earth across Asia, Latin America and Africa. A compliance market with 30 million tonnes of annual demand would change that calculus quickly, because covered entities will prefer credits that are eligible under the scheme’s own rules, and domestic GCOM supply would be the natural fit.
What It Means for Buyers, Developers and Investors
For buyers with Gulf exposure, the timeline is the operative fact. Government signals point to a phased pilot approach with launch around 2027, meaning companies that could fall under the cap have a narrow window to build emissions inventories, verification capacity and procurement policies before offsetting shifts from a reputational choice to a regulated cost. Regional context reinforces the direction: the UAE’s Federal Climate Law has mandated emissions reporting since May 2025, and CORSIA becomes mandatory for most states from 2027, adding aviation demand on top.
For project developers, the projection is an open invitation with a caveat. Saudi-origin supply that can register under GCOM, pass additionality testing and, where relevant, secure Article 6 authorisation from the designated authority will sit at the front of the queue. Developers already active in the kingdom, in mangroves, landfill gas, solar and industrial efficiency, now have a demand anchor to model against.
For investors, the question is price formation. A compliance obligation creates a floor under domestic demand, but the clearing price will depend on how much international supply the rules admit, and on whether authorised credits carry a premium, as they do in other Article 6-aligned markets.
What to Watch
Three markers from here. First, the publication of binding market rules: coverage thresholds, eligible credit types and the treatment of international versus GCOM-registered supply will determine whether 30 million tonnes is a floor or a ceiling. Second, the pace of GCOM project registrations over the next two quarters, the clearest leading indicator of domestic supply build-out. Third, RVCMC’s auction cadence and clearing prices through 2027: if voluntary volumes and prices firm ahead of the compliance launch, the market is telling you covered entities are already buying forward.
