The FSA issues standards for the registration of local and foreign verification and certification bodies to issue voluntary carbon certificates

The Board of Directors of the Financial Regulatory Authority, chaired by Dr. Mohamed Farid, issued Decision No. 163 of 2023 regarding criteria for registering verification and certification bodies for projects to reduce carbon emissions, and no one other than those bodies may carry out any verification or approval work for carbon emissions reduction projects for the purposes of listing and trading on the Egyptian stock exchanges for carbon certificates Voluntary, provided that the list includes the main data of the registered entities and the sector in which the verification and certification process takes place, for the first time in Egypt in consistency and keeping pace with international developments and best practices in this regard.
According to the decision, a new list will be created in the FRA to register local and foreign verification and certification bodies, according to standards and controls issued by the authority, in order to provide an effective mechanism for measuring, recording and documenting environmental projects that work to reduce carbon emissions, by providing information related to each project, including: Objective of the Project, Technologies Used and Low Estimated Emissions Accredited Verification and Certification Bodies will evaluate the projects and validate the information provided, enabling investors, institutions and the general public to view the registered projects and ensure that they achieve their set objectives.
The standards were prepared under a proposal from the Supervisory and Control Committee of Carbon Emissions Reduction Units, which includes in its membership representatives of the Ministry of Environment, the Egyptian Stock Exchange and specialized experts. The decision also specified the sectors in which the verification and certification process takes place. This step by the authority comes within the framework of completing efforts to activate the market Trading voluntary carbon emission reduction certificates, and supporting the Egyptian state’s efforts to achieve carbon neutrality, in support of Egypt’s Vision 2030 to achieve sustainable development.
According to the decision, the registration with the Authority is for a period of one year, renewable for other periods, provided that the criteria required for registration and its continuity are met.
• Standards for the registration of Egyptian verification and authentication bodies:

1- The entity requesting the registration must be a legal person.
2- Obtaining the ISO accreditation certificate related to the requirements for accreditation of verification and authentication institutions – ISO-14065:2020 or ISO/IEC 17029 or any update thereof.
3- Obtaining the ISO-14064:3 accreditation certificate for documenting the verification and certification of carbon reduction projects.
4- Fulfilling the requirements of professional competence and passing the exams as determined by the Authority in this regard by the managing director or his representative among other legal persons or the work team concerned with carrying out verification or certification work, as the case may be.
5- No criminal judgments for a felony or a misdemeanor for a crime involving honor or trust against any of the members of the board of directors of the legal person or the persons carrying out verification and certification in the entity in the three years preceding the entry in the register, unless they have been rehabilitated.

• Standards for registration of foreign verification and certification bodies:

1- That the entity be one of the internationally recognized Designated Operational Entities (DOE) in accordance with the standards issued by the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC), or one of the entities recognized within the Paris Agreement under Article VI. Or the entity is accredited to one or more of the international voluntary carbon registers, including but not limited to:
• Gold Standard Voluntary Carbon Score.
• The Verified Carbon Standard (VCS).
• The Global Carbon Council (GCC) voluntary carbon registry.
2- Submitting all supporting documents for expertise and previous work in the field of verification and approval work for a minimum of three projects registered in one of the above-mentioned international voluntary carbon records.
3- The work team concerned with carrying out verification or authentication work shall include at least one Egyptian expert who possesses the required competence and experience.
The decision obligated the foreign entities or projects that have certificates of reducing carbon emissions outside Egypt to notify the Authority of the verification and certification bodies regarding these certificates, in the event that these certificates are desired to be circulated inside Egypt. Internationally recognized operational entities Designated Operational Entities (DOE) according to the standards issued by the Secretariat of the United Nations Framework Convention on Climate Change United Nations Framework
The decision regulated the procedures and measures taken by the Board of Directors of the Authority in the event of a violation of any of the standards issued by the Authority, the loss of one of the registration criteria, or the continuation of registration, beginning with alerting the alleged violations and specifying the time period necessary to remove their causes or temporarily suspending registration in the list for a period not exceeding six months or Deletion of the entry from the list, and it is not permissible to re-register until after a period of not less than one year has passed.
For his part, Dr. Mohamed Farid, Chairman of the Financial Regulatory Authority, expressed his happiness at the completion of setting the rules for creating a new list in the authority for the first time to register the verification and approval authorities for environmental projects that work to reduce carbon emissions, according to standards and controls that take into account the best international practices in this regard, adding that This decision comes within the framework of activating the terms of reference of the Supervision and Control Committee on Carbon Emissions Reduction Units stipulated in Article Two of the Authority’s Board of Directors Decision No. (57) of 2023, which included preparing criteria for selecting verification and certification bodies.
Farid added that setting the rules for establishing the list and preparing the registration criteria supports the authority’s continuous endeavors to activate the voluntary carbon emission reduction certificates trading market, which was announced by the Financial Supervisory Authority and the Egyptian Stock Exchange during the activities of the 27th Climate Summit in Sharm El-Sheikh at the end of last year, in the presence of the Prime Minister. Dr. Mostafa Madbouly, in order to motivate the various production entities to reduce their emissions through adaptation and mitigation projects, and to offer certificates in the new market that enable them to recover part of their investment spending directed to reducing emissions resulting from the exercise of their activities, and to reinvest these resources in achieving the larger goal, which is carbon neutrality, which Every country in the world strives to achieve it.
He explained that the carbon emission reduction certificates trading market is a platform to help economic entities operating in various productive activities in Egypt and Africa to engage in carbon emission reduction activities to achieve carbon neutrality and benefit from issuing and selling certificates under the reduction for the benefit of other companies wishing to offset their carbon emissions that are difficult to reduce.
Dr. Farid considered that the establishment of a new list of verification and certification bodies for environmental projects that work to reduce carbon emissions is an important step that complements the Egyptian government’s efforts to reduce emissions to the extent that Egypt contributes to lowering the Earth’s temperature, thus limiting the occurrence of any natural disasters.

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