Inside Saudi Arabia’s Carbon Market: A 2026 Offset Strategy for Gulf Corporates

Saudi Arabia now offers two routes to carbon credits. RVCMC is a PIF- and Tadawul-backed trading exchange, and GCOM is the domestic mechanism for Saudi-origin projects. Almost all credits sold through RVCMC so far originate outside the Kingdom, and whether a credit is authorised under Article 6 decides what a buyer can legally claim. For a Gulf corporation the priority is buying high-integrity credits, matching the claim to the credit type, and keeping audit-ready retirement evidence.

Key takeaways:

Saudi Arabia’s carbon market rests on two pillars: the RVCMC trading exchange, backed by the Public Investment Fund and Saudi Tadawul, and GCOM, the domestic crediting mechanism run under the Kingdom’s UN climate authority.
Almost all credits sold through RVCMC to date originate from projects outside Saudi Arabia. Domestic GCOM supply is still building.
Whether a credit is authorised under Article 6 changes what a buyer can legally claim. This is the single most misunderstood point in the market.
The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is the one setting where these credits move from optional towards compulsory, and it matters for the region’s airlines.
Value Added Tax (VAT) treatment of carbon credits in Saudi Arabia is unsettled. No formal ZATCA guidance exists, and most advisers expect the standard 15 per cent to apply.
Offsets are the last step, not the strategy. The credit only counts if it is high integrity, correctly classified, retired, and evidenced.

What is Saudi Arabia’s carbon market?

Saudi Arabia’s market is best understood as two separate things that are often blurred into one: a place to trade credits, and a place to create them. The Kingdom has built one of the most developed carbon-market infrastructures in the Gulf, which is opportunity and trap in equal measure. Easy access is exactly why so many buyers end up holding the wrong credit, bought for the wrong reason, that will not survive an auditor’s questions.

RVCMC: the exchange

The Regional Voluntary Carbon Market Company (RVCMC) was established in 2022 and is owned by the Public Investment Fund, holding 80 per cent, and the Saudi Tadawul Group, holding the remaining 20 per cent. Its stated ambition is to become one of the largest voluntary carbon markets in the world by 2030.

It has the track record to back the ambition. Its first two auctions, in Riyadh in 2022 and Nairobi in 2023, together sold more than 3.6 million tonnes of credits, with the 2023 Nairobi auction alone clearing 2.2 million tonnes and setting a record for the world’s largest voluntary carbon auction at the time. At COP29 in Baku in November 2024, RVCMC launched its full exchange platform and auctioned a further 2.5 million tonnes to 23 companies, with the core basket clearing at 37.5 Saudi riyals a tonne, roughly 10 US dollars. Reported participants included Aramco Trading, Ma’aden and Gulf International Bank.

The exchange runs on institutional-grade infrastructure with auction, request-for-quote and block-trade functions, and it settles against the major global registries. In practical terms it behaves like a commodities venue for carbon, not a charity drive.

GCOM: the domestic crediting mechanism

The Greenhouse Gas Crediting and Offsetting Mechanism (GCOM) is the other pillar. Announced at MENA Climate Week in Riyadh in October 2023 and overseen by the Kingdom’s Clean Development Mechanism Designated National Authority, GCOM is the framework under which projects inside Saudi Arabia register and issue credits. It applies additionality testing and verification requirements, and it is designed to align with Article 6 of the Paris Agreement.

The important caveat, flagged by analysts at Columbia University’s Center on Global Energy Policy, is that binding regulations governing market participation and credit use have not all been adopted yet. GCOM is real and operational as a registry, but the domestic pipeline of Saudi-origin credits is still maturing.

Where the credits actually come from

Here is the nuance most explainers skip, and it matters for strategy. A Gulf corporate buying on RVCMC today is, in almost every case, buying international credits, not Saudi ones.

RVCMC’s auctions have been stocked largely with internationally verified credits, certified under Verra, Gold Standard and Puro.earth, from projects spanning Asia, Latin America and Africa, from forest restoration to methane capture and carbon storage in construction materials. That is by design. RVCMC positions itself as a regional and global marketplace, channelling Gulf capital to climate projects across the Global South.

The consequence for a buyer is simple. Sourcing through a Saudi exchange does not make a credit Saudi, and it does not automatically make it high quality. The registry, methodology and vintage behind each credit still decide whether it is defensible. On why credit quality is a technical question and not a branding one, see our blog on regenerative agriculture credits in the GCC and what separates a real credit from a weak one.

Article 6, ITMOs and why “authorised” changes what you can claim

The short version: an authorised credit can count towards a country’s climate target, an unauthorised one cannot. This is the part that trips up finance and sustainability teams alike.

Under Article 6 of the Paris Agreement, a credit can be authorised by the host country’s national authority, which turns it into an Internationally Transferred Mitigation Outcome, or ITMO. When that happens, the host country applies a corresponding adjustment: it adds the tonne back to its own national inventory so the same reduction is not counted twice, once by the country and once by the buyer.

An unauthorised credit is different. It can still be bought and retired for voluntary climate action, but it is not an ITMO, it does not carry a corresponding adjustment, and it cannot be used toward another country’s national target.

Why should a Gulf buyer care? Because the type of claim a company can credibly make depends entirely on this distinction. A corporate buying to support a voluntary net-zero narrative may be comfortable with unauthorised credits. A buyer that needs a credit to count toward a national or sectoral obligation needs authorisation, and GCOM credits become ITMOs only with explicit authorisation from Saudi Arabia’s designated authority. Getting this wrong is how well-intentioned offset spend turns into a greenwashing headline. For the wider policy backdrop, including how Article 6 fits the region’s net-zero pathways, see our blog on what COP outcomes mean for UAE and Saudi net-zero plans.

CORSIA: the one place these credits are close to compulsory

The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), run by the UN’s aviation body ICAO, requires airlines to offset growth in international flight emissions using eligible credits. It runs in phases: participation is voluntary through the first phase to 2026 and becomes mandatory for most states from 2027, though once a state joins, compliance is compulsory for its carriers. RVCMC has stocked CORSIA-eligible credits in its auctions, which makes the Saudi exchange a natural sourcing venue for carriers such as Saudia, Emirates, Etihad, Qatar Airways and flydubai as their obligations scale. For an aviation buyer, CORSIA eligibility is the entire point, and a credit that lacks it is useless for the obligation even if it is otherwise sound.

The open question: how is VAT treated on carbon credits in Saudi Arabia?

Short answer: it is unsettled, and buyers should budget conservatively.

The Zakat, Tax and Customs Authority (ZATCA) has not issued formal guidance specific to carbon credits. Under the general framework, tax advisers expect a carbon credit to be treated as a supply of services rather than goods, because it is an intangible right, which would attract the standard 15 per cent VAT unless a zero-rating or out-of-scope treatment applies. Exports of services to non-residents may qualify for zero-rating, and the exemptions that apply to financial instruments are not expected to extend to carbon credits. Platform listing and commission fees are likely taxable in their own right.

The practical takeaway for a finance team is to price offsets on the assumption that VAT applies, confirm the classification of each transaction, and check whether input VAT is recoverable given how the credit is used. Treating the tax position as an afterthought is how an offset budget quietly overruns.

What changed in 2026, and the compliance market ahead

The direction of travel firmed up over the past year.

August 2026: Saudi state media described the Kingdom as having emerged as an influential player in global carbon markets through RVCMC, which now runs a regulated marketplace for public and private buyers.
Domestic pipeline: GCOM continues to build out project registration under the CDM Designated National Authority, though full binding market rules are still being finalised.
Compliance market by around 2027: the government has signalled its intention to launch a national compliance carbon market, with a phased pilot approach. When that arrives, offsetting shifts from a reputational choice to a regulated obligation for covered entities.

Set this against the wider regional picture. Saudi Arabia targets net zero by 2060, with a Saudi Green Initiative goal to cut 278 million tonnes a year by 2030. The UAE’s Federal Climate Law, Federal Decree-Law No. 11 of 2024, in force since 30 May 2025, mandates emissions reporting for entities operating in the country, with full compliance due by 30 May 2026. The demand side for credible offsets is being written into law across the Gulf, not left to voluntary goodwill.

How a Gulf corporate should build an offset strategy

A defensible 2026 offset strategy runs in this order.

Reduce first, offset last. Credits are for residual emissions after real reductions, and under most target frameworks offsets do not count toward the reduction target itself. See our blog on the Science Based Targets initiative (SBTi) Net-Zero Standard Version 2 and how it treats offsets versus reductions before committing a budget.
Buy integrity, not price. Prioritise credits verified under recognised registries and aligned to the Integrity Council for the Voluntary Carbon Market (ICVCM) Core Carbon Principles. Check additionality, permanence and the absence of leakage. A cheap credit that fails an integrity review is a liability, not a saving.
Match the claim to the classification. Decide whether the use case needs an authorised Article 6 credit or whether an unauthorised voluntary credit is appropriate, and document the reasoning.
Confirm eligibility for the obligation. For aviation, that means CORSIA eligibility. For compliance use later, it means alignment with the emerging Saudi rules.
Budget for VAT and evidence. Price in the likely 15 per cent, and keep retirement certificates with serial numbers so each tonne can be traced.
Retire and record. An offset only counts once it is retired and evidenced. Scattered PDFs and screenshots do not survive assurance.

Why this is a data problem before it is a trading problem

Every step above depends on the same thing: a clean, auditable link between a company’s actual emissions and the credits it retires against them. Buying is easy. Proving that the offset is genuine, correctly classified, retired against a real residual figure, and reportable, is where programmes fall over. The same discipline that makes an emissions number defensible makes an offset claim defensible, a theme we set out in The Trust Stack.

This is where Coral fits. Coral connects verified carbon offsets from registries including Verra, Gold Standard and ICR directly to an organisation’s measured Scope 1, 2 and 3 profile, recommends projects by emissions profile and SDG priority, and issues retirement certificates with serial numbers and optional blockchain-backed proof. Each tonne offset is linked back to the underlying emissions and flows straight into disclosure workflows for CSRD/ESRS, GRI and IFRS/ISSB, so an offset claim arrives audit-ready rather than assembled after the fact. Coral treats offsetting as the final step of a reduction-first programme, not a substitute for one.

For banks and investors, the same logic extends to the credits and clients in a portfolio. See our blog on financed emissions in the GCC and a practical PCAF playbook for how attribution and evidence discipline apply on the financing side.

Saudi Arabia has built the venue. The advantage now goes to the Gulf companies that can buy the right credit, for the right reason, and prove it.

Book a demo to see how Coral turns offset purchasing into an audit-ready part of your climate programme, or explore the Offset solution and the Emissions Management System.

Frequently asked questions

What is the difference between RVCMC and GCOM?

RVCMC is a trading exchange, backed by the Public Investment Fund and Saudi Tadawul, where companies buy and sell verified carbon credits. GCOM is the Kingdom’s domestic crediting mechanism, run under the CDM Designated National Authority, under which projects inside Saudi Arabia register and issue credits. One is where you trade, the other is where Saudi-origin credits are created.

Are credits bought on RVCMC actually from Saudi Arabia?

Mostly not, at least so far. RVCMC auctions have been dominated by internationally verified credits from projects across Asia, Latin America and Africa. Buying through a Saudi exchange does not make a credit Saudi-origin.

Do carbon credits count toward a company’s science-based target?

Generally no. Under most target frameworks, including the SBTi Net-Zero Standard, offsets address residual emissions and do not count toward the required reductions. They complement a reduction plan, they do not replace it.

Is there VAT on carbon credits in Saudi Arabia?

There is no formal ZATCA guidance specific to carbon credits. Most advisers expect them to be treated as a supply of services subject to the standard 15 per cent VAT, with possible zero-rating for exports of services. Buyers should budget for VAT and confirm the classification per transaction.

When will Saudi Arabia launch a compliance carbon market?

The government has signalled a phased approach with a national compliance market expected around 2027. Detailed rules have not been fully published, so covered entities should track developments and prepare their emissions data now.