The provisions of this decree shall apply to the required standards for recognizing voluntary local carbon registries by the FRA, for the purpose of registering carbon emission reduction projects and issuing carbon credits that can be traded on the Egyptian Voluntary Carbon Market Exchange “Africarbonex”. International voluntary carbon registries, recognized by the International Carbon Reduction and Offset Alliance (ICROA), are automatically recognized by the FRA with no need to meet the requirements of this decree granted they complete standard KYC procedures.
The provisions stated herein shall apply to the rules for listing and delisting carbon credits issued in the voluntary markets of the Egyptian stock exchanges.
Decree No. 4664/2022 introduces key amendments to Egypt's capital market regulations, officially recognizing carbon credits as financial instruments in line with the EU model. It establishes a "Supervisory and Monitoring Committee on Carbon Credits," formed by the Financial Regulatory Authority (FRA) in collaboration with the Ministry of Environment. The decree also requires the FRA to maintain and regularly update a database of all carbon credit projects, ensuring transparency and coordination in Egypt's carbon trading system.
The Prime Minister's decree updates Egyptian accounting standards by substituting the standards for foreign exchange effects, separate financial statements, and real estate investments with revised versions and incorporating "Certificates of Carbon Emissions Reduction (Carbon Credits)" into the framework through Accounting Explanation No. 2. Issued under various legal and regulatory frameworks, the decree mandates its publication in the Official Gazette and enforcement the following day, marking a significant step in aligning accounting practices with evolving financial and environmental considerations.
The Prime Minister's Decree No. 4664/2022 amends the executive regulations of the Capital Market Law to establish a voluntary market on the Egyptian Stock Exchange for trading carbon credits, defined as tradable financial instruments representing greenhouse gas emissions reductions. These credits can only be issued to entities implementing approved greenhouse gas reduction projects. The decree mandates that all entities, including governmental, public, and private sectors, notify the Financial Regulatory Authority (FRA) and the Ministry of Environment about carbon credit projects and disclose any changes in their approvals. This amendment integrates carbon credits into Egypt’s financial framework, promoting environmental accountability and market transparency.
The FRA decree establishes a registry for approved Validation and Verification Bodies (VVBs) for carbon emission reduction projects, requiring them to be incorporated legal entities to conduct validation and verification for carbon credits in Egypt.
The Climate Projects Registry is a voluntary registry jointly established by Egyptian governmental entities to serve as an overarching database for emission reduction project within Egypt.
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