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FAB partners with Masdar and Blue Carbon to accelerate MENA carbon trading market

Standalone FAB Carbon Desk achieves regional firsts, executes multiple trades, engages with large-scale industry among other accomplishments

First Abu Dhabi Bank Headquarters

First Abu Dhabi Bank (FAB) is making rapid progress in its work to develop the MENA carbon trading market, signing MoU agreements with Blue Carbon and Masdar for the supply of high-quality carbon credits. These MoUs are another step towards FAB’s journey of becoming the UAE’s carbon trading hub.

FAB recently launched its dedicated carbon trading desk, part of its Global Markets offering, in line with the bank’s mission to expand its carbon capabilities. Introduced during the UAE Year of Sustainability to support national, regional and global net-zero carbon goals, the FAB Carbon Desk provides carbon trading and financing options, facilitates strategic carbon-related transactions, and promotes the development of high-quality carbon credits and offsets for corporate and investment banking clients.

FAB is the first regional bank to have trading capabilities in both compliance markets, including the EU Allowances (EUA) and UK Allowances (UKA), and voluntary carbon markets such as Gold Standard and Verra. It is also the first regional bank to offer EUA cash and carry notes and offer forward carbon credit purchase-structured solutions to local and international clients.

In its first few months, the FAB Carbon Desk executed multiple EUA trades. It was also first to execute a trade on the AirCarbon Exchange (ACX) in Abu Dhabi and is currently engaged in industry discussions with industry majors facing international emissions regulations.

FAB is already in discussion with large national and regional industrials about exposure to changes in the European Union’s Emissions Trading System, and in advanced talks with UAE entities to build a voluntary carbon ecosystem. It is also acting as forward buyer, hedge provider and originator of high-quality carbon credits for its clients. MoUs signed with Blue Carbon and Masdar are important milestones in these discussions, connecting UAE sustainability leaders directly into the emerging MENA carbon trading market.

Sheikh Ahmed Dalmook Al Maktoum, Chairman of Blue Carbon, said: “Climate finance has taken centre stage recently in the fight against climate change, and our partnership is a prime example of how it can be harnessed to create lasting positive impacts. We are dedicated to advancing not only carbon reduction but also economic empowerment and community livelihood support in the countries in which we are engaged.”

Mohamed Jameel Al Ramahi, Masdar’s Chief Executive Officer, said: “Masdar is proud to be partnering with First Abu Dhabi Bank to explore exciting ways to tap into carbon markets to accelerate the energy transition. Masdar has been active in carbon markets through our own investments and projects for the past 15 years, and we are fully supportive of tools that increase capital allocation to decarbonisation initiatives. Carbon credits provide industries with practical tools for reaching their ambitious decarbonisation targets. Ahead of the UAE hosting COP28, we will continue to work across all sectors to build a more sustainable future for all.”

The FAB Carbon Desk expands on FAB’s carbon trading capability first offered in 2021. Its remit includes providing tailored carbon solutions within the GCC region and throughout FAB’s global network, and actively sourcing, originating and trading high-quality carbon credits.

The desk puts FAB at the forefront of carbon trading in the UAE and regionally, with milestones that include opening its own carbon registries in the European and UK compliance markets and setting up with physical registries in the voluntary carbon markets. This operating model allows physical carbon allowances and credits trading on the bank’s book as well as providing market access for clients.

In launching the FAB Carbon Desk, FAB aims to drive the growth of the carbon markets ecosystem in Abu Dhabi, the UAE, and overall GCC region. It also aims at actively supporting the development of transparent carbon markets, ensuring credibility, trust, and confidence in carbon credits as a valuable tool in reducing global greenhouse gas emissions.

Today, FAB’s commodity trading franchise covers a wide range of products, including energy, base metals and precious metals, as well as carbon, and is globally competitive with established players in commodity markets. The FAB Carbon Desk is an expansion of the trading and risk management of commodity products since the bank launched its commodities desk in 2015.

FAB is also a founding member the UAE Carbon Alliance.