Decree No. 30/2024 establishes the criteria for the Financial Regulatory Authority (FRA) to recognize local voluntary carbon registries in Egypt. It applies to local voluntary carbon registries seeking recognition by the FRA to operate on the Egyptian Voluntary Carbon Market Exchange (“Africarbonex”). International registries recognized by the International Carbon Reduction and Offset Alliance (ICROA) are automatically recognized.
To be recognized by the FRA, registries must meet requirements in the following six key areas:
General Requirements
- Project Registration: Registries must follow specific procedures for registering carbon emission reduction projects.
- Ownership Tracking: They must enable tracking of carbon credit ownership and transfers, from issuance to retirement, to achieve carbon neutrality.
- Unique Identifiers: Each project and credit must have a unique identification number.
- Information Dissemination: Registries are responsible for disseminating information about carbon emission reduction projects, including project descriptions, reports (follow-up, validation, verification), and legal data.
- Double Registration Prohibition: Registries must have measures in place to prevent double registration of projects, ensuring a project registered in one registry cannot be registered in another.
- Agreements with Developers: A formal agreement between the registry and project developers outlining rights and obligations is required.
- Connectivity with Trading Infrastructure: The registry should connect electronically with FRA-licensed settlement and clearing companies for data exchange, particularly related to carbon credit ownership.
Validation and Verification Requirements
- Approved Verification Bodies: The registry needs a list of approved validation and verification bodies, adhering to the provisions of FRA Decree No. (163) of 2023.
- Sector Eligibility: The registry should specify the sectors eligible for carbon emission reduction project registration.
- Conflict of Interest Prevention: Strict rules and procedures are needed to prevent conflicts of interest between the registry operator, project financers, and the validation and verification bodies.
Governance Requirements
- Maintain an appropriate organizational structure based on business volume.
- Board members must avoid conflicts of interest and seek approval for contracts involving personal interests.
- Establish IT Governance and Technology Risk Management Committees.
- Board members must exercise due diligence in Registry activities.
Information Systems Requirements
- Maintain a separate issuance system for validation, verification, and documentation.
- Operate a registry system to manage ownership transfers of credits, supporting various processes.
Technological Infrastructure Requirements
Hardware and network capacities must align with system requirements, using licensed software and robust security protocols to ensure continuous operation and data exchange, while security mechanisms like firewalls, multi-factor authentication, and data encryption protect the IT environment. Annual penetration tests, incident reporting to FRA, time synchronization, and comprehensive event logging for at least five years are essential for maintaining security and operational integrity.
Infrastructure-Related Requirements
A disaster recovery strategy matching the main system's specifications must be established at both headquarters and an alternate location, including energy, environmental, and safety controls. Physical security measures, reliable backup power, and efficient energy consumption strategies should be implemented to optimize data center performance and minimize carbon footprint
