The decision, No. 36 of 2026, was approved by the FRA’s board during its meeting on 28 January 2026, chaired by Mohamed Farid, newly appointed Minister of Investment and Foreign Trade and former FRA chairman.
It is based on the Capital Market Law, regulations governing non-banking financial activities, and the FRA Board Decision No. 107 of 2021 concerning ESG disclosure requirements.
Under the new rules, companies with issued capital or net equity exceeding EGP 100 million must prepare an annual carbon footprint report. The report should include emissions data generated from the company’s activities, measured under the Scope 1 and Scope 2 standards.
A carbon footprint refers to the total greenhouse gas emissions resulting from an individual’s or entity’s activities, measured annually in tonnes of carbon dioxide equivalent (CO₂e).
Scope 1 covers direct emissions, such as fossil fuel combustion in generators or heating systems, company-owned vehicles, and emissions from factories or production sites. Scope 2 includes indirect emissions from electricity consumption, heating, and cooling within company facilities.
The FRA stipulated that emissions data must be reviewed and verified by accredited validation and verification bodies registered with the authority. Companies are required to submit their reports to the FRA by the end of June 2026 and annually thereafter in line with their fiscal year-end.
Additionally, firms must offset approximately 20 percent of their disclosed annual emissions by purchasing carbon reduction certificates registered in the FRA’s database within the regulated voluntary carbon market.
The certificates must be acquired within 90 days of submitting the emissions report.
The decision states that compliance with these requirements will be a condition for maintaining operating licenses.
The regulation will enter into force the day after its publication in the Egyptian Gazette and on the FRA’s official website.
The move is expected to provide a strong boost to Egypt’s regulated voluntary carbon market by stimulating demand. The market currently offers around 170,000 carbon certificates issued from 34 registered projects and is supported by eight accredited verification and validation bodies, providing companies with a reliable mechanism to offset emissions and contribute to international climate goals.
The FRA said the decision aims to institutionalise environmental disclosure practices within the non-banking financial sector, enhance adherence to ESG standards, encourage companies to reduce their carbon footprint, and support national and international sustainability efforts.
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