Malaysia propels forward into voluntary carbon market programme

KUALA LUMPUR - Malaysia is ramping up its commitment to the voluntary carbon programme as the Natural Resources, Environment and Climate Change Ministry work to allign the country's nationl carbon programme.

Its minister Nik Nazmi Nik Ahmad said the programme titled 'Bursa Carbon Exchange' (BCX) was introduced in December 2022 was a part of the nation’s commitment towards achieving its net zero greenhouse gas emission (GHG), in line with its Nationally Determined Contribution commitment to slash emissions as early as 2050.

The BCX is a spot exchange that is a facility that provides an avenue for trading high-quality carbon credits via standardised carbon contracts.

Private corporations are given an avenue to purchase these credit to offset their carbon footprints while the sales will help finance the development of domestic GHG emissions reduction, projects and removal solutions.

“We can expect that by the end of the year, the first national option of the nation’s carbon project will enter BCX,” Nik Nazmi told reporters at the The Institute of Strategic and International Studies (ISIS) PRAXIS2023 event yesterday.

The minister, in his keynote speech at the event reiterated Malaysia’s commitment to its climate goals.

He said the establishment of a well-regulated carbon market as a potential to reduce deforestation, improving biodiversity protection, addressing poverty as well as carbon sequestration.

Reiterating that entire livelihoods were dependent on our forests and on this, he said it was also imperative that we ensure that indigenous populations and vulnerable communities are not marginalised when drafting a national carbon market policy.

“In other words, the carbon trading and carbon market must strike a balance between the triple bottom line of the planet, people and profit,” he said.

In support of the carbon credit market programme, he said the announcement of the Biodiversity Sukuk valued at RM1 billion by the Prime Minister Datuk Seri Anwar Ibrahim at Budget 2024 opened up more opportunities to provide funding for state governments to overcome forest degradation.

“It is crucial to remember that our natural forests play a vital part in meeting our net zero aspirations as early as 2050. These forests function as an invaluable carbon sink offsetting approximately 77 per cent of Malaysia’s annual GHG emissions," he added.