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Wednesday, November 29, 2023

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Bursa Malaysia to launch national voluntary carbon market handbook in October

Bursa Malaysia has signed a memorandum of collaboration with the Malaysian Green Technology and Climate Change Corporation (MGTC) to launch a national voluntary carbon market (VCM) handbook in October this year.

The handbook will be launched at Bursa Malaysia’s inaugural Malaysia Carbon Market Forum five months after the Bursa Carbon Exchange (BCX)’s inaugural carbon auction, which is set to take place in March.

“The VCM handbook will serve as an important toolkit for increasing the supply of high-quality carbon credits traded on the BCX, where it will support and guide key players in Malaysia to generate carbon credits in accordance with international standards,” Umar Swift, CEO of Bursa Malaysia, commented.

Supported by the Malaysian Ministry of Natural Resources, Environment and Climate Change, MGTC CEO Shamsul Bahar Mohammad Nor noted that the development of the handbook will indirectly empower companies to develop projects to reduce greenhouse gas emissions and increase carbon sequestration.

While the to-be-launched handbook directly relates to publicly listed companies (PLCs), Umar noted that the impact of the collaborative effort will trickle down to the supply chains of the participating PLCs, thus extending its reach beyond the universe of PLCs.

Also as part of the collaboration, the parties will create a directory of carbon industry service providers as well as promote technical expertise and knowledge-sharing among ecosystem players.

According to Umar, Malaysian companies need to keep up with the changing global landscape. As a trade-based economy, Malaysian companies need to comply with the changing standards and sustainability scrutiny of their trade partners to ensure they do not lose business.

The BCX was launched in December last year by the Malaysian stock exchange as the world’s first Shariah compliant VCM. The upcoming inaugural auction is primarily envisioned as a carbon pricing exercise.

Bursa Malaysia has so far received applications from 23 participants for the inaugural auction, including both buyers and suppliers of carbon credits. The stock exchange is still in the process of approving and finalizing the participants. Most of the applicants consist of local entities, Bursa Malaysia shared.

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