Bursa Carbon Exchange (“BCX”), has carried out its first Malaysian Carbon Credit auction today with carbon credits from the Kuamut Rainforest Conservation Project in Sabah.
In a significant step towards combating climate change, Malaysia has entered the voluntary carbon credit market with its first-ever auction of nature-based carbon credits. The event, held by Bursa Carbon Exchange (BCX), a subsidiary of Bursa Malaysia Bhd, marks a crucial milestone in the country’s environmental efforts.
RELEVANT SUSTAINABLE GOALS
First local carbon credit auction
The auction, which took place on Thursday 25 July 2024, featured carbon credits from the Kuamut Rainforest Conservation Project in Sabah. This project has gained international recognition as one of the world’s highest-rated improved forest management (IFM) initiatives, according to carbon ratings agency BeZero Carbon.
The domestic forest protection and regeneration project credits were successfully auctioned at RM50 (approximately $10.70) per contract. This price point sets a benchmark for voluntary carbon credits from Malaysian nature-based projects, potentially influencing future market dynamics.
Datuk Muhamad Umar Swift, Chief Executive of Bursa Malaysia, emphasized the need for Malaysia to adopt carbon pricing instruments to accelerate the development of domestic carbon projects. “To ensure sustainable demand and pricing for domestic carbon credits, Malaysia must implement some form of compliant carbon pricing instrument,” Swift stated.
However, Bursa Malaysia cautioned that such instruments must be carefully calibrated in developing countries like Malaysia to balance decarbonization efforts with business viability, upholding the principle of just transition.
The Kuamut Project
The Kuamut project has achieved Gold Level status for Climate under the Climate, Community, and Biodiversity (CCB) Standards, underscoring its tangible benefits for climate, communities, and biodiversity. It also contributes to several United Nations Sustainable Development Goals.
For Malaysia, the Kuamut project holds national significance, demonstrating the country’s capacity to produce high-integrity carbon credits successfully. As a flagship project for local forest-based carbon credits, it paves the way for other states to preserve their forests and natural resources while contributing to the nation’s commitment to maintain at least 50% of its land under forest and tree cover – a pledge made during the 1992 Earth Summit.
This auction represents a pivotal moment in Malaysia’s environmental policy, potentially setting the stage for a more robust domestic carbon market and reinforcing the country’s commitment to sustainable development and climate action.
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