Bursa Coal Exchange organizes first auction of nature-based carbon credits in the country

KUALA LUMPUR: Bursa Malaysia BhdA subsidiary of Bursa Carbon Exchange (BCX) has conducted Malaysia’s first carbon credit auction, using carbon credits from the Kuamut Rainforest Conservation Project in Sabah.

The exchange operator said in a statement that the auction was attended by companies and organizations that committed to reducing their environmental impact through several credible pathways, including offsetting hard-to-reduce greenhouse gas emissions with carbon credits.

The auction of the national forest protection and regeneration project was concluded on the basis of a contract amounting to RM 50 million.

According to Bursa Malaysia, the Kuamut project has garnered international recognition and has been recognised as best-in-class as one of the top-rated improved forest management (IFM) projects in the world by carbon assessment agency BeZero Carbon.

“We have been waiting for a long time for Malaysia to finally witness the auction of its first domestic, high-quality carbon credits,” said Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift, adding that organic growth in the voluntary carbon market will take time to mature.

His observation was based on the voluntary renewable energy certificates (REC) market, where organic growth of the nascent market took at least five years to reach scale.

Given the complexity of implementing some carbon projects compared to renewable energy projects, the carbon market may take longer to reach the same stage of growth as the REC market, especially when natural environment-based projects are involved.

“A critical step in accelerating the development of domestic carbon projects is the adoption of some form of lawful carbon market,” he added.