KUALA LUMPUR (March 17): Bursa Malaysia Bhd’s subsidiary Bursa Carbon Exchange (BCX) has successfully carried out the nation’s inaugural carbon credit auction.
The auction, held yesterday and carried out electronically, saw encouraging participation with 15 buyers from various industries purchasing a total of 150,000 verified carbon standard (Verra)-registered credits. Verra is a recognised standard in the voluntary carbon market.
Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift said the successful execution of this inaugural auction has raised the awareness level of voluntary carbon market and carbon offsetting opportunities in the country.
“We now have a proven market mechanism which provides price discovery,” he said in a statement today.
He further said that by establishing a market-based price for carbon credits, the auction provides a clear signal to potential project proponents and developers on the economic viability of carbon credits.
“This will incentivise local project owners to develop carbon credit projects that can make a real impact in the fight against climate change,” he added.
BCX, the world’s first Shariah-compliant carbon exchange, enables the trading of standardised contracts with underlying carbon credits from climate-friendly projects and solutions, which corporates can use to offset emission footprint and meet climate goals.
“With this key milestone, the auction facilitated the price-discovery of carbon credits from two new products offered by the BCX, the Global Technology-Based Carbon (GTC) contract and the Global Nature-Based Plus Carbon (GNC+) contract,” Muhamad Umar added.
The GTC contracts featured carbon credits from the Linshu Biogas Recovery and Power Generation project in China.
The project offers benefits align with the United Nations (UN) sustainable development goals (SDG) of generating clean energy (SDG 7), providing decent work (SDG 8) and addressing climate change by reducing fugitive methane emission leakage to the atmosphere (SDG 13).
The GTC contracts were oversubscribed and cleared at RM18.50 per contract.
The GNC+ contracts featured carbon credits from the Southern Cardamom Project, which is a reducing emissions from deforestation and forest degradation project from Cambodia that comes with climate, community and biodiversity standard that provides additional co-benefits, contributing to the livelihoods of local communities and biodiversity conservation in the Indo-Burma biodiversity hotspot.
This GNC+ contract fetched a clearing price of RM68.0 per contract at the auction.
Both projects were carefully selected and curated to spur local interest in similar carbon offsetting project development.
There was strong interest and healthy price signal by the domestic corporate sector, notably government-linked companies and financial institutions, which demonstrated their leadership in the budding voluntary carbon market space in Malaysia. – Bernama