Bursa to launch voluntary carbon market exchange by end of 2022

KUALA LUMPUR (August 15): Bursa Malaysia Bhd is launching a Voluntary Carbon Trading Market (VCM) by the end of 2022, which will allow businesses to purchase voluntary carbon credits from environmentally friendly projects and solutions. climate.

In a statement released Monday, August 15, the exchange operator said the inaugural transaction would be through auction.

The VCM is intended to support the financing of projects and solutions aimed at reducing, removing or avoiding greenhouse gas (GHG) emissions, in line with the growing awareness of climate action.

Bursa wants to enable buyers and suppliers to trade high-quality carbon credits at transparent prices through the VCM exchange.

It intends to offer standardized carbon credit products for trading through a rules-based VCM exchange.

“There will be separate product categories for carbon credits derived from nature-based solutions and technologies that reduce or eliminate carbon emissions.

“The VCM exchange will group together carbon credits that share similar characteristics and fundamentals, with vintages [from] from 2016,” Bursa said.

He added that the products will be labeled to differentiate carbon credits from Malaysia and the world.

By the end of 2022, Bursa said a supply of carbon credits should be auctioned off to interested buyers.

“The auction will uncover the prices of new standardized carbon credit products that will be listed on the VCM exchange.

“The auction clearing price will establish a benchmark demand for carbon credits in Malaysia, providing a benchmark for secondary trading for market participants.

“Furthermore, it will help provide clear price signals to support the development of national carbon credit projects,” he said.

Bursa said it will adopt the Verified Carbon Standard (Verra) to ensure high integrity of carbon credits offered through the VCM exchange.

According to Bursa, Verra is a widely recognized standard in the voluntary carbon market, accounting for nearly 70% of voluntary carbon credit emissions globally.

“Verra has developed transparent, credible and robust methodologies covering a wide range of climate-friendly activities, such as nature-based projects, methane avoidance or capture, sustainable farmland management, green mobility and others.

“Using the Verra standards, carbon credit projects will undergo a rigorous assessment that ensures environmental claims are properly measured and independently verified, thereby preventing greenwashing claims,” he said.

Bursa pointed out that she signed a memorandum of understanding with Verra in May, which focuses on capacity building.

Bursa Chief Executive Datuk Muhamad Umar Swift believes the VCM exchange can serve as an important lever to achieve Malaysia’s net zero GHG emissions aspirations, as well as supporting voluntary climate commitments and the country’s decarbonization journey. private sector.

“The VCM will act as a catalyst, encouraging investment in high-quality offset projects that can generate positive environmental and societal benefits,” he said.

Bursa said it has continued to engage with various stakeholders towards the development of a carbon market.

“Stakeholder engagement is essential to facilitate a better understanding between industry players to enable their participation in the VCM exchange and to meet the ESG (environmental, social and governance) requirements required by parties such as credit institutions,” Umar said.

“With a better understanding of the carbon credit origination and listing processes, stakeholders will be able to build capacity to become part of the carbon credit supply chain. It will also help the industry to use VCM to reduce its carbon footprint.

Read also:
Bursa Malaysia Partners with Verra to Further Strengthen the VCM Ecosystem

Leave a Comment

Your email address will not be published.