Bursa Malaysia to launch Voluntary Carbon Market Exchange before end-2022

Bursa Malaysia Berhad (‘the Exchange’) issued a media release on 15 August 2022 to announce that it will be launching a Voluntary Carbon Market (‘VCM’) exchange later this year. 
According to the media release, the VCM exchange will enable buyers and suppliers to transact high-quality carbon credits at transparent prices. The Exchange added that participation in the voluntary
carbon market will allow companies to offset their carbon emission footprint and meet their voluntary climate goals.
The Exchange also stated that it intends to offer standardised carbon credit products for trading through a rules-based VCM exchange and that there will be distinct product categories for carbon credits derived from nature-based solutions and technologies that reduce or remove carbon emissions. The products will also be labelled to differentiate between carbon credits sourced in Malaysia and globally.
The Exchange said that by end-2022, a supply of carbon credits will be sold by way of auction and the clearing price from the auction will establish a baseline demand for carbon credits in Malaysia and provide a reference point for secondary trading for market participants.
To ensure high integrity of carbon credits offered through the VCM exchange, the Exchange will adopt the Verified Carbon Standard, also known as Verra, a widely recognised standard in the voluntary carbon market that accounts for nearly 70% of voluntary carbon credit issuances globally.
The Exchange has invited interested project developers and project proponents to submit their interest in supplying carbon credits for the auction, as well as for the VCM exchange in the medium
and long-term period. It has also invited corporate buyers who are interested in participating in the auction and purchasing carbon credits to register their interest with the Exchange. The Interest Registration Forms for Suppliers and Buyers are available through links in the media release.
The proposal to establish a VCM was first announced by the Minister of Finance in his 2022 Malaysian Budget Speech on 29 October 2021 as one of the measures to achieve the commitment made earlier by the Prime Minister of Malaysia for the country to achieve carbon neutrality  by 2050.1
Alert by To’ Puan Janet Looi, Co-Head of the ESG Practice Group of Skrine

1 Paragraphs 213 and 214 of the 2022 Malaysian Budget Speech.

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