Bursa Carbon Exchange commences continuous trading for Renewable Energy Certificates

Bursa Malaysia Berhad (“Bursa Malaysia”) announced that its wholly-owned subsidiary, Bursa Carbon Exchange (“BCX”) commenced continuous trading of renewable energy certificates (“RECs”) on 9 September 2024.1 This extends on the previous auction of RECs conducted by BCX2 and will also facilitates off-market transactions.
 
From the inaugural offering of Malaysia Hydropower REC Contract3 (“HREC”) on 9 September 2024, BCX introduced the Malaysia Solar REC Contract4 (“SREC”) and the Malaysia Bioenergy REC Contract5 (“BREC”) on 12 September 2024.
 
According to BCX’s Daily Scoreboard, 100 HREC24 were transacted by way of continuous trading and 3,900 HREC24 were transacted by way of off-market transaction on 9 September 2024.
 
The launch of trading of RECs expands the product range offered on BCX, which also facilitates trading of carbon credits via the Global Nature-Based Plus Carbon Contract6 (“GNC+”), Global Technology-Based Carbon Contract7 (“GTC”) and Malaysia Nature-Based Plus Carbon Contract8 (“MNC+”).
 
The expansion of the contracts available for trading on BCX marks another milestone in Bursa Malaysia’s journey to become a multi-asset exchange.
 
Alert by Kok Chee Kheong (Partner) of the Corporate Practice and Tham Zhi Jun (Associate) of the Environmental, Social and Governance Practice of Skrine.
 

1 Bursa Malaysia’s media release dated 17 September 2024 can be accessed here.
2 BCX successfully concluded its first auction of RECs generated from the Murum Hydroelectric Plant, Sarawak on 25 June 2024. Bursa Malaysia’s media release dated 25 June 2024 can be accessed here.
3 Each HREC represents a standardised contract for delivery of Units issued by the Evident Registry (I-REC (E)) (“Evident Registry”). The HREC features hydropower production devices located in Malaysia.
4 Each SREC represents a standardised contract for delivery of Units issued by the Evident Registry. The SREC features solar production devices located in Malaysia.
5 Each BREC represents a standardised contract for delivery of Units issued by the Evident Registry. The BREC features bioenergy production devices located in Malaysia.
6 Each GNC+ represents a standardised contract for delivery of Units issued by Verra. The GNC+ Contracts feature global nature-based GHG reductions project which demonstrates co-benefits from prevailing methodologies for Agriculture, Forestry and Other Land Use (AFOLU) sector.
7 Each GTC represents a standardised contract for the delivery of Units issued by Verra. The GTC Contracts feature global technology-based GHG reductions projects from sectors other than Agriculture, Forestry and Other Land Use (AFOLU) sector located outside of Malaysia.
8 Each MNC+ represents a standardised contract for delivery of Units issued by Verra. The MNC+ Contracts feature Malaysia nature-based GHG reductions project which demonstrates co-benefits from prevailing methodologies for Agriculture, Forestry and Other Land Use (AFOLU) sector.

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.