Bursa Malaysia had officially launched its voluntary carbon market, dubbed the Bursa Carbon Exchange (BCX), which enables companies and other entities to trade voluntary carbon credits from climate-friendly projects and solutions in a bid to meet their climate goals. It is also said to be the first shariah-compliant carbon exchange in the world, and is set to conduct its first trade via auction in March 2023.

Carbon credits are essentially described as a kind of tradeable permit that allows an organisation the right to emit a set amount of carbon dioxide (one credit is typically equivalent to one tonne of carbon dioxide emission). The credits can be generated from nature- or tech-based solutions that result in the reduction, removal, or avoidance of greenhouse gas emissions. It is then sold on an exchange to interested companies that may use it to offset their own existing carbon footprint, keep it for future use, or re-sell standardised contracts with underlying carbon credits through a trading platform.

To clarify, standardised contracts refer to a collection of carbon credits that share certain attributes. These include traits such as project type (such as nature- or tech-based solutions), geography, or standards.

In a statement, Bursa Malaysia stated that the BCX seeks to support Malaysia’s ambition of achieving its target of net zero greenhouse gas emission by 2050. At the same time, it helps corporates in Malaysia to gradually shift towards green economy and meet global demands for a sustainable supply chain.

Chairman of Bursa Malaysia, Tan Sri Abdul Wahid Omar said that Malaysia’s BCX will pay a significant role in supporting the nation’s and the world’s voluntary carbon market ecosystem. “In addition, leveraging on Malaysia’s position as the global Islamic financial marketplace as well as being the world’s leading exchange for Islamic fundraising and investment, Bursa Malaysia is the first exchange in the world to receive a Shariah Pronouncement for its carbon exchange and the standardised carbon products that the exchange will offer,” he said.

Meanwhile, the chief executive officer of Bursa Malaysia, Datuk Muhamad Umar Swift highlighted that the launch of the BCX is timely given the growing impact of global warming. He also stressed the role of voluntary carbon markets in supporting financing for climate-friendly projects and solutions.

“Both buyers and suppliers will now be able to transact high-quality carbon credits and use them to offset their existing climate impact alongside their other internal carbon reduction initiatives,” said Datuk Muhamad Umar.

Entities that are interested in supplying carbon credits on BCX and its first auction, as well as those who would like to participate and purchase carbon credits, are encouraged to register their interest. They can do so by filling up an onboarding form or sending an email to the BCX at [email protected].

(Source: Bursa Malaysia)

• TAGS:
• Bursa Carbon Exchange (BCX)
• Bursa Malaysia
• Carbon Credits
• Datuk Muhamad Umar Swift
• ESG Financing
• ESG Investments
• Shariah-ESG Investments
• Tan Sri Abdul Wahid Omar