Finance & Economics

Bursa Carbon Exchange of Malaysia Starts Trading Carbon Credits

The first Shariah-compliant carbon exchange in the world and the pioneer of the voluntary carbon market in Malaysia, Bursa Carbon Exchange commenced trading and facilitation of off-market transactions of carbon credits.

Bursa Carbon Exchange of Malaysia Starts Trading Carbon Credits

Bursa Malaysia Berhad announced that its subsidiary, Bursa Carbon Exchange (“BCX”), had started trading and facilitation of off-market transactions of carbon credits.

The first transactions included two standardised contracts – the Global Technology-Based Carbon Contract (“GTC”), focusing on global technology-based greenhouse gas (“GHG”) reduction projects, and the Global Nature-Based Plus Carbon Contract (“GNC+”), featuring global nature-based GHG reduction projects with co-benefits in the Agriculture, Forestry and Other Land Use (“AFOLU”) sector.

It is expected that, by Q3 2024, BCX will expand its environmental product portfolio with Renewable Energy Certificates (RECs).

Launched in 2022, BCX’s aim is to enable companies to trade voluntary carbon credits from eco-friendly projects and solutions, helping businesses to offset their emission footprint and meet climate goals in a Shariah-compliant way.

The BCX supports Malaysia’s overall ambition to achieve net zero greenhouse gas (“GHG”) emissions by 2050, while accelerating the transit towards a green economy and meeting global demands for a sustainable supply chain.

According to the press release, the first few days of trading were a success. Reportedly, ten companies from various industries transacted a total of 16,500 Verra-registered carbon credits. Moreover, the exchange noted a significant participation by smaller companies, “demonstrating the growing awareness of environmental responsibility among not just public listed companies, but also among small and medium-sized enterprises.”

The need for centralised carbon credit marketplace was also acknowledged by the UAE. In this country, The Ministry of Climate Change and Environment (MoCCAE), the Industrial Innovation Group LLC and Venom Foundation decided to jointly establish a national system for carbon credits using blockchain technology.

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.