KUALA LUMPUR – Bursa Malaysia Berhad has announced that it will be launching the Voluntary Carbon Market (VCM) exchange later this year.
In a recent statement, the Exchange explained that the launch is in line with the increasing awareness of climate action, where VCMs will play a crucial role in providing financial support for projects and solutions that are reducing, removing, or avoiding greenhouse gas emissions (GHG).
It said that a VCM exchange would enable companies to purchase voluntary carbon credits which they could use to offset their own carbon emission footprint while at the same time, meet their voluntary climate goals.
Bursa Malaysia said that through its VCM exchange, buyers and suppliers alike would be able to transact high-quality carbon credits at transparent prices with standardised carbon credit products that meet the ruling-criteria of the exchange.
“There will be distinct product categories for carbon credits derived from nature- based solutions and technologies that reduce or remove carbon emissions.
“The VCM exchange will aggregate carbon credits that share similar traits and fundamentals, with vintages 2016 onwards. Additionally, the Exchange will also label products to differentiate between carbon credits sourced in Malaysia and globally,” the statement said.
It said that by the end of this year, a supply of carbon credits will be sold to interested buyers via auction, which will enable price discovery for the new standardised carbon credit products that will be offered on the VCM exchange.
“The clearing price from the auction will establish a baseline demand for carbon credits in Malaysia, which will provide a reference point for secondary trading for market participants. In addition, it will help provide clear price signals to support the development of domestic carbon credit projects. To achieve a lower carbon footprint over time, corporations can use these carbon credit products to voluntarily offset their existing climate impact alongside other internal carbon reduction initiatives,” Bursa Malaysia added.
Furthermore, the statement said that the VCM exchange will adopt the Verified Carbon Standard or better known as Verra, a widely recognised standard in the voluntary carbon market which accounts for almost 70% of the global voluntary carbon credit issuances.
Bursa Malaysia’s Chief Executive Officer, Datuk Muhamad Umar Swift, said that the Exchange has been engaging with different stakeholders towards the development of a carbon market, to ensure strong participation from the stakeholder groups.
“Stakeholder engagement is key in facilitating greater understanding among industry players to enable their participation in the VCM Exchange, and in order to meet ESG requirements required by parties such as lending institutions.
“With better understanding of carbon credit origination and listing processes, stakeholders will be able to develop capacities to be part of the carbon-credit supply chain. This will also help the industry to use the VCM to reduce their carbon footprint,” he stated.
“We believe that the VCM exchange can serve as an important lever in realising Malaysia’s net zero GHG emissions aspiration, as well as supporting the private sector’s voluntary climate commitments and decarbonisation journey and will act as a catalyst which encourages investments in high-quality offsetting projects which can create positive environmental and societal benefits,” he added.
Bursa Malaysia is inviting interested parties who are keen to submit their interest to supply carbon credits for the auction, as well as for the VCM exchange in the medium and long-term period to email them at [email protected]
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