Malaysia’s first nature-based carbon credit to be available in Q1

MALAYSIA’S first nature-based carbon credit is expected to be available for the first time to Malaysian buyers at the Bursa Carbon Exchange (BCX) within the first half of this year.

According to Sabah chief conservator Datuk Frederick Kugan, partners in the state’s Kuamut Rainforest Conservation Project have agreed to make its Verified Carbon Units available to Malaysian buyers through the BCX.

Initially, intended solely for the international market, the VCUs will now be accessible domestically.

“The Kuamut project is a partnership between the state government via the Sabah Forestry Department, Yayasan Sabah, with Permian Malaysia, a subsidiary of the UK-based Permian Global,” said Kugan.

“Permian Malaysia was handling the marketing of the VCUs to the international market to get us good prices for the Kuamut Project credits.

“However, we have also agreed to make the credits available to Malaysian buyers through the BCX, and now Permian Malaysia is discussing the volume of credits to be auctioned,” he added.

According to reports, the Kuamut project credits have already been registered with the certification scheme Verra but are pending validation of their triple gold rating based on Verra’s Climate, Community, and Biodiversity standards.

BCX assistant vice-president (business development and sales) Muhammad Rizal Azmi indicated the carbon credits from the Kuamut project will be offered through the BCX in February.

“As soon as the carbon credits are issued, we will be able to auction them as the very first Malaysia-based carbon credits.”

The Kuamut project involves 83,381 hectares of tropical rainforests in Tongod and Kinabatangan, over 260km to the southeast of Kota Kinabalu.

The project includes portions of previously logged-over areas.

The public-private initiative was also supported by the South East Asia Rainforest Research Partnership and Pacost Trust on community organisations in the Kuamut project, particularly the community organisation.

The Kuamut Rainforest Conservation Project has already obtained the Improved Forest Management projects by carbon project rating firm BeZero.

It is expected to reduce emissions by 543,049 tonnes of carbon dioxide equivalent per year over its 30-year lifespan as stated in the contract.

The 30-year venture between the Forestry Department, Yayasan Sabah and also Permian Malaysia on the Kuamut Rainforest Conservation Project only came to light in August 2022, when it was revealed to the local media that Sabah has already renewed its service agreement in 2021.

The parties decided to agree about 13 years ago.

Meanwhile, BCX will be supported by Gold Standard to develop capacity building and encourage the validation and verification bodies of carbon projects in the Malaysian market.

BCX and Gold Standard signed a memorandum of understanding at COP28 on December 4 last year.

Additionally, the understanding would allow BCX to issue the world’s first shariah-compliant carbon exchange based on the standards and methods set by the Gold Standard.

Sabah Chief Minister Datuk Seri Hajiji Noor also believes the Kuamut project would propel Sabah as a global leader in carbon projects.

“As a public-private partnership, it is important that such endeavours will not only provide Sabah protection of its ecosystem but also support the people,” he said. – The Vibes, April 10, 2024