In the hopes of establishing a voluntary carbon market (VCM) in Malaysia, the Bursa Malaysia Exchange has signed a memorandum of understanding (MoU) with Verra, an international carbon credit standards body.
By collaborating with Verra, Bursa Malaysia hopes to set the groundwork for its VCM, which would be a scalable platform for trading carbon credits based on established regulations and international best practices.
As more businesses need carbon credits to meet net-zero greenhouse gas emissions targets, global demand for voluntary carbon offsets is increasing.
In October last year, the country’s Ministry of Finance announced the launch of the VCM under the Bursa Malaysia, which would allow firms to offset their carbon footprints by purchasing carbon credits produced through projects aimed at removing or reducing greenhouse gas emissions.
The VCM’s establishment is in accordance with Malaysia’s transition to a low-carbon economy and objective of becoming a carbon-neutral country by 2050.
Verra, a non-profit organization, is a renowned international standard setter that operates the Verified Carbon Standard (VCS) Program. The VCS Program includes over 1,800 registered projects in nearly 100 countries that have generated over 900 million carbon credits.
Bursa Malaysia hopes that by signing this MOU, it will be able to construct a VCM that will digitally trade standardized contracts of high-quality carbon credits in a transparent and orderly way.
“This is the first of many avenues that we will pursue to establish a fair and orderly VCM,” said Datuk Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia. “We will continue to work with other entities, like Verra, who have well-established methodologies to measure climate action and sustainable development outcomes and have gone through extensive stakeholder consultation and review.”
This MoU was signed with the goal of developing potential market participants and local ecosystem players through webinars, workshops, seminars, or other events, in order to lay the groundwork for a robust voluntary carbon market in Malaysia.