Notes on Carbon Markets in Malaysia

 Source: The Edge Malaysia September 15, 2022

The volume of credits required globally would increase by at least 20 times by 2035, with prices rising to US$80 to US$150 per tonne by 2035 from the current US$25 per tonne. 

The ultimate goal of carbon markets is to help entities offset carbon emissions that they cannot currently reduce. The market enables the trading of carbon credits- this could be tech-based solutions like a waste-to-energy plant or nature-based solutions such as reforestation and sustainable forest management. 

There are internationally recognised standards for carbon credits like the Verified Carbon Standard (Verra) and The Gold Standard, which have rules on what qualifies as a carbon credit.

GOOD-QUALITY CARBON CREDITS

ADDITIONALITY is the most frequently measured which means that the project would not have been feasible had it not been for the revenue generated from selling carbon credits. A protected forest also cannot be stripped of its status to generate carbon credits. 

For example, if the land has been gazetted as a forest reserve, it means that there is no element of additionality. 

Another criterion is who owned the land and the time period in which the land was degraded or deforested is also crucial to ensure a certain land is not deliberately degraded and rehabilitated years later to generate carbon credits.

If the clearing or land conversion occurred at least 10 years before the proposed project start date. 

Another principle is the carbon reductions or removals from a project must be permanent 

CAN MALAYSIA BECOME A HUB FOR CARBON CREDITS? 

Malaysia has generated carbon credits under the clean development mechanism which was established by the United Nations' Kyoto Protocol. Most of the projects involved generation of renewable energy from biomass waste in the palm oil industry. 

One of the biggest CDM projects in the region is the Bukit Tagar EnviroParks waste-to-energy plant, which is operated by Berjaya Enviroparks Sdn Bhd. It is sold to the grid using Feed-in-Tariff Rates m an average of 2,600 tonnes of waste delivered per day. As of September 2022, it has generated about 2.7 million tonnes of verified carbon credits under the CDM.