Introducing Bursa Carbon Exchange

Bursa Carbon Exchange, which is Malaysia’s voluntary carbon market exchange (VCM), is part of the nation’s commitment towards achieving net zero greenhouse gas (GHG) emissions as early as 2050. The BCX is a spot exchange that facilitates the trading of high-quality carbon credits via standardised carbon contracts. Corporates may purchase these credits to offset their carbon footprint while the sale of carbon credits, in return, will help to finance and drive the development of domestic GHG reduction and removal solutions and projects.

01
Established Player

BCX is wholly owned and operated by Bursa Malaysia, one of the largest and oldest bourse in ASEAN. Our status as a global commodities exchange and our strong equity base makes us a well-established player in the industry.​

  • Unique access to over 900 listed companies.
  • Access to Malaysian based carbon credits.
02
Shariah Compliant

BCX is committed to responsible and fair business practices, positive social impact and long-term value creation; principles that position us as a leader in the global Shariah capital markets​.

  • World's first Shariah-compliant carbon exchange​.
  • Stringent due diligence onboarding processes.
03
Market-Driven

BCX is focused on developing relevant, data driven solutions and innovative products to meet our customers' evolving needs.

  • Reduced counterparty & delivery risk.​
  • Instantaneous settlement​.​
  • High-quality carbon credits.

We believe Bursa Carbon Exchange can serve as an important lever in realising Malaysia’s net zero greenhouse gas emissions aspiration, as well as supporting the private sector’s voluntary climate commitments and decarbonisation journey,”

Datuk Umar Swift
Chief Executive Officer, Bursa Malaysia

Be A Part of the Net Zero Journey Today!

Join us for our upcoming inaugural auction on 16 March 2023.

Just download and fill out the Participant Application Form and send it back to us at [email protected] by 31 January 2023.
Participant Application Form
Rules of Bursa Carbon Exchange
Frequently Asked Questions

Voluntary carbon markets allow carbon emitters to offset their emissions by purchasing carbon credits emitted by projects that remove or reduce greenhouse gases (GHG) from the atmosphere.

The Bursa Carbon Exchange (BCX) is Malaysia’s voluntary carbon market exchange (VCM), and the first Shariah-compliant carbon exchange in the world. The voluntary carbon exchange is operated by Bursa Malaysia, one of the largest exchanges in ASEAN. The BCX is a global spot exchange that enables corporates to take practical climate mitigation action through the trading of carbon credits from projects with measurable climate action outcomes that adhere to the international standards.

The BCX will provide three modes of carbon trading, namely

  1. Auctions of carbon credits. [Our inaugural auction is targeted to take place on 16 March 2023, and will also be held from time to time, e.g. when a new category of standardised contract is introduced, to facilitate price discovery.]
  2. spot trading for standardised contracts of carbon credits,
  3. spot trading services for off-market transactions. [Off-market transactions refer to contract deals that are settled outside of our central order book and where such buyer and seller want to utilise our onboarding (i.e. know-your-client processes), as well as clearing and settlement services for their direct carbon credit transactions.]

Voluntary carbon markets catalyse and provide financial incentive for developing and implementing mitigation activities, such as those reforesting mangroves and wetlands to the ones avoiding deforestation, those facilitating the improved or sustainable management of forested areas, or technologybased solutions that support emissions avoidance, reduction or removal from the atmosphere.

For Malaysia, a well-structured VCM could unlock Malaysia’s significant potential to generate nature-based carbon credits through its vast forest. The VCM can also provide a cost-recovery measure for corporates to implement climate-friendly technologies and solutions to decarbonise their operational carbon footprints.

At the state level, a VCM can spur forestry conservation projects that will provide both economic and environmental benefits. For instance, nature-based carbon project development can bring about additional benefits, such as multiplier effects on the local and state economy, on top of conservation and environmental benefits.

Companies (buyers) would benefit from purchasing carbon credits generated locally or internationally, demonstrating their commitment to sustainability by voluntarily offsetting some of their carbon emissions.

It is Bursa Malaysia’s vision to become ASEAN’s leading, sustainable and globally connected marketplace. In line with that and our strategic focus, we aim to grow our suite of sustainability-themed products and services that create positive impacts for planet and society. As the world transitions towards a net zero greenhouse gas (GHG) emissions future, VCMs will play an important role to facilitate capital flows towards climate-friendly projects and solutions that aim to avoid, reduce or remove GHG emissions.

We strongly believe a vibrant and well-functioning VCM will help catalyse green industries and accelerate our country’s progress towards net zero GHG emissions. The setting up of our very own VCM exchange, i.e. the Bursa Carbon Exchange (BCX), represents an important growth lever for us as we strive to build a diversified and sustainable exchange. Through the Bursa Carbon Exchange, we provide a rules-based and transparent approach for both buyers and sellers to transact carbon credits, and increase the accessibility and efficiency of the voluntary carbon market to serve all stakeholders.

Our unique propositions are:

  1. Bursa Malaysia is an established national exchange:
    1. BCX is wholly owned and operated by Bursa Malaysia, one of the largest and oldest bourses in ASEAN. Our status as a global commodities exchange and our strong equity base makes us a well-established player in the industry.
    2. Unique access to over 950 listed companies
    3. Access to Malaysian based carbon credits
  2. World’s first Shariah Compliant Carbon Exchange:
    1. BCX is committed to responsible and fair business practices, financial inclusion, positive social impact and long-term value creation; principles that position us as a leader in the global Islamic Capital Market.
  3. Market Driven:
    1. BCX is focused on developing relevant, data driven solutions and innovative products to meet our customers' evolving needs.
    2. Reduced counterparty & delivery risk
    3. Instantaneous settlement
    4. High-quality carbon credits
    5. Appropriate due diligence onboarding processes for participants and carbon credits.

Yes, any entity can participate, subject to the eligibility clause under the BCX Rules. Under the BCX Rules, buyers and sellers are incorporated entities, that can be foreign entities, or companies incorporated in Malaysia. They can be from broad categories that include buyers and sellers: commodity traders, financial institutions, brokers, project developers, corporates (who wish to reduce their own operational emissions footprint, or they have a separate business on carbon trading).

At this juncture, our market participants do not include individuals.

Simply download the onboarding form from our BCX microsite https://bcx.bursamalaysia.com or email [email protected] for more information.

There are many incentives to participate in the VCM, but the key ones are:

  1. Purchase of carbon offset as one of the quick strategies to reduce emissions footprint;
  2. Provides decarbonizing solution to address emissions residual gap to meet emissions reduction target;
  3. Revenue generation opportunities – diversification of income to a more sustainable business;
  4. Cost recovery opportunities especially for the hard-to-abate sectors when it comes to implementing decarbonizing activities.
  5. Companies which demonstrate efforts to reduce their operational emissions footprint will have opportunities to access low cost of funds, are more investible, will better meet green, international supply chains demands, are more future proof compared to peers who are not, and can attract talent pool of human resources who are increasingly focused on serving companies with stronger sustainability agenda.

Project types allowed would be Nature Based Solutions (NBS) or Tech-based Solutions (removal or avoidance). Currently, vintage accepted will be from year 2016 onwards (to ensure the increasingly robust international carbon credit standards are met). Only high quality carbon credits from projects issued by leading international carbon credits standards are traded on the BCX. Currently, the BCX has adopted the Verified Carbon Standard or better known as Verra.

To maintain global standards, the Bursa Carbon Exchange will offer carbon credits issued under the Verified Carbon Standard. Better known as Verra, they have developed credible and robust methodologies covering a wide array of climate-friendly activities such as nature-based projects, methane avoidance or capture, sustainable agricultural land management, green mobility and others.

Verra is a widely recognised standard in the voluntary carbon market, accounting for nearly 70% of voluntary carbon credit issuances globally. Vintages accepted will be from 2016 and onwards, and projects will need to be registered with Verra.

The Bursa Carbon Exchange will enable the trading of standardised carbon contracts with underlying high quality carbon credits. We recognise that companies often avoid buying credits due to uncertainty around assessing the quality and suitability of carbon projects. Standardized carbon contracts would simplify how buyers assess products.

We will ensure that the carbon credits meet with the relevant contract specifications before they can be traded on our exchange.

The primary market mechanism will be the continuous trading of standardised carbon contracts.

Standardised carbon contracts represent a collection of credits from projects that meet certain specified characteristics. Products can be standardized based on attributes that buyers use to differentiate and assess carbon credits. Typical attributes include project type (e.g., Nature Based Solutions (NBS) or tech-based, removal or avoidance), geography, co-benefits, and standards.

Yes, Bursa Carbon Exchange is the first Shariah-compliant* carbon exchange in the world(*as pronounced by the Shariah Committee of Bursa Malaysia Islamic Services). In addition, the carbon credits have also been recognised as a Shariah-compliant asset by the said Shariah Committee.

Project developers and project proponents with projects registered under the Clean Development Mechanism (CDM) can potentially be suppliers of standardised carbon contracts for trading on BCX, provided that they are able to convert their issued Certified Emission Reductions (CERs) to Verified Carbon Units (VCUs) in the VCS registry and the credits’ vintage are 2016 onwards. Interested parties can reach out to us for further guidance on the CER conversion process. Please use the interest registration form posted on our website.

Companies may choose to:

  1. keep the underlying carbon credits in their BCX trading account for future use
  2. sell the standardised contracts with the underlying carbon credits via BCX’s continuous trading platform
  3. transfer the underlying carbon credits to their own registry account with Verra, or retire the underlying carbon credits to offset their carbon footprint
Contact Us
If you would like to learn more about the Bursa Carbon Exchange, please complete the form below or email us directly at [email protected] and we will be in touch as soon as possible.