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.
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.
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.
BCX is focused on developing relevant, data driven solutions and innovative products to meet our customers' evolving needs.
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,”
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
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:
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.
There are many incentives to participate in the VCM, but the key ones are:
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: