• Projects offered under Global Technology-Based Carbon Contract (GTC) and Global Nature-Based Plus Carbon Contract (GNC+)
  • 150,000 Verra Certified Units (VCUs) cleared with oversubscription of GTC Contracts
  • Interest by 15 local buyers with strong representation from the financial sector

Bursa Carbon Exchange (“BCX”) had successfully carried out the nation’s inaugural carbon credit auction on 16 March 2023. The auction, which was carried out electronically, saw encouraging participation with 15 buyers from various industries purchasing a total of 150,000 Verra-registered carbon credits.

With this key milestone, the auction facilitated the price-discovery of carbon credits from two new products offered by the BCX - the Global Technology-Based Carbon Contract (“GTC”) and the Global Nature-Based Plus Carbon Contract (“GNC+”).

The GTC Contracts featured carbon credits from the Linshu Biogas Recovery and Power Generation Project in China. The project had benefits that align with the United Nations Sustainable Development Goals (“UN SDG”), namely of generating clean energy (“SDG 7”), providing decent work (“SDG 8”) and addressing climate change by reducing fugitive methane emission leakage to the atmosphere (“SDG 13”). The GTC Contracts were oversubscribed and cleared at RM18.50 per Contract.

The GNC+ Contracts featured carbon credits from the Southern Cardamom Project, which is a REDD+ (Reducing Emissions from Deforestation and Forest Degradation) project from Cambodia that comes with climate, community and biodiversity (“CCB”) standard that provides additional co-benefits, contributing to the livelihoods of local communities and biodiversity conservation in the Indo-Burma Biodiversity Hotspot. This GNC+ Contract fetched a clearing price of RM68.00 per Contract at the auction.

Both projects were carefully selected and curated to spur local interest in similar carbon offsetting project development. There was strong interest and healthy price signal by the domestic corporate sector, notably government-linked companies and financial institutions, which demonstrated their leadership in the budding voluntary carbon market (“VCM”) space in Malaysia. The successful bidders at the auction were:

  • AmBank (M) Berhad
  • AmBank Islamic Berhad
  • AmInvestment Bank Berhad
  • AU Synergy Sdn. Bhd.
  • CIMB Bank Berhad
  • Malayan Banking Berhad
  • Malaysia Steel Works (KL) Berhad
  • MIDF Amanah Investment Bank Berhad
  • Permodalan Nasional Berhad
  • Pet Far Eastern (M) Sdn. Bhd.
  • Petroliam Nasional Berhad (PETRONAS)
  • Press Metal Aluminium Holdings Berhad
  • Telekom Malaysia Berhad
  • Yinson Holdings Berhad

To ensure proper governance during price discovery, Bursa Malaysia did not participate in the bidding process but purchased carbon credits only at the auction clearing price. The carbon credits from both projects, were supplied by Vitol Asia Pte Ltd.

By establishing a market-based price for carbon credits, the auction provides a clear signal to potential project proponents and developers on the economic viability of carbon credits. This will incentivise local project owners to develop carbon credit projects that can make a real impact in the fight against climate change.

This auction will be the first step towards facilitating the acceleration of Corporate Malaysia’s pivot towards a green economy and meeting global demands for a sustainable supply chain. Bursa Carbon Exchange will continue to expand its product offerings in the voluntary carbon credit market by accelerating the development of a healthy pipeline of carbon offset projects via a series of awareness and capacity building programmes drawing on the expertise of local and international VCM practitioners. The Exchange will also facilitate engagements between the public and private sectors towards developing conducive policies to support the emerging VCM industry and market.

Click here for the press release.

Project Name: Linshu Biogas Recovery And Power Generation Project
Contract Type: Global Technology-Based Contract (GTC)
Location: Linshu Town, Shandong Province, China
Volume: 50,000 Contracts
Reserve Price MYR/ Contract: RM 18.50
Project Type: Waste Handling and Disposal (Wastewater Treatment)
Vintage: 2019-2020
Project ID: 2402

The Linshu Biogas Recovery and Power Generation Project recovers biogas from wastewater generated from the industrial production process. The electricity and steam generated by this project will be supplied to Jinyimeng company.

Prior to the project, the wastewater from alcohol production was treated through a series of deep open anaerobic lagoons without biogas recovery. The methane would have been released into the atmosphere. The equivalent electricity generated by the project would have otherwise been from North China Power Grid (NCPG) which is fossil fuel dominated. The equivalent heat of the project has otherwise been from coal boiler.

The project activity installs wastewater treatment equipment, biogas storage and purification equipment, biogas generators and waste heat boilers to utilize the biogas to generate electricity and heat. The electricity and heat generated is used by Jinyimeng, replacing energy generated from NCPG and coal boilers. Therefore, the project significantly reduces GHG emissions.

The total installed capacity of the project is 13.6MW, including six units of 1.2MW generators and four units of 1.6MW generators, and one unit of 1.2MW for backup. The wastewater treatment amount is about 10,000 m3/day, the inlet COD concentration of the anaerobic digester is 55,000 mg/L, and the outlet COD is 1,000 mg/L. The project owner only claims emission reductions from methane recovery and electricity generation. The annual emission reductions by methane avoidance are 290,883 tCO2e/year.

The annual average estimation of GHG emission reduction from the methane recovery and electricity generation in the first crediting period is about 359,691 tCO2e/year. The project started construction on 01/11/2018 and come into continuous operation on 20/09/2019.

Source: Adapted from Verra

Project Name: Southern Cardamom REDD+ Project
Contract Type: Global Nature-Based Plus Carbon Contract (GNC+)
Location: Koh Kong, Cambodia
Volume: 100,000 Contracts
Reserve Price MYR/ Contract: RM 68.00
Project Type: Agriculture Forestry and Other Land Use

Vintage: 2021
Project ID: 1748

The Southern Cardamom REDD+ Project (SCRP) is an initiative designed to promote climate change mitigation and adaptation, maintain biodiversity and create alternative livelihoods under the United Nations scheme of Reducing Emissions from Deforestation and forest Degradation (REDD+). The 445,339 ha SCRP encompasses parts of Southern Cardamom National Park and Tatai Wildlife Sanctuary and will protect a critical part of the Cardamom Mountains Rainforest Ecoregion – one of the 200 most important locations for biodiversity conservation on the planet.

The project will directly support the livelihoods of 21 villages in nine communes around the perimeter of the project area. Eight additional villages in four communes are eligible to receive educational scholarships. These communities represent approximately 3,957 families and 16,495 individuals. The project’s climate benefits include the avoided emission of approximately 12 million tCO2e during this first monitoring period and over 115,000 million tCO2e over the lifetime of the project. The project will generate substantial community and biodiversity co-benefits. New and sustainable livelihood opportunities, such as direct employment, alternative income-generating activities (IGAs) and initiatives to stimulate investment in businesses will be designed to reduce pressure on the environment while significantly increasing community well-being.

Additional programs will address food security, improve health and education facilities, as well as raise environmental awareness. Biodiversity co-benefits will be achieved through greater protection of the ecosystem predominantly by means of increased security and improved monitoring. The Project will also be protecting critical habitat for significant populations of many International Union for Conservation of Nature (IUCN) listed species, including Asian elephant, Asiatic black bear, sun bear, large spotted civet, clouded leopard, and dhole, as well as the critically endangered reptiles Siamese crocodile and Southern river terrapin.

Source: Adapted from Verra