Malaysian Exchange Launches First Shariah Compliant Carbon Exchange

Bursa Malaysia Berhad announced the launch of Malaysia’s pioneer voluntary carbon market with the introduction of the Bursa Carbon Exchange (BCX) at an event officiated by the Minister of Natural Resources, Environment & Climate Change, YB Tuan Nik Nazmi Nik Ahmad.

The BCX is the first Shariah-compliant carbon exchange in the world, diversifying the product universe for ESG and Shariah-compliant products.

The objective of the BCX is to enable companies to trade voluntary carbon credits from climate-friendly projects and solutions, with the aim to offset their emission footprint and meet climate goals.

The BCX will support Malaysia’s ambition to achieve its target of net zero greenhouse gas emissions (GHG) by 2050 while accelerating corporate Malaysia’s pivot towards a green economy and meeting global demands for a sustainable supply chain.

Abdul Wahid Omar, Chairman of Bursa Malaysia Berhad said the launch of BCX is momentous as it will play a significant role in supporting the nation’s voluntary carbon market ecosystem.

The BCX Rules, auction terms and conditions, online module and operational processes have been finalised. Projects permitted to be traded include Nature-based solutions or Technology-based solutions, which result in avoidance, reduction or removal of GHG emissions.

The first trades will be conducted via an auction which will facilitate price discovery for the new standardised carbon credit products listed on BCX. The first trade via auction is expected to commence in March 2023.

“The launch of the Bursa Carbon Exchange is timely given the growing impact of global warming, and the important role voluntary carbon markets will play to support financing for climate-friendly projects and solutions. Both buyers and suppliers will now be able to transact high-quality carbon credits and use them to offset their existing climate impact alongside their other internal carbon reduction initiatives”, said Muhamad Umar Swift, CEO of Bursa Malaysia Berhad.

“The BCX will make carbon trading a more inclusive ecosystem, allowing more market participants to engage with clients looking for ESG as well as Shariah-compliant related solutions. Therefore, I would strongly urge all market participants to join us in this journey,” he added. “As we get closer to the auction day, we encourage all corporates to join those that have already registered their interest in this new carbon marketplace.”

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