Today is Monday, 12 August 2024.
This week we will have a series of posts related to some carbon markets in Asia. We start with Malaysia, after our participation in the “Malaysia Carbon Market Forum 2024: Empowering Climate Actions through Carbon Markets” last week, in partnership with IETA, International Emissions Trading Association. (spoiler: do not miss the last paragraph, an updated roadmap to carbon markets).
With a population of 34 million inhabitants, Malaysia is slightly larger than Italy.
The country is a member of Organization of the Petroleum Exporting Countries Plus (OPEC+), group that represents around 40% of world oil production.
The Malaysian multinational oil and gas company Petronas has been one of the pioneers in cross-border carbon capture and storage (CCS) deals, namely with significant Japanese and South Korean companies. Check this article from August 2022, “CCS: Petronas advances carbon capture and storage ambitions”.
Its CCS potential was reinforced by BloombergNEF in 2023, quoting Malaysia and Australia after United States, the leader in terms of CCS investments.
Besides that, according to McKinsey Nature Analytics, Malaysia is ranked 7th in the World in terms of carbon crediting NBS potential. Here is what the same source indicates about the share of potential low-cost nature-based solutions (%):
Brazil and Indonesia, 15% each
Democratic Republic of Congo 5%
Peru 4%
Malaysia, Russia, United States, Papua New Guinea, Bolivia, 3% each
Venezuela, 2%
Rest of the World, remaining 44%
Refer to “Look to the trees: How carbon markets can help countries achieve their climate targets” for more details.
In terms of Carbon Credit Markets, here are two milestones for Malaysia:
When BCX was launched, several options for carbon crediting projects were indicated:
Technology-based: Renewable energy, Energy Efficiency, Waste Disposal, Industrial Gases, Household Devices, Transport, Tech-based Removals
Nature-based: Agriculture/Soil Carbon, Forestry, Other Land Use, Blue Carbon
Click at the image below for the press release from 25 July 2024 about BCX’s first auction on MNC+, cleared at RM50 (US$ 11) per contract. As you will see, the carbon credits from the Kuamut Rainforest Conservation Project were rated by BeZero Carbon.
Last but not least, these important quotes from the same press release:
“Given the complexity of some carbon project implementation compared to renewable energy projects, the carbon market can face a longer lead time to reach the same stage of growth as RECs market, especially when nature-based projects are involved … A critical step to accelerate the development of domestic carbon projects is to adopt some form of compliance carbon market … This resonates with the recent calls made by several ministries and industry players, especially those that will be impacted by the European Union’s implementation of Cross Border Adjustment Mechanism (CBAM), that there is a need for the country to implement a compliance carbon pricing instrument to ensure sustainable demand and pricing for domestic carbon credits”.
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