KUALA LUMPUR: The federal government will ensure that the sale of carbon credits abroad does not undermine Malaysia’s achievement of its nationally determined contribution (NDC) targets, the Dewan Rakyat was told today.
Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad said that this measure aims to ensure Malaysia’s NDC goal of reducing carbon emissions intensity across the economy by 45 per cent by 2030 is met.
“At the same time, to encourage and support carbon generation initiatives from the forestry sector, the ministry has established the Malaysia Forest Fund (MFF) as the entity responsible for implementing efforts and innovative financial strategies for the forestry sector and we have seen that carbon credits have started to be traded on the platform Bursa Carbon Exchange (BCX) and the Kuamut Project in Sabah.
“We have appointed MFF as the implementing agency under the Forest Carbon Project Development Fund of RM5 million in 2024 to support the activities carried out by the state governments,“ he said.
He said this in his reply to a question from Datuk Mohd Shahar Abdullah (BN-Paya Besar) who wanted to know the action taken by the ministry regarding the federal-state coordination in generating carbon credits from Malaysian forests
On May 20, the inaugural auction of Malaysian Renewable Energy Certificates (RECs) and carbon credits on the BCX provided opportunities for the corporate sector to showcase their climate actions by efficiently allocating capital to support forest conservation and restoration efforts and low-carbon technologies.
Nik Nazmi highlighted that carbon credits and RECs have the potential to stimulate the development of low-carbon projects to support Malaysia’s goal to achieve a 45 per cent reduction in emissions intensity by 2030, based on gross domestic product levels in 2005, as outlined in Malaysia’s NDCs.
In his reply to Mohd Shahar’s supplementary question about the government’s efforts to ensure that the carbon market mechanism is strengthened, especially in the forestry sector, Nik Nazmi said the government through the Ministry of Finance is holding discussions with the World Bank to explore the feasibility of implementing a carbon tax in Malaysia.
“The discussion is ongoing and this is one of the things that need to be taken into account in the process of drafting the National Climate Change Bill, and I believe that if there is such a framework, the price (carbon market) is better than what we have in the market now which are currently relatively low,” he added.
