KUALA LUMPUR: Malaysia expects the compliance carbon market mechanism under Article 6 of the Paris Agreement to become operational as early as next year.
Deputy Natural Resources and Environmental Sustainability Minister Datuk Seri Huang Tiong Sii said this supports the country’s commitment to reducing greenhouse gas emissions.
He said the two main mechanisms being developed are the bilateral cooperation approach under Article 6.2 and the UNFCCC-managed Paris Agreement Crediting Mechanism under Article 6.4.
The implementation of these mechanisms will enable carbon projects in Malaysia to contribute to reducing GHG emissions.
These projects will also strengthen local technological capabilities and create green job opportunities.
The ministry is currently finalising the National Carbon Market Policy which outlines the framework for implementing Articles 6.2 and 6.4.
This policy also supports the establishment of a voluntary carbon market under the Bursa Carbon Exchange launched in September 2023.
The government is considering project applications under the Clean Development Mechanism to be aligned with the Article 6.4 compliance market mechanism.
Malaysia has signed two memoranda of understanding for bilateral cooperation under Article 6.2 with the Republic of Korea and Singapore.
Through these MoUs, both countries will be able to invest in the implementation of carbon projects in Malaysia.
Several technical components under Article 6.4 are currently being developed including the establishment of a regulatory body.
Other components being developed include the formulation of baseline guidelines for carbon sequestration methodologies and activities.
A temporary registry to record carbon activities and transactions is also being created.
Technical elements such as specific methodologies and a complete registry have yet to be finalised.
Carbon credits are not being officially issued until these technical elements are completed.
The participation of local companies in the carbon market is expected to become more active once the proposed national climate change bill is implemented.
This bill will outline the procedures for participation in the carbon market under Article 6.
The Malaysia Forest Fund was established to promote the development of forest-based carbon projects.
This fund will facilitate the implementation of carbon projects by local companies. – Bernama
