The Kuamut Rainforest Project in Sabah, Malaysia. (Photo: Wikimedia Commons)
It will take some time for Sabah to realize the tangible benefits from trading its first carbon credits from the state rainforest, said state Finance Minister Masidi Manjun. He also mentioned that Sabah is reviewing existing laws to ensure it doesn't lose out in the country’s first carbon credits auction.
He was responding to the announcement that the Bursa Carbon Exchange (BCX) will hold an auction of its first Malaysian carbon credits from the Kuamut rainforest conservation project on July 25.
The BCX, the world's first Shariah-compliant carbon exchange, was launched in December 2022 to increase transparency and enable companies to purchase carbon credits to offset greenhouse gas emissions. It completed its first carbon credit auction in March last year.
The project, located in the Tongod and Kinabatangan districts of Sabah, aims to conserve and rehabilitate 83,381 hectares of tropical forest.
In March, the project achieved its first issuance of Verified Carbon Units (VCUs) under Verra's Verified Carbon Standard (VCS), leading to an estimated annual reduction of 800,000 tons of tCO2e.
The initiative involves collaboration between the Sabah Forestry Department, Rakyat Berjaya Sdn Bhd, Yayasan Sabah, and Permian Malaysia, the project lead.
Non-governmental organizations such as PACOS Trust and the Southeast Asia Rainforest Research Partnership (SEARRP) will be backing the project.
Launched in December 2022, the BCX is the world's first Shariah-compliant carbon exchange, intended to enhance transparency and allow companies to buy carbon credits to offset their greenhouse gas emissions. (Photo: BCX)
"It is new in Sabah, but carbon trading is prevalent worldwide. It will take us some time to thoroughly evaluate and determine the tangible benefits we can gain," Masidi said.
When asked whether Sabah would follow Sarawak in enacting laws related to carbon trading, he said that for now, existing laws have been applied to carbon trading, "We just have to strengthen the existing laws to ensure Sabah continues to have control over forest resources related to carbon credits."
Sarawak passed the Environment Reduction of Greenhouse Gases Emission Ordinance 2023 in last November. The law aims to promote carbon capture and storage, alleviate the effects of climate change, and offer opportunities for locals to participate in global warming mitigation projects and earn carbon credits for their efforts.
Abang Johari, the Sarawak Premier, advocates for establishing parameters and legislation for carbon trading at the federal level.
