Malaysia Launches First Shariah-compliant Carbon Exchange

Bursa Malaysia on Friday (9 December) announced the launch of its new voluntary carbon market (VCM), known as the Bursa Carbon Exchange (BCX).

"The BCX is the first Shariah-compliant carbon exchange in the world, diversifying the product universe for ESG and Shariah compliant products," Bursa Malaysia said in a statement. "The objective of the Bursa Carbon Exchange 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 GHG emissions by 2050, while accelerating corporate Malaysia's pivot towards a green economy and meeting global demands for a sustainable supply chain.

Under the BCX rules, 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 – expected to commence in March 2023 – will be conducted via an auction, to facilitate price discovery for the new standardised carbon credit products listed on BCX.

Source: Regulation Asia