Bursa Malaysia’s Bursa Carbon Exchange (BCX) has taken the lead in pioneering the carbon credit market in Malaysia by launching continuous trading and facilitating off-market transactions of carbon credits. BCX, a subsidiary of the Bursa Malaysia stock exchange, began its operations on September 25.
The exchange aims to provide a platform for companies to trade carbon credits, encouraging carbon reduction initiatives and promoting sustainability.
Continuous trading entails participating in the immediate trading of regular contracts on the market. With this method, trading is ongoing and unrestricted for the duration of the trading day, allowing buyers and sellers to conduct transactions at any point during regular trading hours.
On the other hand, off-market transactions are those that are negotiated bilaterally between the buyer and seller. These transactions occur outside of the exchange platform and are usually facilitated after both parties have undergone an onboarding process with Bursa Malaysia.
The BCX offers two types of standardized contracts for trading. The first type is the global technology-based carbon contract, which involves technology-based greenhouse gas reduction projects. This contract focuses on projects that utilize technology and innovation to reduce carbon emissions and mitigate climate change.
The second type is the global nature-based plus carbon contract, which involves nature-based greenhouse gas reduction projects with co-benefits in the agriculture, forestry, and other land use sectors. This contract focuses on projects that promote sustainable land use practices, such as reforestation or sustainable agriculture, and result in both carbon reduction and additional socio-economic benefits.
The launch of Bursa Malaysia’s carbon credits trading platform showed promising signs of success from its very start, where participants from diverse sectors took part in the trading, including trading firm Vitol Asia and CIMB Bank. Within the first two days of trading, a total of 10 companies successfully transacted 16,500 Verra-registered carbon credits on the exchange.