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Bursa Malaysia Sets Precedent With First Shariah-Compliant Carbon Market Exchange

Bursa Malaysia Berhad (“Bursa Malaysia”) has announced the launch of Malaysia’s pioneer voluntary carbon market, the Bursa Carbon Exchange (“BCX” or “Carbon Exchange”).

The first Shariah-compliant carbon exchange in the world, the BCX is poised 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.

Additionally, BCX has the potentially play a significant role in supporting the nation’s, and indeed the world’s, voluntary carbon market ecosystem by leveraging on Malaysia’s position as the global Islamic financial marketplace as well as being the world’s leading exchange for Islamic fund raising and investment.

“The launch of the Bursa Carbon Exchange is timely given the growing impact of global warming, and the important role voluntary carbon markets will play to support financing for climate-friendly projects and solutions,” said Datuk Muhamad Umar Swift, CEO of Bursa Malaysia Berhad.

Both buyers and suppliers will now be able to transact high-quality carbon credits and use them to offset their existing climate impact alongside their other internal carbon reduction initiatives.

“The BCX will make carbon trading a more inclusive ecosystem, allowing more market participants to engage with clients looking for ESG as well as Shariah compliant related solutions. Therefore, I would strongly urge all market participants to join us in this journey,” he added.

Bursa Malaysia is the first exchange in the world to receive a Shariah Pronouncement for its Carbon Exchange and the standardised carbon products that the Exchange will offer.

The first trades will be conducted via an auction which will facilitate price discovery for the new standardised carbon credit products listed on BCX. The first trade via auction is expected to commence in March 2023.

The BCX will support Malaysia’s ambition to achieve its target of net zero greenhouse gas (“GHG”) emissions by 2050, while accelerating Corporate Malaysia’s pivot towards a green economy and meeting global demands for a sustainable supply chain.


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