Bursa Carbon Exchange Completes Its Inaugural Renewable Energy Certificates (RECS) Auction

• RECs generated from the Murum Hydroelectric Plant, Sarawak  
• 268,800 of HRECv24 Contracts were successfully cleared  
• Interest from 15 local buyers with strong representation from traders and financial institutions

Bursa Malaysia Berhad (“Bursa Malaysia” or the “Exchange”) announced that its subsidiary, Bursa Carbon Exchange (“BCX”), has successfully carried out its inaugural auction of renewable energy certificates (RECs) today. 

The online auction saw 15 buyers from various industries purchasing a total of 268,800 Hydropower Renewable Energy Certificates from vintage year 2024 (HRECv24) Contracts. HRECv24 are RECs offered by BCX that is generated from hydropower plants located in Malaysia with the vintage¹ year of 2024.

The RECs for this auction were generated from the Murum Hydroelectric Plant in Sarawak, which is developed and operated by Sarawak Energy Berhad (“Sarawak Energy”) - Malaysia’s largest renewable energy provider and developer. It represents the first large scale sustainable energy project with an installed capacity of 944MW. The HRECv24 Contracts were cleared at RM4.50 per Contract.

The RECs auctioned were issued with adherence to the International Attribute Tracking Standard owned by the I-TRACK Foundation (formerly known as I-REC Standard)². The BCX trading platform is also separately accredited under the I-TRACK Foundation, making BCX the first Malaysian trading platform operator, and one of only six globally, to be conferred this accreditation.

Results of the REC price discovery auction

The interest and healthy price signal shown by the domestic corporate sector, notably from traders and financial institutions, demonstrate the local market demand for a transparent pricing mechanism and enhanced accessibility to unbundled RECs. Of the 15 buyers, 13 of them are first time successful bidders in BCX’s auctions.

The successful 15 bidders³ at the auction were:

“We are pleased with the execution of our inaugural RECs auction, which is the direct outcome of the Memorandum of Collaboration signed with Sarawak Energy at COP28 in Dubai at the end of last year. The collaboration has quickly yielded meaningful outcomes - raising awareness level on RECs in the country, enhancing access, and promoting price discovery in the domestic RECs market. Next, in the fourth quarter of this year, BCX will be ready to offer RECs via continuous trading, and to facilitate off-market transactions,” said Datuk Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia.

“We are also excited about BCX’s upcoming auction on 25 July 2024, in which Malaysia will witness the offering of Malaysia’s first nature-based carbon credits, from the Kuamut Rainforest Conservation Project in Sabah. The two projects selected for BCX’s inaugural Malaysian RECs and nature-based carbon credit auctions are of national significance as these large-scaled projects are not easy to implement, and are instrumental in moving the climate agenda,” added Datuk Muhamad Umar. Both projects are from the heart of Borneo, a region endowed with natural resources, and have the potential to contribute significantly to the nation’s Net Zero goal.

1. Vintage refers to the year the electricity is generated by the renewable energy system. For example, a REC associated with the renewable generation of electricity by a hydro facility in 2024 will have a vintage year of 2024.
2. I-TRACK Foundation is a non-profit organisation based in Netherlands that provides a robust standard for developing attribute tracking systems for renewable energy. 
3. By decreasing volume