Bursa Carbon Exchange (“BCX”), a wholly-owned subsidiary of Bursa Malaysia Berhad (“Bursa Malaysia”), will be hosting its inaugural renewable energy certificates (RECs) auction on 25 June 2024. This auction marks a significant step towards the transition of BCX to be a one-stop, Shariah-compliant, multi-environmental product exchange.
RECs is a new product offering by BCX, that first started enabling the trading of carbon credits in September 2023. This underscores Bursa Malaysia’s progress as a multi-asset exchange in democratising access to and creating new opportunities for the market through additional types of asset classes, investment and trading choices.
For the auction, Sarawak Energy Berhad (“Sarawak Energy”) will supply the RECs from its Murum hydropower plant. This is part of the memorandum of collaboration (“MoC”) that Bursa Malaysia had signed with Sarawak Energy together with Hydropower Sustainability Alliance (“HSA”) and the I-REC Standard Foundation (“I-REC Standard”) during the 28th United Nations Climate Change Conference of Parties (“COP28”) in December 2023. Sarawak Energy is Sarawak’s electricity utility which is at the forefront of championing the state’s energy transition agenda. The RECs will be issued under the I-REC Standard, a globally recognised standard body, which is renowned for their robust environmental attribute tracking system.
According to Datuk Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia, “As sustainability becomes an intrinsic necessity for Malaysia to stay relevant and investable as a nation, Bursa Malaysia continues to play a pivotal role in enabling the nation’s implementation of policies and key projects through the capital market. RECs will support Malaysia’s energy transition roadmap (NETR) which targets to substantially increase the country’s renewable energy capacity. We are pleased to collaborate with Sarawak Energy for our inaugural RECs offering.”
He further elaborated on the significance for BCX. “Within a few months of starting carbon trading, we have been quick to expand BCX offerings to offer another complementary product in the form of RECs. These two environmental products will serve to provide Malaysian corporates choices when allocating capital for climate action financing.”
A briefing on the inaugural RECs auction will be held on 23 April 2024. Those interested can register at https://bcx.bursamalaysia.com/web/auctiondetails or call BCX at +603 2034 7788. The BCX platform will be ready for continuous trading which includes facilitating of off-market transactions for RECs by end of September 2024.
