Monday, May 14, 2012

Carbon Credit


Malaysia Has Huge Reserve of Carbon Credits

Carbon credits
are awarded to projects in a country by Designated Operational Entity
( DOE ) after grilling through the stringent and complex procedures
adopted by the UNFCCC to be certified ( called CERs) as having reducing a real and quantifiable amount of greenhouse gas
( GHG ).
They are issued as incentives of the market-based Clean Development Mechanism
( CDM ) of the Kyoto Protocol. Carbon credits are tradable equities in global climate exchanges just as securities and commodities in the stock markets.
Each CER is equivalent to one tonne of carbon dioxide being prevented from emissions into the atmosphere.

Asia emerging as center of carbon trade program

Global carbon credit trading may grow to US$1 trillion in a decade.
To date, the single largest bilateral and unilateral carbon market exists in Asia, with China and India leading the queue. Indonesia and Malaysia are emerging significantly in the oil palm, cement, biogas and biofuel sectors.

Expected Average Annual CERs from Registered Projects
by Country 2008  (Chart: UNFCCC)
Carbon credit is a relatively new business, but the Malaysians have something to be proud of. It is the first in the world to be awarded CERs by the United Nation Executive Board of CDM via a biomass project in Sabah. Malaysia's corporate sectors including palm oil, agriculture, transportation, manufacturing, oil and gas, and the wastewater sectors have been proactive to capitalize on CDM participation, thus being able to reap early birds' returns.



  Number of CDM projects in Asia by country (UNEP - as of Mar 01 2009)   Volume of CERs until 2012
in Asia by country

According to Malaysia Energy Centre ( PTM ), agricultural and natural resources-rich Malaysia has 100 million tonnes of carbon credit, which can be translated into some RM5 billion in revenue. CDM related carbon trading in Malaysia is expected to surge in the next few years from demands by European Unions to meet target reductions by 2012.
The Malaysia government has been very supportive and instrumental in the CDM participation. It has established the machinery and mechanisms for smooth implementation to tackle the greenhouse gas emissions, and the promotion of the carbon trading in the country. The Budget 2008 grants an additional 10 years pioneer status companies involved in energy conservation, and giving 3 years tax exemption for income derived from the trading of carbon credits.
Climate change issue is high on the international agenda. Global warming is a reality. It is everybody's concern. Participation in the CDM is very encouraging from all eligible sectors. While engaging in sustainable, cleaner and greener scheme, corporate entities not only derive extra revenue, but also exercise good corporate responsibility in sharing the global effort to mitigate climate change.
Project types include biomass energy from palm oil waste; biogas flaring and generation of biogas power, energy efficiency; landfills and wastewater treatment; composting of solid biomass waste from the palm oil mill; hydroelectricity generation from river; biomass-based cogeneration of power ...etc.
As on March 0, 2009, there are total of 4660 CDM projects in the pipelines, released by United Nations Environment Programme (UNEP) Risoe Center. Malaysia has 156 projects or 3.3% in this list.

References and related news:

CDM Projects:
Malaysian Energy Center: PTM
CDM Interactive Project Cycle: CDM.eib
5 More Years for Malaysia to Realize Full Potential in Carbon
Natural Rubber to Join Carbon Credit System