Malaysia Has Huge Reserve of Carbon Credits
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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. |
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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.
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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.
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| Number of CDM projects in Asia by country (UNEP - as of Mar 01 2009) | Volume of CERs until 2012
in Asia by country (UNEP) |
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.
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