Malaysia approves Domestic Carbon Trading Market

A domestic emissions trading scheme (DETS) will be developed by the Environment and Water Ministry (KASA) to serve as a catalyst for the country’s carbon trading sector.

Its minister, DS Tuan Ibrahim Tuan Man, said its development would be carried out jointly with the Finance Ministry, Bursa Malaysia and other stakeholders to enhance the capabilities of industry players in producing products and services that are competitive at the international level.

Read the Official Statement here: Malaysia Approves Domestic Carbon Trading Market

What does this mean for Malaysian companies?

I’m still learning more about this and so far it is an encouraging step. I feel like it’s largely a reaction to international markets discouraging trade with countries that don’t have effective carbon pricing mechanisms.

I hope for Malaysia to introduce a carbon tax next or a cap-and-trade system (slim chance?) or the DETS may just be a “nice to have” instead of an integral part of our financial system.

How does it affect our current climate issues locally?

I am hopeful this will encourage keeping forests and peatlands intact IF there will be a close-to-home tool for carbon trading in nature-based solutions.

Does this mean more transparency?

Either way, to remain competitive in the international sphere, Malaysia will have to progress in their climate change agenda – just how quickly or effectively is the question.

What do you think about the DETS announcement?


Still need more information?

In understanding more about this topic, I found this article very insightful, The merits of Singapore’s new carbon trading marketplace. This piece helped me understand the role a domestic carbon trading market plays because our neighbour Singapore is setting one up too! They’ve already introduced a carbon tax since 2019, we’re just playing catch up.

This is also another great resource to read up on voluntary carbon markets.  SPGlobal: Voluntary carbon markets: how they work, how they’re priced and who’s involved


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