KOTA KINABALU: It will take some time for Sabah to see the tangible benefits from the trading of its first carbon credits from the state rainforest, said state Finance Minister Datuk Seri Masidi Manjun.
He was commenting on the announcement that the Bursa Carbon Exchange (BCX) will host an auction of its first Malaysian carbon credits from the Kuamut rainforest conservation project on June 25.
Located in the Tongod and Kinabatangan districts of Sabah, the project aims to conserve and rehabilitate 83,381 hectares of tropical forest.
In March 2024, the project achieved its first issuance of Verified Carbon Units (VCUs) under Verra's Verified Carbon Standard (VCS), resulting in an estimated annual reduction of 800,000 tonnes of carbon dioxide equivalent (tCO2e).
The initiative involves collaboration between the Sabah Forestry Department, Rakyat Berjaya Sdn Bhd, Yayasan Sabah, and Permian Malaysia, the project lead. It has operational backing from Pacos Trust and the Southeast Asia Rainforest Research Partnership (SEARRP).
"We are aware of that development. It is new in Sabah, but carbon trading is prevalent worldwide. It will take us a little time to thoroughly evaluate and determine the tangible benefits we can gain," he told the media after witnessing the signing ceremony of the extension of the sales and purchase agreement between SMJ Energy and Shell International Eastern Trading Company at the Sabah International Convention Centre.
Meanwhile, when asked whether Sabah would follow Sarawak in enacting laws related to carbon trading, Masidi said that for now, existing laws have been applied to carbon trading.
"We just have to strengthen the existing laws to ensure Sabah continues to have control over forest resources related to carbon credits."
Last November, Sarawak passed the Environment (Reduction of Greenhouse Gas Emission) Bill, 2023. The law aims to promote carbon capture and storage, mitigate the effects of climate change, and provide opportunities for Sarawakians to participate in global warming mitigation projects and earn carbon credits for their efforts.
Sarawak Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg advocates for establishing parameters and legislation for carbon trading at the federal level.