Tenaga Nasional considers carbon offsetting through Bursa Carbon Exchange

Tenaga Nasional (TNB), Malaysia’s multinational electricity company, is considering carbon trading through the Bursa Carbon Exchange (BCX) to meet its emissions targets, Megat Jalaluddin Megat Hassan, the chief strategy and ventures officer at TNB, told ISFI.

“Carbon trading mechanisms can be a part of the options for TNB to manage its carbon emissions depending on future scenarios…

“The carbon market is relatively new and at a nascent stage in this region, and most of the industry players, including TNB, in various economic sectors need more learning and experience in this space,” Megat shared.

The electricity company’s energy transition plan currently includes the option to offset its carbon emissions through purchasing carbon credits in addition to capturing and sequestering carbon emissions as well as prioritizing renewable energy expansion.

While open to participating in the voluntary carbon market (VCM), Megat opines that the BCX needs to enhance its market structure and product localization at this stage.

“More diversified and high-quality carbon credits, preferably generated from local projects, should be available on the marketplace which can help to boost credits availability and support local content,” Megat added.

According to Megat, TNB will closely follow the developments of the VCM and later determine how it can bring value to the market ecosystem as it can be a viable solution for it to offset its emissions.

The emphasis on local projects-generated carbon credits is in contrast with the BCX’s inaugural auction held in March this year following the launch of the exchange as the world’s first Shariah compliant VCM in December 2022.

The inaugural auction only featured foreign carbon projects despite the government’s RM10 million (US$2.2 million) seed funding incentive for Malaysia-generated carbon credits announced a week prior to the inaugural auction.

Bursa Malaysia did not respond to ISFI’s request for comment on the absence of local projects in the auction.

In the stock exchange’s own bid to assist Malaysian players in generating carbon credits in accordance with international standards, it signed a memorandum of collaboration with the Malaysian Green Technology and Climate Change Corporation to launch a national VCM handbook in October this year.

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