Bursa Malaysia ( BM ), the Malaysian stock exchange, will open a voluntary carbon market ( VCM ) exchange later this year, enabling companies to purchase voluntary carbon credits from climate friendly projects and solutions.

BM intends to offer standardized carbon credit products for trading via a rules-based VCM exchange, with distinct product categories for carbon credits derived from nature-based solutions and technologies that reduce or remove carbon emissions.

The VCM exchange will aggregate carbon credits that share similar traits and fundamentals, with vintages 2016 onwards, and will label products to differentiate between carbon credits sourced in Malaysia and those sourced globally.

Participation in the proposed VCM exchange will allow companies to offset their carbon emission footprint and meet their voluntary climate goals. Through the exchange, both buyers and suppliers will be able to transact high-quality carbon credits at transparent prices.

By year end, BM expects a supply of carbon credits to be sold by way of auction to interested buyers. The auction will enable price discovery for the new standardized carbon credit products that will be listed on the VCM exchange.

To counteract greenwashing claims and underpin the integrity of carbon credits offered through the exchange, BM says it will adopt the Verified Carbon Standard, or Verra, a widely recognized standard in the voluntary carbon market that currently accounts for nearly 70% of voluntary carbon credit issuances globally.

“With better understanding of carbon credit origination and listing processes, stakeholders will be able to develop capacities to be part of the carbon credit supply chain,” says Umar Swift, BM’s chief executive officer. “This will also help the industry to use the VCM to reduce their carbon footprint.”