Malaysia’s National Carbon Market Policy landed this week and it signals serious intent to join up substantial climate action with workable market infrastructure.
A few highlights I took from the launch this Tuesday, reading through the published document, and a brief conversation with Minister Dato Sri Arthur Joseph Kurup: the country’s net-zero target will be baked into the Long-Term Low Emissions Development Strategy, alignment of state and federal’s interest to ensure smooth interoperability, a dedicated body is being established to oversee the carbon market, and there was a clear signal that the National Carbon Market Policy will align Malaysia with Article 6 of the Paris Agreement.
The NCMP is an important and broad-ranging policy that positions Malaysia well to participate in international carbon markets. Facilitating cost-effective domestic action while using international mechanisms to tackle harder-to-abate emissions is sensible. The emphasis on environmental integrity, anti-greenwashing safeguards, and inclusive stakeholder engagement will help Malaysia build a carbon market that is robust, transparent, and internationally recognised.
For the voluntary carbon market and nature-based solutions sector, the policy will help to resolve uncertainties for investment. Project developers need clear rules on authorisation, corresponding adjustments, and how international and domestic and, importantly, how compliance and voluntary markets will coexist.
Significantly, the policy retains additionality as a criterion for any creditable project i.e. credits must represent reductions beyond regulatory or business-as-usual scenarios, while also recognising that carbon credit revenues are what make domestic conservation projects bankable in the first place. This is a policy-level acknowledgement of the counterfactual on which high-integrity forest projects are built: without the finance, the conservation does not happen. Taken together, these updates help position Malaysia to supply credits that buyers at the quality end of the market actively want while working to avoid the reputational problems that have damaged other jurisdictions.
The most important aspect of the NCMP is the Malaysian element of how its handling of federal–state coordination. Sabah and Sarawak have constitutional authority over land and forests, and any national carbon market that ignored that would be doomed to fail. The NCMP proposes a Federal–State coordination council, and anchors the Nature Based Carbon Offset in state-level forestry and land realities rather than imposing a federal template.
The policy also identifies what needs to be in place to make all this work i.e., legislation, governance structures, trained professionals, funding mechanisms, and public awareness. The NCMP is Malaysia’s blueprint for turning its climate targets into a functioning carbon market that attracts investment, drives emission reductions, and connects Malaysia to the growing global market for carbon credits.
For Permian Global and for the Kuamut Rainforest Conservation Project in Sabah, NCMP is fully supportive of the way we already operate. The project is a Class 1 Protection Forest Reserve under Sabah legislation, validated to Verra’s VCS and CCB standards, built on a Free, Prior and Informed Consent process with eight participating villages facilitated by PACOS Trust, and scientifically monitored in partnership with SEARRP. These are the components that the national policy now recognises as the norm rather than the exception.
For more news click HERE
The Kuamut Rainforest Conservation Project (project page) HERE