Bursa Carbon Exchange (BCX), a wholly-owned subsidiary of Malaysian stock exchange Bursa Malaysia Berhad, has announced a strategic collaboration with the Malaysian Photovoltaic Industry Association (MPIA), marking a significant step in the enhancement of Malaysia’s voluntary renewable energy certificates (RECs) market.

The partnership, formalized through a memorandum of collaboration (MOC) signed during the MPIA Solar Roadshow 2024 on Tuesday, will focus on four key areas.

These include the joint promotion of solar RECs, enabling BCX to offer RECs trading to MPIA members, corporate entities and relevant stakeholders.

The partnership also aims to advance market integrity and awareness of RECs ecosystem, focusing on the appropriate usage of RECs and addressing concerns related to double claiming by corporates, including transparent reporting on solar energy claims.

Additionally, the partnership involves the exploration of potential solar RECs supply from MPIA members for the inaugural RECs auction, continuous trading and off-market transactions on BCX.

Lastly, the partnership will support the prospective development of an ASEAN voluntary RECs framework.

“The MOC with MPIA signifies our joint support in the implementation of the National Energy Transition Roadmap (NETR), and is a direct response to the growing corporate demand in Malaysia for RECs,” said Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia Berhad.

According to him, this is a crucial step forward in enriching the exchange’s offering with solar RECs, following its recent collaboration with Sarawak Energy Berhad to include their hydro RECs in its suite of RECs product.

“We are committed to establishing BCX as a one-stop Shariah-compliant environmental exchange with a suite of offerings, which aligns with Bursa Malaysia’s vision as a multi-asset exchange,” he added.

According to the statement, the collaboration between BCX and MPIA aims to establish a transparent, efficient and cost-effective market for REC transactions.

This will contribute towards realizing the NETR, where the renewable energy strategic development roadmap envisions a substantial increase in Malaysia’s RE capacity, targeting 70 percent of installed RE capacity in the power mix by 2050.

“We are thrilled with our collaboration with BCX, which provides a two-prong benefit, where we provide access to solar RECs for those who wish to be RE1001 affiliated to reduce their scope 2 electricity emissions while BCX provides opportunities to MPIA members to supply solar RECs, thereby generating additional avenue to improve the financial viability of their photovoltaic (PV) projects,” said MPIA President Davis Chong.

He said the association also believes that the offer of solar RECs on BCX will make renewable energy more accessible for corporations.

BCX, the world’s first Shariah-compliant carbon exchange, was established as a voluntary carbon market (VCM) initiative and this initiative was announced by the Malaysian government during the tabling of National Budget 2022.

BCX aims to democratise access to environmental products, thereby fostering a sustainable and resilient environmental products market.

MPIA, a non-profit entity, provides a credible and representative platform for the Malaysian solar industry, promoting the widespread adoption of solar energy.

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