A NATIONAL carbon market policy is currently being developed, with engagements held with state governments and the private sector to facilitate its growth, says Nik Nazmi Nik Ahmad.

The Natural Resources and Environmental Sustainability (NRES) Minister said engagements have begun between the stakeholders and the ministry.

“NRES is developing a national carbon market policy and has initiated engagements with state governments.

“At the same time, this carbon market policy is also designed to facilitate the involvement of relevant stakeholders, whether state governments or the private sector, in the local carbon trading industry and to enable its expansion,” he told the Dewan Rakyat.

Nik Nazmi was responding to Datuk Mohd Shahar Abdullah (BN-Paya Besar) to state the actions taken by the ministry to coordinate the jurisdiction of the federal and state governments in the matter of generating carbon credits from Malaysian forests.

He said the government will provide ongoing support in terms of advice, technical assistance, training, as well as research and development in the forestry sector to state governments to continue supporting carbon trading initiatives and policies.

At the same time, Nik Nazmi said the ministry has created the Malaysia Forest Fund (MFF) as an entity responsible for implementing innovative financial efforts and strategies for the forestry sector.

“The Bursa Carbon Exchange (BCX) is starting to trade carbon credits, including those from the Kuamut project in Sabah.

“The ministry has also made MFF the implementing agency under the Forest Carbon Project Development Fund (amounting to RM5mil for 2024) to support activities undertaken by the state government,” he added.

Nik Nazmi said the government is reviewing the feasibility of implementing a carbon tax in the country as discussions are still ongoing between the Finance Ministry and the World Bank.

“The government, through the Finance Ministry, is in discussions with the World Bank to explore the feasibility of implementing a carbon tax in the country. These discussions are ongoing.

“For us, this is one of the factors being considered in the process of drafting the national climate change legislation currently underway.

“If we have such a framework, the pricing will be better compared to the current voluntary market reality, where prices are relatively low,” he said.

Nik Nazmi said this while responding to a supplementary question by Mohd Shahar.

https://www.thestar.com.my/news/nation/2024/07/03/development-of-national-carbon-market-policy-underway