Carbon trading legislation in place; ETS in few years

KUCHING: Sarawak has become the first in the region to have legislation regulating carbon trading, including issuance of licences and permits to enable related activities to be carried out in the state.
Energy and Environmental Sustainability Deputy Minister Dr Hazland Abang Hipni said carbon trading licences can only be issued to alienated land owners – be it an individual or a company, Native Customary Rights (NCR) land gazetted under Section 6 as well as state land.
For state land, he said, it will be managed by government-linked companies (GLCs) to do carbon trading for the Sarawak government.
“We only issue licences to these categories. In addition, there are other rules and regulations which need to be complied with as well. This is because we want to avoid all the possible problems which may arise in the long run,” he said.
Carbon trading, he said, can be done in two ways; namely compliance carbon markets and voluntary carbon markets.
Carbon markets are created and regulated by mandatory carbon reduction regimes in certain countries, whereas the voluntary carbon market enables companies to purchase carbon credits on a voluntary basis.
“One of the main challenges in the voluntary carbon markets now is the lack of proper mechanism, where it is difficult for companies to know how much emissions they are reducing,” he said at the Sustainability (ESG) Accelerator Training Programme held here Tuesday.
As for the compliance (carbon market), he said, Sarawak or Malaysia is unable to do so as the country does not have the emissions trading system (ETS) – a system being used in Europe as well as China, Korea and Australia, where the carbon credit prices are largely driven or controlled by government policy.
“The price of carbon credit under such a system can be as high as USD120 per tonne compared to USD8 per tonne on the voluntary carbon markets. As voluntary means doing it voluntarily – between willing seller and willing buyer – thus, the price is lower,” he explained.
The ETS, he believed, is a good mechanism to reduce or control greenhouse gas emissions by industries, in the effort to combat climate change in the future.
“But, it will take us a few more years to reach there (to have such a system) as it also depends on the neighbouring countries such as Indonesia and Philippines,” he added.
Sarawak, he said, has a total of 1,665 depleted oil wells with a potential capacity of 9 billion tonnes of carbon storage.
In addition, Sarawak has 62 per cent of its landmass, or approximately 7.65 million hectares under forest cover, which is estimated to be able to provide between 750 million to 1 billion tonnes of carbon storage.
Also present at the event were Director of Chemsain Group of Companies Dr John Chan, Director of Chemsain Konsultant Sdn Bhd Brian Chong and CEO of Sunway Education Group Prof Datuk Elizabeth Lee.
The training programme jointly developed by Chemsain HRD Sdn Bhd (CHRD) the training and capacity building arm of the Chemsain Group of Companies and Sunway University (Sunway) drew a crowd of around 150 delegates from both the public and private sector.
At the end of the launch ceremony CHRD and Sunway presented a cheque donation of RM5,000 to Heart Treasures to support the social enterprise that provides a ‘dignity-for-life’ transformation to young people with physical and intellectual disabilities.