Bursa Malaysia’s Post

Could Malaysia's first internationally-traded forest-based carbon credits be the bright spark in the currently sluggish local carbon market? The Kuamut Rainforest Conservation Project, set to auction its credits on 25 July 25 2024 is generating significant interest and optimism. In a recent piece with Eco-Business, Andy Yap, Carbon Markets Lead for South and Southeast Asia, and Alexander Cox, Head of Climate Markets at ERM, shared their observations on the sidelines of the Argus Media Asia Carbon Conference in KL last month. Key Insights from Andy Yap: - Community and Biodiversity Co-Benefits: "One cannot underestimate the importance of how this first locally originated project significantly reduces jurisdictional risks and issues of transparency or lack of trust." - High External Rating: The project’s high rating from independent agencies and verification under Verra's standards enhances its value. - Jurisdictional Advantage: Local origin significantly reduces risks and enhances transparency. Global Perspective from Alexander Cox: - Quality Attracts Higher Prices: "If suppliers can prove a higher quality product, they can command higher prices." - Market Challenges: "The problem we’ve seen is that the price is so low that often it’s causing stress among developers as well as participants." - Opportunities in a Corrective Phase: Despite the market's slowdown, tightening standards will create better opportunities for high-quality projects to thrive. We are grateful for the opportunity to be part of this timely conversation on the future of Malaysia's carbon credit market. A big thanks to Samantha Ho, Eco-Business, and ERM's Ee Mun Aw for working with us on this story. #BCX #carboncredits #carbonmarket #malaysia #kuamutproject #ERM #EcoBusiness #naturebasedcarbonproject

Seizing the Opportunity: From Trees to Carbon Credits – Bhutan’s Environmental Imperative and Sustainable Development Bhutan's environmental initiatives highlight the significant impact of proactive strategies on sustainable development, driven by the visionary leadership of His Majesty the King and the support of the Desuups. Over the past three years, Bhutan has launched a major afforestation campaign, planting over three million fruit trees. This effort not only promises future food security and economic benefits but also plays a crucial role in carbon sequestration, mitigating climate change through CO2 absorption. Accurate data collection is vital to quantify the carbon credits generated from these activities. The initial geocoding of each tree was a solid beginning, and continued precision in data collection will allow Bhutan to measure the impact on CO2 reduction and secure carbon credits effectively. Annually, on June 2nd, Bhutan's Forestry Day emphasizes the nation’s commitment to environmental conservation and greenhouse gas reduction, underscoring the need for systematic and transparent accounting mechanisms to assess CO2 reduction contributions. Bhutan's hydropower sector, a significant part of the economy, produces clean, renewable energy, contributing substantially to carbon emission reductions. It is essential to formally account for and potentially trade the carbon credits from this green energy. Integrating carbon credit generation and trading into planning for alternative renewable energy sources like solar farms is also crucial. However, environmental initiatives must consider the ecological balance and socio-economic needs, such as ensuring that solar panels do not limit grasslands needed by livestock, which supports nomadic livelihoods. Bhutan's leadership in environmental conservation is bolstered by the unity and trust among the King, government, and people, creating a strong, unified vision. At this critical juncture, resilience, flexibility, and agility are essential. The current opportunity to advance environmental conservation and sustainable development is unparalleled, with the potential consequences of inaction being severe. Leveraging collective commitment and strategic leadership, Bhutan is well-positioned to achieve significant progress in sustainability. The path chosen today will shape the legacy for future generations, emphasizing the urgent need for decisive action. This moment is crucial; there is no room for hesitation. Bhutan must act now to ensure a sustainable future, maintaining harmony with nature and securing the nation's prosperity.

As the world faces unprecedented environmental challenges, investing in natural capital has emerged as a critical priority, evolving into a distinct asset class. This investment sector, historically linked to agriculture, timber, mining, and ocean-related activities, now shifts focus towards sustainability with revenue streams like carbon credits, biodiversity benefits, and conservation easements. Natural capital includes the planet’s resources—land, air, water, soil, minerals and organisms—playing a vital role in enhancing environmental and social benefits while mitigating land use damage. Despite its importance, only 0.2% of global assets are allocated to natural capital, significantly below what is required according to the UNEP-WCMC, which estimates a need to double investments into protecting our natural world. Fortunately, the investment landscape is evolving rapidly, with more than 50 asset management firms active in natural capital, often running multiple strategies: forestry/timberland funds, agriculture funds or, more recently, nature-based solutions. Investors searching for natural capital strategies can involve different return strategies: some will seek stable cash flows, others high annualised returns or capital preservation. Nature-based solutions are projects that protect and restore nature to reduce GHG emissions, store carbon and produce returns through carbon credits. However, the speculative nature of future carbon credit pricing presents both risks and opportunities. To mitigate these, NatureRe Capital AG leverages in-house expertise and external data for robust pricing analysis, ensuring resilient investments. Predictions suggest the Voluntary Carbon Market to grow from USD 2 billion to USD 50 billion in 2030, driven by demand for high-quality carbon credits (Taskforce on Scaling Voluntary Carbon Markets). Currently, 32 funds are aiming to secure 19 billion dollars in equity commitments, with 16% of these funds focusing exclusively on generating returns from carbon revenues. Asset managers often emphasise their commitment to producing high-quality credits, which only make up 10% of projects, and are expected to fetch higher prices in the future (Carbon Direct). NatureRe Capital AG, focuses on nature-based solutions that not only remove carbon but restore ecosystems and address water security and human wellbeing, engaging local communities to enhance project quality and sustainability. We believe that restoring ecosystems is not only a moral imperative but also a compelling business opportunity considering 50% of global economic output is moderately or highly dependent on natural capital (World Economic Forum). We bring together investors, corporate off-takers, and biodiversity experts to restore nature at scale and allow depleted land to regenerate, turning ecosystem regeneration into a high-yield business model. Join us and be part of the solution, invest in nature, restore biodiversity and remove carbon at scale. 

Natural resources Natural resources are substances or materials found in the environment that are valuable to humans for various purposes. These resources are classified into two main categories: renewable and non-renewable. 1. **Renewable Resources:** These are replenished naturally and are sustainable over the long term. Examples include sunlight, wind, water, and biomass. Renewable resources are crucial for ecological balance and are generally considered environmentally friendly. 2. **Non-Renewable Resources:** These resources are finite and cannot be replaced on a human timescale. Examples include fossil fuels (coal, oil, natural gas), minerals, and metals. The extraction and consumption of non-renewable resources raise concerns about environmental degradation and long-term sustainability. Key types of natural resources include: - **Water Resources:** Essential for human survival, agriculture, and industrial activities. Management of water resources is crucial to ensure availability and prevent overexploitation. - **Forest Resources:** Play a vital role in maintaining biodiversity, supporting ecosystems, and providing wood and other products. Sustainable forestry practices are essential for long-term resource availability. - **Mineral Resources:** Include metals (iron, copper, gold) and non-metals (salt, gypsum). Extraction of minerals is critical for industrial processes and infrastructure development. - **Energy Resources:** Range from traditional sources like fossil fuels to renewable sources such as solar, wind, and hydropower. Balancing energy needs with environmental sustainability is a global challenge. - **Land Resources:** Used for agriculture, urbanization, and various human activities. Sustainable land management is essential to prevent soil degradation and loss of biodiversity. Effective management and conservation of natural resources are crucial for sustainable development. This involves adopting practices that balance human needs with environmental protection, considering the long-term impact on ecosystems and biodiversity. International cooperation is often necessary to address issues related to the equitable distribution and use of global natural resources. #snsinstitutions #snsdesignthinkers #designthinking

Study published in Nature finds causal relation of REDD project to reduce deforestation by 30% through systematic testing of comparable sites without intervention (Adapted from Quantum Commodity Intelligence): A study, authored by Mandy Malan et al. and published in the Nature Sustainability journal last month, conducted a causal impact assessment of the Gola REDD+ project in Sierra registered under Verra’s Verified Carbon Standard (VCS1201) to assess its environmental and socio-economic impacts five years after implementation.  https://lnkd.in/gSsKQ_bw The study found that the scheme has reduced deforestation by 30% in targeted communities, “which equates to avoiding the loss of 929 hectares of forest on a yearly basis”, the author added. “This suggests not only that the project is delivering but that it is also relatively cost-effective in creating carbon savings,” Gsottbauer said. The assessment involved the collection of “multiple rounds” of household surveys and satellite data covering the 126 communities receiving project interventions, said Gsottbauer, one of the authors of the study. It also compared the communities that received interventions with 202 communities that did not “but were otherwise comparable in terms of their size, location or accessibility”. “Overall, our independent causal impact evaluation offers robust evidence that well-designed and implemented voluntary forest carbon projects can achieve meaningful environment benefits without hampering local economic incomes,” said Gsottbauer. “As voluntary carbon markets boom, ensuring that credible evidence underpins offset credits will require impact assessment processes that are both transparent and cost-effective to scale up," she explained, adding that "single evaluations like ours have value and offer a methodological way forward but their scope cannot match market growth.”

Study published in Nature finds causal relation of REDD project to reduce deforestation by 30% through systematic testing of comparable sites without intervention (Adapted from Quantum Commodity Intelligence): A study, authored by Mandy Malan et al. and published in the Nature Sustainability journal last month, conducted a causal impact assessment of the Gola REDD+ project in Sierra registered under Verra’s Verified Carbon Standard (VCS1201) to assess its environmental and socio-economic impacts five years after implementation.  https://lnkd.in/gSsKQ_bw The study found that the scheme has reduced deforestation by 30% in targeted communities, “which equates to avoiding the loss of 929 hectares of forest on a yearly basis”, the author added. “This suggests not only that the project is delivering but that it is also relatively cost-effective in creating carbon savings,” Gsottbauer said. The assessment involved the collection of “multiple rounds” of household surveys and satellite data covering the 126 communities receiving project interventions, said Gsottbauer, one of the authors of the study. It also compared the communities that received interventions with 202 communities that did not “but were otherwise comparable in terms of their size, location or accessibility”. “Overall, our independent causal impact evaluation offers robust evidence that well-designed and implemented voluntary forest carbon projects can achieve meaningful environment benefits without hampering local economic incomes,” said Gsottbauer. “As voluntary carbon markets boom, ensuring that credible evidence underpins offset credits will require impact assessment processes that are both transparent and cost-effective to scale up," she explained, adding that "single evaluations like ours have value and offer a methodological way forward but their scope cannot match market growth.”

Transaction announcement 🤝 3,000 metric tons on behalf of Boston Consulting Group (BCG) with Exomad Green (Biochar) At Carbonx Climate, our mission is to identify and drive investment to the most promising and scalable Carbon Removal initiatives. We are thrilled to share an update by solidifying our ongoing partnerships with Exomad Green and Boston Consulting Group (BCG), for whom we have facilitated the purchase of 3,000 tons of carbon removal, marking a significant stride in our collective mission. 🚀 Exomad Green is currently the largest producer of high quality biochar in the world. It transforms sustainable forestry residues into biochar. This product is then distributed to indigenous farming communities and medium-sized agricultural operations across the Bolivian lowlands. This initiative aims to rejuvenate degraded soils, thereby reducing deforestation driven by soil degradation near the country's most critical forests. “This collaboration with Carbonx, and BCG represents an important moment for Exomad Green, illustrating how impactful climate action is achievable through strategic alliances with significant market players. We are honored to contribute to this collective effort, eager to underscore the essential function of biochar in carbon capture, soil improvement, environmental justice, and deforestation reduction.” Diego Justiniano, CEO of Exomad Green "We are proud to partner with Exomad Green and Carbonx on this significant carbon removal initiative. Exomad's biochar production capabilities allow us to continue expanding our portfolio of carbon dioxide removals carbon credits. This collaboration reflects BCG's dedication to innovative and durable solutions to combat the climate crisis, our commitment to achieving net zero climate impact by 2030, and becoming climate positive thereafter.” David Webb, Chief Sustainability Officer of BCG “Following an in-depth technical and commercial review, Exomad's operational excellence and carbon integrity confirmed them as a great addition to BCG's portfolio, showcasing our shared commitment to permanent and climate-relevant solutions. Carbonx is equally thrilled about this partnership with BCG, as it strengthens our determination to drive scalable and sustainable environmental progress.” Paolo Piffaretti, CEO of Carbonx At Carbonx Climate, we have the privilege of working with leading CDR buyers in the industry and many high-impact carbon removal projects across a diverse spectrum of removal pathways. Together with our partners Exomad Green & Boston Consulting Group (BCG), we’re bringing carbon removal to climate relevance! 🌎 Stay tuned for more updates and communication from Carbonx #CDR #Biochar #PartnershipUpdate #ClimateAction #Exomad #BCGNetZero #Carbonx

This is an enlighting study. We have been concerned about the actual impact of REDD+ and Nature-Based Solution initiatives on real reduction or avoidance of deforestation. A case study shows that REDD+/NBS, when properly carried out, can indeed avoid deforestation.

It is a privilege to witness such meaningful partnerships unfold within the #CarbonRemoval space. This partnership between Exomad Green, Boston Consulting Group (BCG), and Carbonx Climate demonstrates our determination to foster collective effort and strategic alliances in driving critical climate action. Through partnerships like these, we are setting a precedent for future collaborations that aim at concrete, scalable solutions to combat climate change. Proud of what we achieved together and energised for what is to come. #ClimateAction #SustainableFuture #CollaborationForChange

♻️ Microsoft’s Brazil Plans: 8M Carbon Credits in Largest-Ever Sale 📈 Microsoft has announced the purchase of 8 million tons of carbon offsets to convert Brazilian farmland into forests, marking the world’s largest carbon removal credit transition. This investment, in collaboration with BTG Pactual's forestry arm, demonstrates a significant commitment to sustainability and ESG accountability. 🔍 Key Insights: 1️⃣ Largest Carbon Offset Deal: The deal, signed with BTG Pactual’s Timberland Investment Group, will use Verra’s Verified Carbon Standard. Half of the offsets will be dedicated to native species, while the other half will focus on eucalyptus for future timber production. The credits will be generated within two years, with the agreement running until 2043. 2️⃣ Strategic Investment: BTG manages over US $6.9 billion in forest assets across 3 million acres of timberland. The strategy aims to restore 135,000 hectares of natural forests and develop sustainable commercial tree farms on an additional 135,000 hectares in Brazil, Uruguay, and Chile. 3️⃣ Microsoft’s Net-Zero Goals: This transaction aligns with Microsoft’s ambitious goal to be carbon-neutral by 2030 and to remove all carbon emitted since its founding by 2050. The company achieved a 6% reduction in Scope 1 and 2 emissions from the 2020 baseline year and continues to focus on large-scale carbon removal projects. 🌿 Building a Sustainable Future: Institutional investors are critical in delivering nature-based solutions at scale. Microsoft’s investment in carbon offsets highlights the importance of sustainable forestry and reforestation in achieving global climate goals. 📅 Industry Context: The push for carbon offsets comes amid declining deforestation rates in Brazil and growing global demand for reforestation and afforestation. Microsoft’s whitepaper on the risks of carbon colonialism underscores the need for thoughtful project location and legal considerations. 🔗 Explore the complete analysis of Microsoft’s carbon credit transaction and its impact on the voluntary carbon market: https://lnkd.in/girKA35C 🗣️ #questionforgroup: How can large-scale carbon offset projects balance environmental goals with socio-economic considerations? Share your thoughts on the future of carbon markets and the role of corporate investments in driving sustainability. 💬 Join the conversation on the future of carbon markets, sustainable forestry, and the impact of corporate investments on achieving net-zero targets. #carbonoffsets #sustainability #microsoft #netzero #forestry #woodcentral #greenfinance #carboncredits #woodcentralau1 #esg #netzero2030 #brazil