‘Sarawak in good spot to supply quality carbon credits’

KUCHING (Feb 12): Sarawak is well placed to become a key supplier of high-integrity carbon credits in Asean as global demand rises from hard-to-abate sectors, said Malaysia Carbon Market Association (MCMA) president Dr Renard Siew.

Siew, who is also Yinson group head of corporate sustainability, said the state’s vast forest resources and renewable energy push give it a strategic edge especially at a time when industries face mounting pressure to secure high quality carbon credits to meet net-zero commitments.

He pointed out that the supply of carbon credit remains a major constraint. At present, he said, Malaysia has only one carbon credit project generating credits, which is the Kuamut Rainforest Conservation Project.

“Sarawak has so much potential to tap into. If it ramps this up, it could position itself not just as a forest carbon storage hub for Asean, but as a supplier of high-integrity carbon credits,” he said.

He said this at a panel session titled “Green Transformation – the Making of Sarawak as the Regional Energy Hub and Battery of Asean” at the Asean Sarawak Business and Economic Forum 2026 held here today.

He further stressed that net zero is dependent on the carbon markets. While companies prioritise energy efficiency, renewables and carbon capture technologies, the residual emissions will ultimately need to be offset with high-quality credits.

The aviation industry, he added, is already under pressure to stock up on credible credits amid tightening climate requirements.

The maritime sector is expected to follow suit after the International Maritime Organisation moved to introduce a carbon levy on large ocean-going ships over 5,000 gross tonnage, which emit 85 per cent of the total CO2 emissions from international shipping. These measures are set to be enforced in 2027.

Siew also cited the European Union’s Carbon Border Adjustment Mechanism (CBAM) as another driver of demand. CBAM has begun its initial implementation phase in which the mechanism will affect sectors such as iron, steel and cement, requiring exporters to account for embedded carbon emissions.

In stating this, he said Sarawak could play a critical role in supporting Malaysia’s broader carbon market ambitions, whether through compliance-based markets governed by international rules such as Article 6 of the Paris Agreement, or through voluntary carbon markets.

Under compliance markets, host countries must adhere to strict rules when transferring carbon credits to other nations. Voluntary markets, meanwhile, allow corporations to purchase credits outside formal regulatory frameworks.

At the state level, Siew suggested that introducing a carbon levy could help stimulate domestic demand.

“If you were to introduce a carbon levy, there can be some allowances that are permitted for entities to purchase carbon credits and then offset that. So I think that would actually essentially create demand.

“The route depends on which playbook you want to pursue, voluntary or a compliance-based regulation,” he said.