KUALA LUMPUR: Malaysia is developing a national carbon credit system for the forestry sector, termed the Forest Carbon Offset (FCO) mechanism, to promote transparent carbon trading and prevent greenwashing.

Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad said: “The ministry has introduced the REDD+ financial framework.

“This initiative offers financial support to state governments for activities focused on forest conservation and ecosystem sustainability, particularly to mitigate climate change.

“A key component of the REDD+ financial framework is the FCO mechanism.

“It serves as the primary mechanism for generating carbon credits in the forestry sector for domestic and international markets.

“Our aim is to create a domestic carbon credit system aligned with international standards, including Verra and the Gold Standard, while ensuring competitive fees.

“This system is being developed with input from stakeholders,” he said during the ministry’s winding-up session on the debate on the motion of thanks for the royal address.

He added that the ministry is enforcing stringent standards for carbon credits to prevent greenwashing.

The ministry is reviewing the implementation of the MyHIJAU certification framework, he added.

“The goal is to instill confidence in the MyHIJAU label, ensuring that certified products are sustainable and not a form of greenwashing.”

MyHIJAU is a government initiative under the Malaysian Green Technology and Climate Change Corporation.

The corporation oversees a certification and labelling programme to identify eco-friendly products and services that comply with domestic and international environmental standards.

He added that the government is conducting a National Carbon Market Policy study in phases, ensuring the involvement of state governments.

Source: NST