Renewable energy certificates (RECs) will be the second offering on Malaysia’s Bursa Carbon Exchange (BCX), with an auction on the 25th June 2024. This product is another step toward the BCX’s aim to be a fully Shariah compliant and environmentally diverse product exchange.
The REC auction is a prelude to trading activities, which the BCX has been conducting for carbon credits since September 2023. Participation involves an onboarding process costing RM6,000 (US$1,255) — which includes prefunding of the required amount to cover bidding and transaction costs.
The auction is split into two sessions, with bidding in the morning and/or afternoon. Qualified participants will start with minimum bids of 1,000 RECs at a RM4.5 (US$0.94) floor price.
Once both auctions close, the clearing price will be set based on the highest cumulative volume of bids that would match or exceed the offered REC quantity. Once allocation is done, all participants will pay the same clearing price.
These RECs can then be redeemed to report zero emissions for each unit of electricity consumed or traded on the exchange. Trading in RECs provides consumers an option to source for renewable energy in situations or areas that have constraints, thus allowing renewable facilities to be located where they are most efficient.
Issued in compliance with the globally recognized I-REC Standard — for robust environmental attribute tracking — the RECs are sourced from Sarawak Energy’s Murum hydropower plant. RECs are issued when one megawatt-hour of electricity is generated and delivered to the electricity grid from a renewable energy source.
