Malaysia has signed a Memorandum of Cooperation with four other ASEAN members to create the ASEAN Common Carbon Framework (ACCF), aiming to foster a unified and credible carbon trading system across the region. The pact, facilitated by Malaysia’s Ministry of Natural Resources and Environmental Sustainability, seeks to enhance regional cooperation and accelerate low-carbon investments by establishing interoperable carbon markets.
The ACCF is expected to unlock carbon project opportunities unique to the ASEAN region while strengthening demand for carbon credits. Highlighting its importance, Minister Nik Nazmi Nik Ahmad stated, “The ACCF is both timely and essential as it aspires to unlock carbon project opportunities that [are] unique to the Asean region. It allows us to build an integrated, efficient, and credible carbon market, fostering regional cooperation and accelerating low-carbon investments.”
The initiative aligns with Malaysia’s upcoming ASEAN Chairmanship in 2025 and its commitment to reducing carbon emissions intensity by 45% by 2030 from 2005 levels. By fostering interoperable carbon markets, the ACCF aims to build a robust ecosystem that supports ASEAN’s broader green finance objectives.
The announcement follows the recent approval of Article 6.4 of the Paris Agreement at COP29, which established global standards for carbon credit trading. Known as the Paris Agreement Crediting Mechanism, the framework is designed to lower global emissions more affordably by channelling direct financial resources to developing nations. COP29 negotiators believe the mechanism could save up to US$250 billion annually in climate action costs.