(NOV 20): Malaysia on Wednesday said it has signed a pact with four fellow Asean members to develop a carbon trading framework for the bloc.

Malaysia signed a Memorandum of Cooperation with carbon market associations from four other members of Asean to develop the Asean Common Carbon Framework (ACCF), according to the Ministry of Natural Resources and Environmental Sustainability.

“The ACCF is both timely and essential as it aspires to unlock carbon project opportunities that [are] unique to the Asean region,” said Minister Nik Nazmi Nik Ahmad in a statement.

The framework would also create “stronger demand signals through interoperable carbon markets in this region, allowing us to build an integrated, efficient, and credible carbon market, fostering regional cooperation and accelerating low-carbon investments,” he said.

The pact comes after negotiators at the United Nations’ climate summit COP29 approved Article 6.4 of the Paris Agreement, also known as the Paris Agreement Crediting Mechanism, marking a consensus on standards for an international carbon market.

The standards established a centralised framework for carbon credit trading designed to lower global emissions more affordably with direct, substantial financial resources to developing nations that COP29 countries hope will save up to US$250 billion annually in climate action costs.

The pact also coincides with Malaysia set to assume Asean Chairmanship in 2025. Malaysia has also pledged to cut the intensity of its carbon emissions by 45% by 2030 from 2005 levels.

“The interoperable carbon markets creates a bigger market of supply and demand for carbon credits while fostering a cohesive carbon ecosystem that supports Asean’s overarching green finance goals,” the ministry added.