Plantation And Commodities Ministry Studying Carbon Credit Mechanisms Within MSPO Framework

By Danni Haizal Danial Donald

KUALA LUMPUR, April 26 (Bernama) -- The  Plantation and Commodities Ministry (KPK) is exploring the phased development of carbon-related mechanisms through the Malaysian Sustainable Palm Oil (MSPO) certification, including assessing the suitability of carbon credit models aligned with the country’s palm oil industry.

Minister Datuk Seri Dr Noraini Ahmad said this effort will also involve studying the institutional governance; monitoring, reporting and verification (MRV) and data ownership aspects; as well as the value creation potential for industry players.

“This is to ensure that any mechanism developed is credible, trusted by the market, and practical to implement on the ground without compromising the foundation and credibility of the MSPO certification, particularly when it comes to smallholders,” she told Bernama.

In principle, Noraini said, the ministry believes that efforts to strengthen sustainability elements in MSPO, including the reduction, management, and reporting of carbon emissions, are aligned with global market requirements as well as Malaysia’s commitments to the climate change agenda.

“In this context, the proposal to integrate carbon credit elements (within the MSPO) is seen as having value added potential to the industry.

“However, its implementation requires careful and phased study and evaluation, particularly in terms of data readiness, the robustness of measurement systems, MRV, and suitability with the local industry structure, including smallholders,” she said.

Meanwhile, she said KPK’s current priority is to strengthen the foundation of the existing MSPO certification implementation.

This includes improving greenhouse gas (GHG) calculation and reporting, enhancing data transparency and integrity, and strengthening the system for supply chain traceability.

“Ultimately, any MSPO development, including the exploration of carbon credit elements, will be carried out based on a comprehensive study and evaluation.

“The implementation will involve engagement with relevant ministries and agencies, industry players, experts, and international partners to ensure a balance between market competitiveness, global compliance requirements, and national interest,” she explained.

In December last year, Federal Land Development Authority (FELDA) chairman Datuk Seri Ahmad Shabery Cheek proposed the introduction of a carbon enhancement protocol into the MSPO certification, effectively transforming it into MSPO 3.0.

He said MSPO 3.0 would integrate carbon accounting and crediting mechanisms into the certification process.

Ahmad Shabeery also proposed the establishment of a national task force led by the Ministry of Natural Resources and Environmental Sustainability to ensure Malaysia develops an oil palm-based carbon credit framework.

-- BERNAMA