Issue 3 - American Palm Oil Council

Environment
Japan wants carbon credits from Malaysia to meet climate-change commitments
Malaysian firms looking to sell
carbon emission rights to
Japanese counterparts,
including Japan Carbon Financing Ltd
(JCF), now have access to a finance
package offered by RHB Bank Bhd.
This will extend loans or guarantees
backed by the Japan Bank for
International Co-operation (JBIC)
which, together with JFC, has been
sourcing carbon credits in the
international market.
Under the 1997 Kyoto Protocol, Japan's
greenhouse gas emissions must drop to
6% below its 1990 level. It will have to
reduce emissions by 14% currently to
achieve this target, with purchase of
carbon credits being one of the
mechanisms identified.
JCF president Hiromu Tanaka, JBIC
senior executive director Fumio Hoshi
and RHB chairperson Datuk Azlan
Zainol signed a memorandum of
understanding on July 27.
International Trade and Industry Minister
Dato’ Seri Paduka Rafidah Aziz witnessed
the ceremony in Kuala Lumpur. She said
companies using biomass as part of
renewable energy initiatives would qualify
for pioneer status or investment tax
allowance.
The partnership will also promote Clean
Development Mechanism (CDM)
projects. Ten potential projects have been
identified, five of which have received
initial government approval. The project
value ranges between RM30 million and
RM450 million.
Malaysia signed the Kyoto Protocol in
March 1999. In August 2003, the
National Committee on CDM approved
project criteria. The focus is on utilising
palm oil effluents including biomass and
solid waste in urban areas, as well as
renewable energy sources.
About 3,000 companies have potential
for CDM projects, mainly in the biodiesel,
steel and waste management
industries. RHB expects to secure 30-40
clients in the next two years, which would
reinforce Malaysia’s position as a steady
source of carbon credits.
JBIC, wholly owned by the Japanese
government, is the world’s largest
government financial arm. JCF was set up
in November 2004 to purchase carbon
credits until 2012, with a fund size of
US$140 million and equity participation
from 31 corporations.
The World Bank put carbon credit trade as
worth US$550 million in 2004; US$2.7
billion in 2005; and US$900 million in the
first quarter of 2006. Japan is the biggest
buyer at some 38% of units from January
2005 to March this year. Britain was next
with 15% and Italy followed with 11%.
This report was based on information from the JBIC, JCF and RHB websites and Press reports.
GLOBAL OILS & FATS BUSINESS MAGAZINE •VOL.3 ISSUE 3, 2006 17