RHB Bank, yesterday signed a Memorandum of Understanding (MoU) with Japan Bank for International Cooperation (JBIC) and Japan Carbon Finance Ltd (JCF), to offer carbon credit financing to Malaysian firms that wish to sell their carbon credits.
RHB Bank was represented by its Chairman, Datuk Azlan Zainol and its Chief Executive Officer, Michael J. Barrett, while JBIC by its Senior Executive Director, Fumio Hoshi, and JCF by its President, Hiromu Tanaka.
Carbon credits are points given for reducing pollution, measured in units of certified emission reductions (CERs). Each CER is equivalent to one tonne of carbon dioxide reduction. Under the Kyoto Protocol, countries which are signatories to the treaty, are committed to legally-binding targets, to limit or reduce their greenhouse gas emissions. Thus, developed industrialised countries, which are normally more polluted, are allowed to buy carbon credits from developing countries, to offset their carbon dioxide and greenhouse gas emissions. Hence, companies in developing countries, can maximize returns through the sale of these credits.
Under its carbon credit financing, RHB chairman, Datuk Azlan Zainol said, JBIC, via RHB, will fund projects undertaken by companies, to reduce greenhouse gas emissions. They will also sell their carbon emission rights to JCF or any other Japanese entity, under a proposed carbon credit-purchasing scheme. Both JCF and JBIC, are already trading carbon credits in the international market.
Malaysia currently has some 3,000 companies, mainly from the biodiesel, steel and waste management industries, which have the potential to sell carbon credits. For a start, RHB has identified 10 potential companies from the biodiesel and steel industries, for its carbon credit financing packages, ranging from RM30 million to RM450 million.
The bank's Japanese Business Executive Director, Akira Miyama said, the bank expects to secure 30 to 40 clients within two years as Malaysia is one of the most promising markets for Japan, in the trading of carbon credits.
The Minister of International Trade and Industry, Datuk Seri Rafidah Aziz, who officiated the event said, the use of renewable energy resources, such as palm biomass, is one of the key strategies promoted under the Ninth Malaysia Plan, and such projects are eligible for tax incentives.
Adapted from Business Times, Star Biz, 28 July 2006
