30 BUDGET 2022
@ green | November-December , 2021
Focus on sustainability
Bursa Malaysia to launch the Voluntary Carbon Market
BY FATIHAH MANAF
FOLLOWING PRIME MINIS- TER Datuk Seri Ismail Sabri Yaakob ’ s announcement to make Malaysia a carbonneutral country as early as 2050 , the government decided to include several initiatives to drive their sustainability agenda under Budget 2022 . The efforts were part of Malaysia ’ s commitment to addressing climate change .
During the budget tabling , Finance Minister Tengku Zafrul Abdul Aziz said : “ We are committed to meeting the Sustainable Development Goals ( SDGs ), and the annual budget formulation is now aligned to the 17 SDGs .
“ Additionally , the budgets for this year and subsequent years will be aligned to green budgeting to enable movement towards the implementation of environmentally friendly development projects and programmes .”
“ To meet the carbon-neutral target , the Voluntary Carbon Market ( VCM ) initiative will be launched under Bursa Malaysia ’ s advocacy . This initiative acts as a voluntary platform for carbon credit trading between green asset owners and other entities transitioning towards low-carbon practices .”
Budget 2022 was presented in Parliament on Oct 29 with the theme ‘ Keluarga Malaysia , Makmur Sejahtera ’. It emphasises three main areas : Rakyat ’ s well being , resilient businesses and a prosperous and sustainable economy .
The first strategy under the third focus aims to strengthen the sustainability agenda . There are four initiatives under
THE LONG-AWAITED Budget 2022 witnessed the government ’ s initiatives to drive its economy post-pandemic and its target to be carbon neutral by 2050 . To address the climate emergency and sustainability , the government seeks to adopt low carbon practices .
The reforms in the transportation sector , particularly on electric vehicles ( EVs ), were also addressed in the budget . According to Finance Minister Tengku Zafrul Abdul Aziz , the government sees the potential of electric vehicles with Energy Efficient Vehicle ( EEV ) features to minimise vehicle smoke pollution .
“ To support the development of the local EV industry , the government proposes to provide import duty , excise duty and sales tax exemptions on EVs . Road tax exemptions of up to 100 per cent will be given to the vehicle owners ,” said Tengku Zafrul . this strategy which focuses on : I . Low carbon practice II . Environment and biodiversity III . Community empowerment IV . Sustainability Sukuk
The VCM initiative , under the low carbon practice strategy , is one of many efforts by the government to drive reforms and ensure the market remains sustainable and competitive .
Under this first initiative , Bank Negara Malaysia will also provide a Low Carbon Transition Facility with a fund value of RM1 billion , matching fund arrangements with participating financial institutions .
The effort is to assist SMEs to adopt sustainable and low carbon practices such as increasing the use of sustainable raw materials and renewable energy .
Environment and biodiversity
For the year 2022 , a total of RM450 million will be channelled to various ministries to implement several initia-
For next year , RM100 million will be provided in the form of a matching grant with the contribution of GLC-owned foundations to NGOs to fund various social programmes assisting the vulnerable in terms of education , income generation and mental health .”
Local EV industry to drive low carbon initiative
“ Additionally , individual income tax reliefs of up to RM2,500 will be given for the purchase and installation , rental and hire purchase of EV charging facilities as well as payment of EV charging facility subscription fees .”
Under the second strategy for resilient businesses , the government would allocate RM12 million via matching grants through Collaborative Research in Engineering , Science and Technology in areas such as Gallium Nitride application in LEDs and electric vehicles . tives as follows : I . Nature conservation projects II . Programmes to empower the involvement of local communities , army veterans and Orang Asli in biodiversity conservation
III . Assistance for zoo operating costs , efforts to increase the breeding of Malayan Tigers and implementation of the Frozen Zoo programme IV . The 100 million Tree Planting Campaign V . Grants to support the role of the World Wildlife Fund ( or WWF ), All-Party Parliamentary Group Malaysia ( APPGM ) and Environmental Partners “ To institutionalise the implementation of Ecological Fiscal Transfer ( EFT ) for the conservation of biodiversity , RM70 million of EFT will be allocated every year to all States . The EFT implementation mechanism will be strengthened through outcome-based ecological criteria .
“ Malaysia is committed to fulfilling its obligations as a signatory to the Paris Agreement . Last April , the government successfully issued the world ’ s first sovereign Sustainability Sukuk through the issuance of US $ 800 million .
“ The Sukuk has been oversubscribed by over 5.6 times which reflects investor confidence in the country . For next year , the government will issue Sustainability Sukuk denominated in Ringgit Malaysia of up to RM10 billion to be channelled to eligible social or environmentally friendly projects ,” Tengku Zafrul added .
Under the community empowerment initiative , various parties , especially NGOs , GLCs , social enterprises and communities , played an influential role as field agents . Tengku Zafrul said this was in support of the government ’ s efforts to develop the people ’ s socioeconomics since the pandemic began .
In 2021 , the government , together with Yayasan Hasanah , funded various initiatives for the vulnerable .
“ One recipient of the Hasanah Special Grant is Earth Heir , a social enterprise that promotes eco-friendly craft items produced by the local community . The founder of Earth Heir , Sasibai Kimis , is determined to help these craft producers grow their income sustainably .
“ For next year , RM100 million will be provided in the form of a matching grant with the contribution of GLC-owned foundations to NGOs to fund various social programmes assisting the vulnerable in terms of education , income generation and mental health .” — @ Green