Hajiji: Sabah setting high standards to protect carbon credit reputation

KOTA KINABALU, Sept 24 — Chief Minister Datuk Seri Panglima Hajiji Noor has emphasized that Sabah will not allow unvetted projects or speculative trading to tarnish its nascent carbon market. Hajiji stressed that stringent regulatory standards are crucial for maintaining investor confidence. He cautioned that flawed initiatives, overstated climate claims, undervalued natural resources, and the sidelining of indigenous communities could severely compromise the credibility of Sabah's carbon credits on an international level.

"It is therefore in Sabah's commercial interest to uphold the highest standards of environmental, social, financial, and governance integrity. Buyers will demand full transparency. We will not allow unvetted projects to be rushed to market or traded on speculation," Hajiji stated. The forthcoming Sabah Climate Change and Carbon Governance Enactment 2025 will provide legal clarity by officially recognizing the state's ownership of carbon rights, subject to legal provisions.

This legislation will also set clear guidelines for various carbon-related activities, from project approvals to credit trading. While a specific enforcement date has not been announced, Hajiji pointed out that the framework will offer investors a streamlined, coordinated regulatory pathway for project licensing and carbon registry entries.

The newly formed Sabah Climate Change Action Council will lead state climate policy, draft the state carbon budget for cabinet approval, and facilitate inter-agency collaboration between state and federal authorities, backed by a dedicated Climate Registry and Inventory Centre. Recognizing the substantial initial investment required for early-stage carbon projects, Hajiji urged the banking and investment sectors to develop innovative financing solutions.

He directed his appeal to major financial institutions such as CIMB Bank Berhad, Bursa Malaysia, and institutional investors to devise or collaborate on practical financing frameworks. Hajiji emphasized that Sabah must strike a balance between project credibility, commercial demand, and structured financing to ensure that conservation efforts yield sustainable economic benefits.

He highlighted that the state is pursuing a diversified portfolio of carbon assets, focusing on high-potential sectors such as the blue economy, sustainable agriculture, renewable energy, green technology, and carbon capture and storage (CCS). Citing a specific example, Hajiji mentioned the Kuamut Rainforest Conservation Project, covering around 83,381 hectares of lowland and hill dipterocarp forests, which is expected to achieve an average annual emissions reduction of over 800,000 tonnes of carbon dioxide equivalent.