Sabah takes cautious approach to carbon market trading with new regulatory framework

Sabah's government is deliberately slowing down its carbon market rollout, insisting that unvetted projects will not be traded on speculation. The state has passed the Sabah Climate Change and Carbon Governance Enactment 2025, which legally recognizes state ownership of carbon rights and sets rules for project approval and credit trading. Oversight will sit with the Sabah Climate Change Action Council, supported by a new registry and inventory center, to provide investors with a transparent and coordinated gateway. The state already has Malaysia's first nature-based verified carbon credit project, the Kuamut Rainforest Conservation Project, covering 83,381 hectares and expected to deliver around 800,000 tonnes of CO2 reductions. Sabah also highlights its 340,000 hectares of mangroves, oil palm waste methane capture, and renewable energy expansion under its 2040 roadmap. But the Chief Minister stresses that implementation is the main task, and calls on financial institutions like CIMB and Bursa Malaysia to help bridge the capital gap for credible projects. The key takeaway: Sabah wants to build buyer confidence through strict governance and transparency rather than rush credits to market. The challenge remains turning regulatory intent into bankable projects that deliver real climate impact.