Press Release - Labuan Financial Services Authority Issues Circular on Guidance for Carbon Credit Trading and Related Activities in Labuan IBFC
Labuan Financial Services Authority Issues Circular on Guidance for Carbon Credit Trading and Related Activities in Labuan IBFC
9 May 2025: Labuan Financial Services Authority (Labuan FSA) has released a new circular on conducting carbon credit trading and related activities within its jurisdiction – [Labuan International Business and Financial Centre (Labuan IBFC)], reinforcing its commitment to supporting Malaysia’s sustainability agenda and aligning with international carbon finance standards.

In response to growing global recognition of carbon markets under international frameworks, Labuan FSA aims to provide a facilitative environment for carbon-related initiatives. The guidance outlines the use of existing Labuan structures in Labuan IBFC to support carbon finance activities, including:

• Carbon Credit Trading through Labuan International Trading Companies (LITCs)
• Carbon Project Financing and Investment via Labuan funds and Protected Cell Companies (PCCs)
• Risk Management Solutions such as captives and reinsurance for project risks
• Digital Innovation through blockchain applications and tokenisation of carbon credits

This guidance serves as a strategic reference for market participants and does not introduce new licensing requirements. Labuan FSA will continue to provide innovative and globally aligned financial solutions, reinforcing its role as a dynamic hub for sustainable finance in the region.

Labuan Financial Services Authority
9 May 2025

FOR FURTHER INFORMATION, PLEASE CONTACT:

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E-mail: communication@labuanfsa.gov.my
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