Global carbon trading has been muted for over a year now, with prices and retirements not seeing growth in 2024, according to research by carbon market data provider Allied Offsets. However, carbon project proponents and buyers recently told Eco-Business that they expect a resurgence in demand in the coming years.
The Langkap Biogas Plant is part of a grouped project registered with global carbon credit certifier Verra by Singapore-headquartered Monsoon Carbon, which is the project proponent. The plant itself is operated by Cenergi SEA, a Malaysian renewable energy investment firm.
Grouped carbon projects allow for multiple small projects which meet the same eligibility criteria to be registered on Verra as a single project to which new projects, dubbed project instances, can be added over time. The Langkap plant, which has been operating since February 2023, is the first project instance in its group.
In 2024, the plant reduced greenhouse gas emissions of the mill by approximately 25,000 tonnes of carbon dioxide and its equivalents (tCO2e), said Cenergi’s head of corporate strategy and sustainability Nesa Albeper deRozario.
Some 16,000 verified carbon units from the Langkap Biogas Plant, generated in 2023, will be auctioned on Bursa Carbon Exchange (BCX) on 18 June at a reserve price of RM36 (US$8.40) per tonne of carbon dioxide and its equivalent (tCO2e). An additional 10,448 units with the 2023 vintage are available for sale outside of the auction, said Monsoon Carbon’s managing director and founder Angus McEwin.
Meanwhile, a large multinational palm oil buyer has already purchased 10,103 units from the plant generated in 2024. An additional 15,171 units of the 2024 vintage will be available for sale in the first quarter of 2026, he said.
In terms of price, McEwin said that some of the Langkap biogas project’s credits have already sold for US$10. This is nearly five times the last traded price of global tech-based carbon credits already listed on BCX, which are based on the Linshu Biogas Recovery and Power Generation Project in China. Those credits had debuted at RM18.50 (US$4.31) per unit in 2023, but last traded between RM8.80 (US$2.05) and RM10 (US$2.23), according to BCX data.
Among the reasons Monsoon Carbon expects the Langkap biogas credits to perform better is that the vintage of credits being sold, which is the year the emissions were reduced, is more recent.
“It’s also a methane avoidance project, which is quite sought after in the market,” said McEwin.
Monsoon Carbon is working on adding more biogas plants to the grouped project, including three more that are operated by Cenergi, said McEwin during a webinar hosted by BCX last Thursday.
“We’re expecting to get to 300,000 credits annually once we get at least 14 projects included in the group, which we expect to be able to achieve by the end of 2026,” he said.
Only palm oil mills constructed before 2014 which use open lagoon systems to treat wastewater would be eligible for inclusion, McEwin explained, as newer mills are legally required to integrate methane capture systems in their design and construction.
Plants must also meet the eligibility criteria of being located in Malaysia, not having been commissioned yet, and emitting less than 60,000 tonnes of emissions a year, which is equivalent to about 600,000 tonnes of fresh fruit bunches processed a year.
Such small-scale biogas plants are on Verra Carbon Standard’s Positive List of Technologies, which means that they do not need to demonstrate additionality via a detailed investment analysis. Additionality refers to the concept that a carbon project would not otherwise have happened without the use of carbon credits.
McEwin said that biogas plants are expensive to invest in and to operate, so revenue generated from carbon credits justifies the costs as it improves the rate of return on investment for the project.
“Without the carbon credit revenue, it’s just not that attractive and [the construction of the biogas plant] doesn’t happen. The carbon credit revenue does actually make a material difference to the return on investment in these projects,” he said.
Revenue from the carbon credits will be used to fund the operation of the biogas plant, as well as innovation and community outreach, said deRozario.
To attract more traders to the exchange, BCX said that it has waived all platform fees, including fees for onboarding and trading, annual and maintenance fees, nonactivity penalties and withdrawal fees until 30 June 2025.
Cenergi’s deRozario said that stakeholder engagements had been carried out in January 2023 before the biogas plant began its operations, with representatives from the mill and local community present, including local authorities, regulators and community members.
