The Malaysia Forest Fund (MFF) recently launched the Forest Conservation Certificate (FCC), a non-market mechanism aimed at channeling private sector funds to support forest conservation projects in Malaysia. The FCC Protocol is the first instrument under Malaysia’s REDD Plus Financial Framework (RFF), which is implemented by the MFF, established in 2021 and whose members comprise policymakers, industry players and non-governmental organisations. FCC complements the Ecological Fiscal Transfer (EFT), which allocates funds to state governments for biodiversity and forest protection. While FCCs focus on smaller areas and cannot generate carbon credits, another instrument called the Forest Carbon Offset (FCO) is being developed to supports carbon credits and offset activities.
Verified FCC projects can help companies meet environmental, social, and governance (ESG) reporting requirements related to biodiversity. Additionally, companies participating in FCC activities can receive a 10% income tax deduction.
The FCC represents a significant step toward sustainable forest management in Malaysia.
