Chinese firm ByteDance, the parent company of social media application TikTok, is investing in forest conservation in Malaysia as it explores opportunities to decarbonise its data centre operations in the country.
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Malaysia is home to the company’s biggest data centre outside China, according to Firdaus Fadzil, head of public policy at ByteDance Systems Sdn Bhd, the company’s Malaysian subsidiary. ByteDance is the anchor tenant of the MY06 hyperscale data center in Johor, Peninsula Malaysia’s southernmost state bordering Singapore and has said last year that it plans to expand the facility with an additional investment of RM1.5 billion (US$337.5 million). It is also planning to invest some RM10 billion (US$2.3 billion) in building Malaysia as a regional artificial intelligence hub.
Last Wednesday, ByteDance Systems signed a conservation agreement with the Malaysia Forest Fund, an agency under Malaysia’s natural resources and environmental sustainability ministry (NRES), and Bina Darulaman, the public-listed investment holding company of the Kedah state government with operations in mining, property development, infrastructure development and more.
The agreement aims to protect and conserve the 92-hectare Darulaman Sanctuary, a forested plot of land located within a protected forest reserve on the island of Langkawi, off Peninsular Malaysia’s northwestern coast. The land is owned by Bina Darulaman and the sanctuary promoted to the public as an eco-tourism destination with an event space available for rent, according to its website.
“I’ve visited [the Darulaman Sanctuary] and even though the site may seem small, it is connected to other forested areas,” said Shah Redza Hussein, chief executive officer of the Malaysia Forest Fund.
The Darulaman Sanctuary is among the first of Malaysia’s forests being protected under the Malaysia Forest Fund’s Forest Conservation Certificate (FCC) protocol. Launched in June last year, the protocol is meant to enable Malaysian businesses and government agencies to support forest conservation, habitat protection and sustainable forest management initiatives. These include activities under the scope of the United Nations’ framework for reducing emissions from deforestation and forest degradation in developing countries (REDD+).
The FCC is a non-market instrument, meaning that it cannot be bought, sold or traded unlike carbon credits. Unlike other types of forest conservation areas in Malaysia, FCC sites are eligible for a tax deduction of up to 10 per cent and are subject to third party monitoring and verification by certification bodies approved by MFF.
Under the agreement, both ByteDance and Bina Darulaman’s infrastructure unit will both contribute towards forest conservation initiatives at the Darulaman Sanctuary, valued at RM700,000 (US$157,619) over a one-year period, and the improvement of the sanctuary, requiring RM176,380 (US$39,715) and two years to complete.
A dusky leaf langur spotted at the Darulaman Sanctuary in Langkawi, Kedah. It is one of several threatened species in the 91.9-hectare protected area. Image: Darulaman Sanctuary,
According to Bina Darulaman’s 2023 annual report, the site is home to 73 avian species, 169 butterfly varieties, 160 herbal species and 80 timber types. Several of these species are listed as endangered, near-threatened or vulnerable on the International Union for Conservation of Nature (IUCN) Red List, such as the long-tailed macaque, dusky langur, black giant squirrel and the great hornbill.
“From our perspective at TikTok and ByteDance, it is very important for us to balance ecological advancement, societal development, business growth, as well as climate best practices and sustainability,” ByteDance’s Firdaus said on a panel discussion at the conservation agreement’s signing ceremony.
According to Malaysia’s minister of international trade and industry Tengku Zafrul Abdul Aziz, as of December 2024, 19 data centres in Peninsula Malaysia used 435.5 megawatts (MW), or 2.2 per cent of the peninsula’s total electricity consumption. He did not, however, give an estimate of the emissions of these data centres, which have a combined capacity of 2,356 MW.
The ministry introduced a guideline for the sustainable development of data centres in December last year, which requires all data centres to measure how effective their power, carbon and water usage is.
In 2023, ByteDance said it would commit to achieving carbon neutrality by 2030 by decarbonising its operations to reduce 90 per cent of its emissions. The remaining 10 per cent of emissions would be offset – in Malaysia, this is being done via partnerships with organisations such as the Malaysia Forest Fund, said Firdaus.
Malaysia Forest Fund’s Redza said: “Multinationals and public listed companies operating in Malaysia have thousands and millions of carbon dioxide to offset by [their net zero deadlines]. They play a critical role of investing in the country, but they are also responsible for reducing their emissions and offsetting those they can’t reduce.”
In addition to the FCC, the fund is also putting together a forest carbon offset protocol to be launched next year, which would allow businesses to develop and invest in forest-based carbon offsets to help them meet their climate commitments. The protocol would set out requirements for the quantification, monitoring and reporting of emissions approved by NRES.
Although international carbon standards such as Verra are accepted and used in Malaysia, they require different criteria such as significant forest area sizes and long-term security of land tenure, said Redza. These could make forest carbon projects too expensive for local project developers, or potentially exclude critical but smaller forested areas from being protected as carbon projects.
“The funding gap between what we need to keep our trees standing and what we can afford from the government is huge. We need RM2.1 billion (US$472.6 million) a year, according to a biofinance study to keep our natural ecosystems standing, but we have less than RM7 million (US$157.5 million),” said Redza.
At the same event, NRES minister Nik Nazmi Nik Ahmad said the government will continue to explore innovative financing mechanisms, such as green bonds, sukuk, carbon tax and sustainable investments.
“For too long, forests have been seen merely as a commodity to be exploited, rather than as a vital asset to be preserved and managed for the long-term benefit of our nation. We firmly believe that forests should be regarded not just as a resource to be harvested, but as an invaluable asset – one that supports biodiversity, regulates climate, provides livelihoods, and strengthens our economy,” he said.
“By viewing forests this way, we shift towards a model of sustainable leadership that recognises the intrinsic value of conservation and sustainable management practices,” said Nik Nazmi.
Representatives of TikTok Malaysia, including head of public policy Firdaus Fadzil (second from left) and Bina Darulaman, including chief executive Raja Shahreen Raja Othman (second from right), signed a conservation agreement with Malaysia Forest Fund, represented by its chief executive Shah Redza Hussein (fourth from right). Image: Malaysia Forest Fund / LinkedIn
