Malaysia has taken a significant step toward green growth and carbon reduction with the unanimous passage of the Carbon Capture, Utilisation and Storage (CCUS) Bill 2025 in the Dewan Negara. The bill, approved after its third reading by Economy Minister Datuk Seri Rafizi Ramli, lays the foundation for large-scale carbon capture initiatives aimed at curbing emissions and accelerating the nation’s transition to a low-carbon economy.

During the debate, Rafizi emphasized that natural carbon absorption efforts such as reforestation alone are insufficient to meet Malaysia’s climate commitments. CCUS will play a pivotal role in reducing industrial carbon emissions, ensuring that economic growth aligns with sustainability goals.

As part of Budget 2025, Malaysia will introduce a carbon tax on the steel and energy industries by 2026, encouraging businesses to adopt low-carbon technologies and invest in clean energy solutions. The bill also supports the establishment of a CCUS hub in the East Coast region, particularly in Kertih, which will serve as a catalyst for green industrial growth.

“This initiative is not just about reducing carbon—it’s about creating a sustainable future where industries can thrive while lowering emissions,” Rafizi stated. “By integrating CCUS into our national strategy, we are setting the stage for new green industries, job creation, and increased foreign investment in sustainable technology.”

State governments will benefit from new revenue streams, including land and business taxes, as well as port fees from CCUS terminal facilities. These developments will support infrastructure growth and expand Malaysia’s green economy, positioning the country as a leader in carbon management and climate-friendly industrialization.

To ensure effective implementation, the Ministry of Economy has established a national CCUS governance structure, which includes a steering committee, technical committee, and five focus groups. This multi-stakeholder approach will oversee CCUS adoption and ensure alignment with Malaysia’s broader green transition strategy.

With this bill, Malaysia is strengthening its commitment to environmental responsibility while unlocking new opportunities for green innovation. By embracing carbon capture as a key solution, the nation is paving the way for a more sustainable and competitive future.