Malaysia unveils CO2 storage Bill in push to become regional hub

KUALA LUMPUR – Malaysia’s government unveiled legislation to regulate carbon capture and storage activities that will allow the oil producer to widely adopt and monetise the emissions-reducing technology.

The (CCUS) Bill will govern the capture, transport, utilisation and storage of carbon dioxide, Economy Minister Rafizi Ramli said in a statement on March 4.

Parliamentarians are set to vote on it as early as March 5, he added.

If approved, the law will apply only to activities in Peninsular Malaysia and the Federal Territory of Labuan.

Malaysia’s biggest state Sarawak and neighbouring Sabah, both located in Borneo, in 2024 called to be excluded from the Bill as part of a push for greater economic autonomy.

Malaysia, which aims to achieve net-zero emissions by 2050, has pushed to become a regional CCUS hub, hoping the industry will serve as a new source of economic growth.

The government had initially expected the fledgling sector to add up to US$250 billion (S$336.25 billion) to its economy within 30 years, though that number might fall with Sabah and Sarawak’s exclusion.

Malaysia’s GDP was US$400 billion in 2023.

“This CCUS Bill is expected to be a starting point for Malaysia in facing the challenges of climate change, thereby strengthening the country’s position as a leader in low-carbon technology in the region,” said Mr Rafizi in the statement.

Carbon capture technology sucks greenhouse gases out of the atmosphere and buries them underground or undersea forever, in theory neutralising their effects on the climate.

Proponents say the technology should be used alongside other climate-friendly tech like renewable power, but critics say CCUS enables pollution at a time when corporations and countries should be drawing down emissions at source.

Malaysia will soon begin permanent carbon dioxide storage in offshore areas, and the Economy Ministry will conduct a feasibility study