Malaysia unveils CO2 storage Bill in push to become regional hub

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 Bill will govern the capture, transport, utilisation and storage of carbon dioxide, Economy Minister Rafizi Ramli said in a statement on Tuesday (Mar 4). parliamentarians are set to vote on it as early as Wednesday, he added.

If approved, the law will only apply to activities in Peninsular Malaysia and the Federal Territory of Labuan. Malaysia’s biggest state Sarawak and neighbouring Sabah, both located in Borneo, last year 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 carbon capture, utilisation and storage (CCUS) hub, hoping that 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 to its economy within 30 years, though that number might fall with Sabah and Sarawak’s exclusion. Malaysia’s gross domestic product 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,” added 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 that the technology should be used alongside other climate-friendly tech like renewable power, but critics point out that CCUS enables pollution at a time when corporations and countries should be drawing down emissions at source.

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Malaysia will soon begin permanent carbon dioxide storage in offshore areas, and the Economy Ministry will conduct a feasibility study for onshore storage this year, according to Rafizi. The Bill emphasises that storage site operators are responsible for environmental protection and managing other risks.