Malaysia reveals the CO2 storage bill to be regional hub

Kuala Lumpur-Government of Malaysia has revealed the legislation for the regulation of carbon capture and storage activities, which will allow the oil producer to adopt and widen the emission reduction technology.

The draft law (CCU) will govern the capture, transport, use and storage of carbon dioxide, said the Minister of Economy, Rafizi Rami, in a statement on March 4.

The parliamentarians must vote for him from March 5, he added.

If approved, the law will only apply to activities in peninsular Malaysia and the federal territory of Labuan.

The largest state of Sarawak in Malaysia and Sabah, both located in Borneo, in 2024, called to be excluded from the draft law as part of a press for greater economic autonomy.

Malaysia, which aims to obtain Net-Zero emissions by 2050, has pushed to become a regional CCUS, in the hope that the industry will serve as a new source of economic growth.

Initially, the government expected the sector to add up to US $ 250 billion ($ 336.25 billion) to its economy within 30 years, although this number could decrease with Sabah and Sarawak.

The Malaysian GDP was $ 400 billion in 2023.

“This CCUS draft law is expected to be a starting point for Malaysia in the face of climate change challenges, thus strengthening the position of the leading country in low carbon technology in the region,” Rafizi said.

The carbon capture technology aspires greenhouse gases from the atmosphere and buries them underground or underlined forever, in theory neutralizing their effects on the climate.

Proponents say technology should be used alongside other climate-friendly technologies, such as renewable energy, but critics say CCU allows pollution at a time when corporations and countries should reduce emissions to the source.

Malaysia will soon begin permanent storage of carbon dioxide in offshore areas, and the Ministry of Economy will carry out a feasibility study for the onshore storage in 2025, according to Mr. Rafizi.

The draft law emphasizes that storage sites are responsible for environmental protection and managing other risks. Bloomberg

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