Putrajaya Tables Landmark Carbon Capture Bill Amid Mixed Reactions

• Bill will exclude Sabah and Sarawak for now.
• An environmental NGO points out the lack of public consultation in introducing the bill.

The Malaysian government has introduced the Carbon Capture, Utilization, and Storage (CCUS) Bill 2025, a groundbreaking legislative effort aimed at regulating carbon management and aligning the country with international climate commitments under the Paris Agreement. While the bill has been lauded as a critical step toward combating climate change, concerns have emerged over its potential implications and the speed of its passage through Parliament.

[update: The Dewan Rakyat has approved the bill on 6th March]

Key Features of the CCUS Bill

The CCUS Bill, tabled by the Economy Ministry on March 3, seeks to establish a comprehensive framework for carbon capture activities in Malaysia. Among its provisions are:

• The creation of the Malaysian Carbon Capture, Utilization, and Storage Agency to oversee licensing, compliance, and industry development.
• Mandatory registration and permitting for carbon capture facilities and storage sites, both offshore and onshore.
• Strict monitoring protocols to prevent leaks and environmental damage.
• A licensing system for carbon transportation and imports, requiring companies to register for moving captured carbon dioxide via pipelines or other means.
• An Injection Levy to fund long-term monitoring of stored carbon and a Post-Closure Monitoring Fund for addressing storage risks.

Violations of these regulations could result in fines up to RM2 million or prison sentences of up to five years. The legislation applies across Peninsular Malaysia and Labuan but requires state consultations before implementation Sabah and Sarawak.

Government’s Vision

The Economy Ministry has emphasized that the CCUS Bill is pivotal for Malaysia’s climate agenda. By regulating carbon capture activities, the government aims to reduce greenhouse gas emissions while fostering economic growth through the development of a new industrial sector. The legislation also positions Malaysia as a leader in Southeast Asia’s climate action efforts.

Concerns from Civil Society

Despite its ambitious goals, the bill has faced criticism from environmental groups such as Sahabat Alam Malaysia (SAM). The NGO has expressed concerns over what it describes as the “hasty” nature of the bill’s introduction. SAM argues that insufficient public consultation has taken place, leaving key stakeholders—including local communities—without a voice in shaping policies that could significantly impact them.

SAM also questions whether carbon capture technologies are truly effective in addressing climate change. It warns that reliance on such methods might divert attention from more sustainable solutions like renewable energy adoption and energy efficiency measures. Additionally, SAM highlights potential risks associated with carbon storage, including leaks that could harm ecosystems and public health.

Balancing Urgency with Transparency

The debate surrounding the CCUS Bill underscores the tension between urgency in addressing climate change and ensuring transparency in policymaking. While proponents argue that immediate action is necessary to meet international climate targets, critics stress that robust stakeholder engagement is essential to avoid unintended consequences.

Conclusion

The CCUS Bill represents a significant milestone in Malaysia’s climate policy landscape. However, balancing its ambitious goals with concerns raised by civil society will be crucial in ensuring its success.