Malaysia unveils carbon market policy to cut emissions, enable carbon pricing and strengthen climate action framework
PETALING JAYA: Malaysia has moved to strengthen its climate ambition and introduce carbon pricing with the launch of the National Carbon Market Policy (NCMP).
Natural Resources and Environmental Sustainability Minister Datuk Seri Arthur Joseph Kurup said the country can no longer treat climate risks as distant threats, adding that the world is edging towards irreversible tipping points.
He said the policy, approved by the Cabinet earlier this month, is designed to ensure every tonne of carbon reduced or traded is backed by integrity and trust, positioning Malaysia as a credible participant in the international carbon market.
Arthur noted that climate impacts are being felt globally, from extreme weather events to shifting environmental patterns.
“We are facing a triple planetary crisis: climate change, biodiversity loss and pollution.
“Across the globe, we are witnessing unprecedented heatwaves, extreme rainfall, prolonged droughts and rising sea levels.
“This challenge does not spare any nation, and Malaysia is no exception,” he said at the Climate Change and Sustainability Conference yesterday.
He said the NCMP lays the foundation for Malaysia’s carbon pricing system, including future mechanisms such as carbon trading and a potential carbon tax.
Arthur also said Malaysia’s climate pathway is anchored in its Nationally Determined Contributions (NDC) under the Paris Agreement, with emissions projected to peak between 2029 and 2034, and an aspiration to peak as early as 2029, subject to enabling conditions and international support.
He added that the government is considering introducing a carbon tax, as announced by the prime minister in this year’s budget, although implementation has been delayed due to geopolitical challenges.
He stressed that the system must be implemented in stages to guarantee fairness and credibility across industries.
“Before any penalty or levy is introduced, we need to establish a proper carbon credit framework to ensure industries are not treated unfairly,” he said.
He noted that once the foundation is in place, Malaysia would ensure carbon credits are measurable, verifiable and supported by reliable, high-integrity data.
Arthur said this would be further supported by new legislation, including the forthcoming Climate Change Bill, which would strengthen enforcement of the policy.
He also outlined plans for a national carbon registry to centralise emissions data.
“With the carbon registry in place, we would have a comprehensive database of national emissions: how they are measured, priced and eventually traded internationally,” he said, adding that this forms the backbone of Malaysia’s long-term carbon market architecture.
Beyond the emissions peak, the government is targeting a reduction of between 15 and 30 million tonnes of carbon dioxide equivalent by 2035, alongside a long-term goal of achieving net-zero emissions by 2050.
“This is a significant milestone for a developing economy that is closely tied to energy-intensive sectors.”
Arthur linked climate action to broader ecological risks, highlighting that environmental degradation is weakening nature’s ability to absorb carbon.
He urged collective urgency and action.
“When we protect our forests, we are not just saving Malaysia, we are also helping sustain the world’s ability to breathe.”
