KUALA LUMPUR: Malaysia will soon begin carbon pricing to facilitate carbon trading and explore carbon tax, said Deputy Investment, Trade and Industry Minister Liew Chin Tong.
Revenue from these measures, he added, should be channelled into green investments, including investments in green steel.
“The European Union (EU) will implement a carbon border adjustment mechanism (CBAM) in 2026. Carbon pricing, trading, and taxation are critical aspects of the decarbonisation agenda. Under CBAM, the export of steel and other listed items from Malaysia will be taxed by the European Union unless Malaysia collects the tax,” Liew stated at the launch of the Malaysian Iron and Steel Industry Federation’s (Misif) 15th report on the status and outlook of the Malaysian iron and steel industry today.
He reiterated the Ministry of Investment, Trade and Industry’s commitment to collaborating with the industry to address the scrap metal challenge, find solutions to shortages, and create a better ecosystem, moving from a vicious to a virtuous cycle.
Liew highlighted the concerning utilisation rate of Malaysia’s crude steel production capacity, which stood at 39.1% in 2023. This is significantly lower than the global average of 75.7% and the Asean-6 average of 60.1%.
“Flat products may have a brighter prospect, given the ongoing, once-in-a-generation relocation of supply chains from China to Southeast Asia,” he noted.
Misif president Datuk Lim Hong Thye said the federation understands the necessity of aligning with the government’s aspirations to achieve net-zero carbon emissions by 2050.
Lim noted that global trends show more regions and countries developing mechanisms similar to the EU’s CBAM to prevent carbon leakage and encourage greener production processes.
“It is imperative for the industry to proactively engage and leverage all available support to enhance green initiatives and align with the government’s aspirations,” he said.
