KUALA LUMPUR: Malaysia is planning a comprehensive revamp of its steel industry to manage overcapacity and prepare for decarbonisation.
Trade Minister Tengku Zafrul Aziz announced the 10-year roadmap with the goal of achieving a fully green sector by 2050.
The plan includes establishing clear licensing guidelines for manufacturers and implementing a carbon pricing framework.
It will also expand access to finance for the transition to green and higher value-added production.
Tengku Zafrul said steel was one of Malaysia’s most carbon-intensive industries, exposing it to regulatory market barriers.
He stated that decarbonisation had become a necessity for the sector’s future competitiveness.
The industry also faces a stark domestic supply and demand imbalance according to current projections.
Upstream capacity could reach 40.8 million tonnes by 2030 while demand is seen at only 14.7 million tonnes.
“This gap highlights overcapacity - assets underutilised, poor return on investments, and market conditions weakening competitiveness and resilience,“ he said.
Tengku Zafrul also proposed that the ASEAN bloc establish a database on capacity and utilisation.
Such a database could help address steel overcapacity, dumping and transshipment issues across the region.
Southeast Asian countries should also look to develop a common decarbonisation pathway.
He suggested exploring the establishment of hubs for green steel production within the region. – Reuters
