PUTRAJAYA: Malaysia must ensure its carbon capture, utilisation, and storage (CCUS) industry takes off as soon as possible amid increasing competition from other countries, said Economy Minister Rafizi Ramli.
Rafizi said the government has engaged and discussed with Terengganu, Pahang, Sabah, and Sarawak, where the CCUS sites have been identified, followed by the remaining states.
The CCUS hub is not developed in isolation, and we are also facing competition from other countries, such as Indonesia, he said.
“CCUS investments and capacity booking are cyclical. As you can imagine, if Japan wants to take up the storage capacity, it will be for a long term, (like) 15-20 years.
“That means that if you miss this opportunity, storage will go somewhere else,” Rafizi said during a media briefing today on the CCUS initiative in Malaysia.
He noted that, based on all the engagement and discussions, all states are on the same page with the federal government.
“What we are doing now is allowing the wording of the federal bill to harmonise with Sarawak’s existing laws to ensure that they complement each other.
“The objective is to get the project off the ground as soon as possible,” he said.
Rafizi said more countries, including Malaysia’s trading partners, will implement carbon mitigation measures, fiscally and non-fiscally, and this is already happening in Europe.
Malaysia’s CCUS Bill will be presented in Parliament in December of this year and is expected to be gazetted by the end of December.
As a trading nation, Malaysia’s domestic industries, which export goods worldwide, will be subjected to a possible punitive carbon tax, and therefore, the demand to decarbonise will increase, Rafizi said.
He pointed out that the country will also need carbon storage to mitigate carbon emissions, especially those from local industries and hard-to-abate sectors like cement, steel, and petrochemicals.
“That is a given. I think in the first few years, a portion of the capacity will be utilised, most probably by Petronas (due to its many) installations.
“But going forward, whether we like it or not, we have to accept that the climate crisis is real,” he said.
Rafizi noted that early indications showed that the global temperature had increased by 1.0 degrees and that the worldwide focus on mitigating climate change would only intensify.
Hard-to-abate sectors in Malaysia are expected to contribute between 8.0 per cent and 19 per cent of carbon dioxide emissions by 2050, and CCUS will enable these sectors to maintain their competitiveness in the future.
Malaysia has the potential to become a CCUS regional hub. Its potential carbon dioxide storage site is estimated at over 150 gigatonnes, of which 13.3 gigatonnes come from depleted oil and gas reservoirs and 140 gigatonnes from saline aquifers.
