Malaysia launches its carbon tax, as experts warn that low tax rates could slow the development of the carbon capture industry. (Photo: CGS International)
Malaysia is set to roll out its carbon tax framework from January 2026, with regulated companies required to begin measuring and reporting their carbon emissions as a preparatory step ahead of full implementation.
While the government is still deliberating the carbon tax rate and enforcement details, tax specialists have suggested that Malaysia take a gradual approach similar to Singapore’s, starting at SGD 5 per tonne (about USD 3.89) to avoid placing excessive cost pressure on businesses. Industry experts, however, warn that continued uncertainty over the carbon tax mechanism could dampen momentum for carbon capture, utilization and storage (CCUS) projects.
