Malaysia Plans Carbon Tax Fund To Green Steel Industry By 2050

Malaysia is implementing a comprehensive Steel Industry Roadmap 2035 to address the steel sector's overcapacity, environmental impact, and global competitiveness. The government plans to introduce a carbon tax on steel producers by 2026, aiming to establish a 'carbon competitiveness fund' to support green transition projects and low-carbon technology adoption. Overcapacity is a significant issue, with projected upstream capacity vastly exceeding domestic demand, prompting strategies to manage excess production and illegal dumping. The roadmap focuses on transitioning to higher-value steel products demanded by automotive and electronics sectors and anticipates mandatory emissions reporting and green steel standards aligned with international norms. Regional cooperation within ASEAN is encouraged to harmonize decarbonization pathways, establish common data on steel capacity and utilization, and develop green steel hubs. These efforts support Malaysia's commitment to transforming its steel industry into a fully green sector by 2050, aligning with net-zero greenhouse gas emission goals and addressing regulatory and market challenges.