KUALA LUMPUR — The Malaysian government is poised to introduce a carbon tax as part of a broader initiative to promote environmentally sustainable investments, particularly targeting high-emission industries, according to Tengku Datuk Seri Zafrul Abdul Aziz, the Minister of Investment, Trade and Industry (MITI).
Speaking at a media conference where he unveiled the Green Investment Strategy (GIS), Minister Zafrul emphasized the necessity of a balanced approach that combines incentives with penalties to foster a fair and transparent business landscape.
“Adopting a punitive stance, similar to other developed nations, we’re contemplating the introduction of a carbon tax. We’re coordinating with the Ministry of Finance and the Ministry of Natural Resources and Environmental Sustainability to formulate an effective implementation strategy,” Minister Zafrul stated.
He highlighted the urgency of the initiative, noting that a single sub-sector of the manufacturing industry contributes nearly a quarter of the nation’s carbon emissions. Without a robust system of penalties, such as a carbon tax, there is little economic impetus for companies to undertake costly emission reductions.
“The absence of such measures would leave environmentally conscientious companies at a competitive disadvantage, as they bear higher costs without commensurate benefits,” he added.
The GIS aims to position Malaysia as a leading destination for green investment by 2030, aligning with the goals of net zero emissions and socio-economic growth outlined in the National Environmental Technology Roadmap (NETR) and the New Industrial Master Plan (NIMP) 2030.
Minister Zafrul revealed that 65 percent of Malaysia’s green investments are currently domestically sourced. The GIS is expected to enhance this by attracting more foreign investment, contributing an estimated RM80 billion to the Gross Domestic Product (GDP) and creating 350,000 high-skilled jobs by 2030.
“Our ambition is to not only boost Malaysia’s economic stature but also its standings in the Global Competitiveness and Global Opportunity Index to rank among the top 20 by 2030,” Minister Zafrul explained. The strategy also targets a reduction in carbon intensity by 45 percent from the 2021 levels by the end of this decade, moving from a Grade C to a Grade A in the Sustainalytics Rating.