KUALA LUMPUR (March 6): The Dewan Rakyat on Thursday approved a proposed legislation to regulate carbon capture and storage (CCS) activities in Peninsular Malaysia and Labuan.

The Carbon Capture, Utilisation, and Storage Bill 2025 (CCUS Bill 2025) was passed via a majority voice vote, following debates involving 11 members of Parliament (MPs).

Comprising 10 parts and 53 clauses, the bill outlines the responsibilities of storage site operators in environmental protection, risk management and liability, to ensure safe, responsible and internationally compliant CCUS operations.

Among its key provisions, the bill proposes the establishment of the Malaysian Carbon Capture, Utilisation, and Storage Agency, which will oversee licensing, compliance, and industry development, while ensuring the safe capture, transportation, utilisation, and permanent storage of carbon.

Under the new framework, carbon capture facilities must be registered, and operators are required to obtain permits for both offshore and onshore carbon storage sites. Strict monitoring and safety protocols will be enforced to prevent leaks and environmental damage.

Notably, the bill excludes Sabah and Sarawak — two East Malaysian states with significant offshore hydrocarbon basins, which could serve as potential carbon storage sites.

In his winding-up speech, Economy Minister Datuk Seri Rafizi Ramli said the government aims to gazette the bill by March 31, to secure long-term investment opportunities.

“The tender for carbon storage is currently ongoing. If Malaysia cannot enforce this by March 31, we will be out — we cannot enter the bid,” Rafizi said.

Additionally, he noted that several potential customers have already expressed interest in transporting carbon dioxide to CCS hubs offshore of Kerteh, Terengganu, as well as Kuantan, Pahang, along Peninsular Malaysia’s east coast.

“The agreements will be signed soon. That is why we must ensure this CCUS Bill (2025) is enforced by March 31,” he added.

Following its passage in the lower house, the CCUS Bill 2025 will now be referred to Dewan Negara for debate and voting, before being presented to the King for royal assent and gazettement into law.

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