Kuala lumpur: The government will review the implementation of the proposed carbon tax, taking into account the current economic and geopolitical crises, said Natural Resources and Environmental Sustainability Minister Datuk Seri Arthur Joseph Kurup. He mentioned that the carbon tax, initially planned for introduction this year and targeted at selected industries such as steel, cement, and construction, may be deferred to avoid placing additional burdens on industries and consumers amid current global uncertainties.
According to BERNAMA News Agency, Arthur Joseph emphasized the importance of being in touch with reality and considering the economic and geopolitical situation. He reassured that the government does not want to impose any extra burden on industries or consumers at this time. He spoke about the potential review of the carbon tax implementation during the opening of the Climate Change and Sustainability Conference 2026.
Arthur highlighted that while the Natural Resources and Environmental Sustainability Ministry (NRES) is focused on establishing a framework for carbon trading, the carbon tax falls under the jurisdiction of the Finance Ministry. Close coordination with the Finance Ministry will be necessary for any decision on the tax's implementation.
Despite the review, Arthur urged the industry and society not to use this as an excuse to slow down the climate change agenda. He pointed out the necessity for Malaysia to continue its transition towards a greener economy and the greater use of renewable energy, emphasizing that the timing of implementation is key, rather than its necessity.
Prime Minister Datuk Seri Anwar Ibrahim had previously mentioned plans to introduce a carbon tax for the iron, steel, and energy industries by 2026, as part of Malaysia's efforts to strengthen climate action and support low-carbon economic growth. The recent launch of the National Carbon Market Policy (NCMP) marked a significant step in establishing a national framework for carbon emissions trading, supporting Malaysia's broader climate commitments under international agreements.
The policy aims to ensure carbon credits are measurable, verifiable, and backed by data integrity before the introduction of complementary legislation, including the proposed National Climate Change Bill. Arthur also mentioned the establishment of a national carbon registry to facilitate measurement, pricing, and future international carbon trading.
Regarding Sabah and Sarawak's separate carbon-related laws and policies, Arthur stated that the federal government would focus on harmonization to align state-level frameworks with national policies and international reporting obligations. A special committee will be set up to discuss coordination with the Sarawak government, with positive feedback received from both Borneo states.
Arthur concluded by emphasizing the importance of synchronization, as the central government is responsible for reporting international commitments to the UNFCCC and Paris Agreement.