Kota kinabalu: The recent approval of the Climate Change and Carbon Governance Enactment 2025 by the Sabah State Assembly has paved the way for the state to attract investors in the burgeoning carbon market, announced Chief Minister Datuk Seri Hajiji Noor. This legislative move marks a significant advancement for Sabah, setting the stage for enhanced economic and environmental sustainability.
According to BERNAMA News Agency, the enactment has initiated the creation of the Sabah Climate Action Council, a Climate Fund, and a state-level emissions inventory. It also establishes a framework for benefit-sharing, particularly with indigenous communities, and legally affirms carbon rights as belonging to the state government. These developments provide the legal foundation and investor confidence necessary to attract capital to Sabah’s carbon market.
“This legal foundation gives investors the certainty they need. But the bigger opportunity lies in ASEAN cooperation. To grow this space, we need a functioning regional carbon market with common standards, regulatory alignment, and mutual recognition of credits across borders,” said Hajiji. He emphasized Sabah’s readiness to collaborate with other ASEAN nations to advance this agenda during a speech delivered by Sabah Finance Minister Datuk Seri Masidi Manjun at the ASEAN Sustainable Forestry Summit 2025.
Hajiji also underscored Sabah’s status as a net sink jurisdiction, contributing about 36 percent of Malaysia’s carbon sequestration. He described this capability as “a strategic economic asset” in a world increasingly constrained by carbon emissions. The state launched the Forest Plantation Development Action Plan in 2022, a 15-year strategy to rehabilitate 400,000 hectares of degraded forest. This initiative is projected to add more than RM11 billion to Sabah’s GDP and create 40,000 jobs.
Additionally, timber remains a key sector for Sabah. Timber royalties are expected to rise to RM171 million in 2024, with export volumes increasing, particularly to Japan, the United States, and Taiwan. As Malaysia’s leading producer of crude palm oil, accounting for over 25 percent of national output, Sabah is also drawing investments in downstream processing, biofuels, and palm-based innovation.
“Forestry and climate are now at the core of economic strategy for Sabah, for Malaysia and ASEAN. We are no longer treating sustainability as optional. It is part of how we create jobs, attract investment, and strengthen resilience,” Hajiji noted.
The ASEAN Sustainable Forestry Summit, organized by the KSI Strategic Institute for Asia Pacific and the ASEAN Economic Club, gathers policymakers, business leaders, and environmental experts across Southeast Asia to address sustainable forestry and climate resilience.