Malaysia launches national carbon market policy

Natural resources and environmental sustainability minister Arthur Joseph Kurup said the policy will cover both voluntary and compliance carbon markets, aiming to make Malaysia a credible participant in international carbon trading.

“To underpin these systems, we are strengthening our carbon market framework and ecosystem, backed by data, to ensure that every tonne of carbon reduced or traded is backed by integrity and trust,” he said in his speech at the Climate Change and Sustainability Conference 2026 today.

The policy is part of the National Climate Change Policy 2.0, approved last September.

Arthur said the government was moving beyond commitments towards implementation.

“We hope that this policy will shape our climate ecosystem to become more complete and complementary, with active participation from the private and public sectors.”

At a press conference later, Arthur said coordination between the federal government and states would be important. Both Sabah and Sarawak have already introduced their own carbon-related policies, he added.

He reiterated that a special joint committee would be established to streamline policies across jurisdictions.

Arthur also said the proposed carbon tax, initially expected as early as this year, is still under review due to current economic and geopolitical conditions.

He said Putrajaya would prioritise building a functioning carbon credit system before introducing any form of carbon tax to ensure industries are not unfairly penalised.

He said they needed to set up a framework for carbon credit before they could introduce the penalty tax.

Arthur said the tax falls under the jurisdiction of the finance ministry.

The government also does not want to impose additional burdens on industries or consumers at this time, he added.