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Malaysia to introduce carbon tax in 2026, targeting steel industry

Малайзия введет налог на выбросы углерода в 2026 году, ориентируясь на сталелитейный

During the 2026 budget session, the Malaysian government confirmed plans to introduce a carbon tax next year in line with its commitment to creating a low-carbon economy and achieving net zero emissions by 2050.

The initiative will start with sectors that produce the highest emissions, iron and steel and energy. The Ministry of Finance will finalize the tax rate and mechanism in coordination with other departments.

Carbon tax revenue to support energy transition

Receipts from the carbon tax will go into the National Energy Transition Fund, which has been allocated RM150 million ($35.46 million) for 2026.

The fund will finance projects in renewable energy, green infrastructure and industrial decarbonization initiatives under the National Energy Transition Roadmap (NETR).

The budget also highlights the need to support energy-intensive industries, including steel, cement and petrochemicals, to adopt cleaner and more efficient technologies.

Expanding renewable energy capacity

Under NETR, Malaysia aims to increase its share of renewable energy to 70 percent by 2050.

Major programs include:

  • Large-Scale Solar 6 (LSS 6), adding 2 GW of solar power with RM 6 billion ($1.42 billion) private investment.
  • Corporate Renewable Energy Scheme, which is expected to mobilize RM3.5 billion ($827.43 million) in clean energy investment.

These initiatives



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