Carbon Tax Delayed, Carbon Credits First: Malaysia Announces National Carbon Market Policy
Malaysia announced its National Carbon Market Policy, aiming to transition to a low-carbon economy. The government will prioritize establishing a robust carbon credit system and has postponed the implementation of a carbon tax due to economic considerations.
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- 📰 Published: April 23, 2026 at 16:15
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(Central News Agency, Kuala Lumpur, 23rd, Comprehensive Foreign Report) The Malaysian government has issued a national carbon market policy, hoping to regulate carbon trading activities while helping the country transition to a low-carbon economy.
According to "Free Malaysia Today" (FMT), Arthur Joseph Kurup, Deputy Minister of Natural Resources and Environmental Sustainability, stated that the related policies will cover both "voluntary carbon markets" and "mandatory carbon markets," with the goal of making Malaysia a credible participant in international carbon trading.
Speaking at the "Climate Change and Sustainability Conference 2026" on the 21st, he said: "To support these systems, we are strengthening the carbon market architecture and related ecosystem, ensuring that every ton of emission reduction or traded carbon credit possesses integrity and transparency."
This national carbon market policy is part of the "National Climate Change Policy 2.0" passed by Malaysia in September last year.
Kurup said: "We hope this policy will make the entire climate-related industry ecosystem complete and complementary, and promote active participation from both public and private sectors."
He also mentioned that coordination between the federal government and the states is crucial, noting that Sabah and Sarawak have already introduced their respective carbon credit policies. He reiterated that the government will set up a special joint committee to streamline and coordinate policy regulations across different administrative regions.
Regarding the "carbon tax" issue that the public has been paying attention to, Kurup stated that considering the current economic and geopolitical environment, the carbon tax, which was originally planned to be rolled out as early as this year, will not be implemented on schedule and is still under evaluation.
He emphasized that the government will prioritize the establishment of a fully functional "carbon credit system" before considering the introduction of a carbon tax, to ensure that industries are not treated unfairly.
The carbon credit market is generally divided into two types: mandatory and voluntary carbon markets. The former is led by the government, which adopts a cap-and-trade system. It sets free emission allowances for regulated heavy emitters. Those exceeding their quota must buy allowances from other companies, while entities that successfully reduce carbon emissions can sell their unused quotas to others.
In the voluntary carbon market, businesses or institutions apply for and execute carbon reduction projects (such as afforestation, energy conservation, etc.). The resulting points (also known as carbon credits) are sold on the carbon market, where buyer companies or institutions can purchase them to offset their own emissions. The voluntary carbon market mainly serves as a supplementary mechanism to the mandatory market. (Translation: Chen Yi-Wei) 1150423
According to "Free Malaysia Today" (FMT), Arthur Joseph Kurup, Deputy Minister of Natural Resources and Environmental Sustainability, stated that the related policies will cover both "voluntary carbon markets" and "mandatory carbon markets," with the goal of making Malaysia a credible participant in international carbon trading.
Speaking at the "Climate Change and Sustainability Conference 2026" on the 21st, he said: "To support these systems, we are strengthening the carbon market architecture and related ecosystem, ensuring that every ton of emission reduction or traded carbon credit possesses integrity and transparency."
This national carbon market policy is part of the "National Climate Change Policy 2.0" passed by Malaysia in September last year.
Kurup said: "We hope this policy will make the entire climate-related industry ecosystem complete and complementary, and promote active participation from both public and private sectors."
He also mentioned that coordination between the federal government and the states is crucial, noting that Sabah and Sarawak have already introduced their respective carbon credit policies. He reiterated that the government will set up a special joint committee to streamline and coordinate policy regulations across different administrative regions.
Regarding the "carbon tax" issue that the public has been paying attention to, Kurup stated that considering the current economic and geopolitical environment, the carbon tax, which was originally planned to be rolled out as early as this year, will not be implemented on schedule and is still under evaluation.
He emphasized that the government will prioritize the establishment of a fully functional "carbon credit system" before considering the introduction of a carbon tax, to ensure that industries are not treated unfairly.
The carbon credit market is generally divided into two types: mandatory and voluntary carbon markets. The former is led by the government, which adopts a cap-and-trade system. It sets free emission allowances for regulated heavy emitters. Those exceeding their quota must buy allowances from other companies, while entities that successfully reduce carbon emissions can sell their unused quotas to others.
In the voluntary carbon market, businesses or institutions apply for and execute carbon reduction projects (such as afforestation, energy conservation, etc.). The resulting points (also known as carbon credits) are sold on the carbon market, where buyer companies or institutions can purchase them to offset their own emissions. The voluntary carbon market mainly serves as a supplementary mechanism to the mandatory market. (Translation: Chen Yi-Wei) 1150423