CCUS Development in Malaysia

By Zaharin Zulkifli, Deputy Director, Energy Data and Research Unit, Strategic Planning and Communication Department, Energy Commission of Malaysia - ACN Advisory Member
29 September 2022

Malaysia commits to be a carbon-neutral nation by 2050. During COP 26, Malaysia submitted its revised NDC in July 2021. Malaysia increased its mitigation ambition with an unconditional target to cut carbon intensity against GDP by 45% by 2030 compared to 2005 levels. In the first NDC, the unconditional emissions reduction target was 35%, with an additional 10% being conditional on external support. Moreover, the revised NDC covers seven greenhouse gases, compared to the first NDC which only covered three. The country also expanded the adaptation component, with a particular focus on protecting biodiversity and mainstreaming climate resilience into urban planning. Comprehensive sector-based projections and multi-stakeholder consultations with the public sector, private sector, civil society, and youth groups were done to provide inputs to the NDC revision process. A National Adaptation Plan and NDC Roadmap will be developed to help achieve NDC targets.

Later in September 2021, the Prime Minister of Malaysia announced that Malaysia is committed to its target of becoming a carbon-neutral nation by as early as 2050. The announcement was made during his speech when tabling the 12th Malaysia Plan (12MP) 2021-2025 in Parliament. To support this effort, economic instruments such as carbon pricing and the carbon tax will be introduced. Moreover, the government has given the commitment to stop building new coal-fired power plants.

On 19 September 2022, the National Energy Policy 2022-2040 was launched by the Prime Minister of Malaysia. This new energy policy will help the country achieve net zero greenhouse gas emissions (GHG) in 2050, as it faces the challenges of energy transition and climate change. The aspiration has nine targets to be achieved by 2040, among them being shared were the mode of public transport of 50%, the use of electric vehicles (EVs) of 38%; the use of the B30 mixed fuel for heavy vehicles as an alternative fuel, as well as energy savings of 11% for industry and commercial use and 10% for residential use. For the first time in Malaysia's energy policy document, Under Chapter 2.4: Capitalising Emerging Technologies, CCUS was mentioned as one of the technologies to drive efficiency in operations, especially in the oil and gas sector. This indicates that Malaysia Government fully supports implementing this CCUS technology in our country.  

Driven by the government initiative on CCUS technology under the new energy policy, the national oil and gas company, PETRONAS is employing CCS technology in their high CO2 fields. They aim to further capture and store CO2 emissions while maturing technologies for onshore processing plants to utilise and convert CO2 into valuable products. The Kasawari Integrated Offshore High Contaminant project, a CCS project off the coast of Sarawak, is a strategic project, which is part of the PETRONAS Carbon Commitment and GHG emissions reduction efforts. The first injection of CO2 is planned for COD by the end of 2025. Once in operation, the project is expected to reduce CO2 volume emitted via flaring by 76 million metric tonnes with an annual average of 3.7 million metric tonnes per annum (mtpa), making it one of the largest CCS projects in the world.

In August this year, Tenaga Nasional Berhad (TNB), the main utility company in Malaysia intends to work with PETRONAS on joint feasibility studies in carbon capture. The decarbonization effort would be achieved mainly through a collaborative study to develop CCS technology, leveraging both organizations’ technical expertise and resources. Both TNB and PETRONAS have signed a memorandum of understanding (MOU) to strengthen collaboration in driving innovative solutions toward decarbonization, making it a historical milestone in supporting Malaysia’s aspiration to be a carbon-neutral nation by 2050.  

As for now, Malaysia does not have any specific policy or regulation on CCUS technology that can be implemented in the country. However, the Government will always support any initiative that can reduced carbon emissions to become a carbon-neutral nation as early in 2050. As CCUS still a new technology, Malaysia is hoping to gain as much as possible knowledge and capacity building in this area. International cooperation such as Asia CCUS Network will become a good platform for Malaysia to learn from others.