KUALA LUMPUR: Malaysia will implement its carbon tax in 2026, aligning the initiative with national climate policies and the development of a domestic carbon market, Finance Minister II Datuk Seri Amir Hamzah Azizan announced.
Addressing the Dewan Rakyat during the winding-up of the 13th Malaysia Plan, he said the framework would also consider the government’s ongoing fuel subsidy rationalisation measures.
“The implementation of the carbon tax will be consistent with national climate strategies and the domestic carbon market, while factoring in measures such as the subsidy rationalisation programme already underway,” he said.
Amir Hamzah noted that the carbon tax is designed not only to accelerate industrial decarbonisation but also to shield Malaysia’s exports from potential risks linked to the European Union’s Carbon Border Adjustment Mechanism (CBAM).
The minister added that the government is studying international best practices from countries such as Norway, the United Kingdom, Canada, South Korea, Japan, Singapore and Indonesia, which have either implemented or are in the process of introducing carbon taxes and Emission Trading Schemes (ETS).
The tax, scheduled for rollout next year, forms part of Malaysia’s broader commitment to achieving net-zero emissions by 2050. In its initial phase, it will target the iron, steel, and energy sectors—key contributors to greenhouse gas emissions.
