Legislation Updates

Carbon Capture, Utilization and Storage Act 2025

9 May 2025 Act 870 – Carbon Capture, Utilization and Storage Act 2025 has come into operation on 9 May 2025 (save for Part VII (Assessment and Permanent Storage in Onshore Areas)). The Act establishes

9 May 2025

Act 870 – Carbon Capture, Utilization and Storage Act 2025 has come into operation on 9 May 2025 (save for Part VII (Assessment and Permanent Storage in Onshore Areas)).

The Act establishes the first comprehensive legal framework for the capture, transportation, utilisation, and permanent storage of carbon dioxide (CO₂) within Malaysia.

Key Features of the CCUS Act 2025

  • Regulatory Framework & Oversight

The Act applies to Peninsular Malaysia and the Federal Territory of Labuan and establishes the Malaysia Carbon Capture, Utilization and Storage Agency to oversee licensing, enforcement, monitoring and policy direction.

  • Mandatory Registration Regime

All operators involved in the capture, transportation, and utilisation of CO₂ must be registered with the Agency. Locally captured CO₂ may be used for approved purposes, while imported CO₂ may only be brought into Malaysia for permanent storage and not for utilisation.

  • Import Controls

Importation of CO₂ requires a permit from the Agency, subject to strict acceptance criteria and limited exclusively to permanent storage. Contravention may attract fines up to RM1 million and/or five years’ imprisonment.

  • Two-Tier Licensing Framework

Companies intending to explore or operate CO₂ storage sites are subject to a two-stage licensing system:

  1. 1. Assessment Permit – required to assess and characterise potential storage sites.
  2. 2. Storage Licence – required to operate and manage the injection and storage of CO₂, either offshore or onshore.
  3.  
  • Operational & Post-Closure Obligations

Operators must comply with monitoring, reporting, and remediation requirements and contribute to a Post-Closure Stewardship Fund for long-term monitoring after site closure.

  • Offshore Permit and Licensing Regulations 2025

The subsidiary regulations provide detailed procedures for offshore permits and licences, including application requirements, technical and financial criteria, monitoring and reporting duties, and closure obligations. Offshore assessment permits are valid for up to three years, while storage licences confer exclusive operational rights subject to strict compliance conditions.
Click here for the : Carbon Capture, Utilization and Storage Act 2025.