KUALA LUMPUR: Malaysia’s robust regulatory framework and fiscal incentives for carbon capture, utilisation and storage (CCUS) are making it more attractive for near-term investments and project development.
BMI, a Fitch Solutions company, noted that Malaysia’s CCUS Act 2025 provides unified coverage of the full value chain, outlines explicit provisions for cross-border carbon dioxide (CO2) imports, establishes a central regulatory body (MyCCUS) and streamlines permitting processes.
Additionally, the country’s fiscal regime includes a 100 per cent investment tax allowance for 10 years, duty exemptions, and clear tax deductions, supporting early project bankability.
"We believe Malaysia holds a near-term advantage due to its comprehensive and investor-friendly regulatory framework,” it said in a note on Thursday.
Regionally, BMI pointed out that both Malaysia and Indonesia are accelerating the deployment of the CCUS technology.
"Malaysia’s strategy of focusing on dedicated storage, supported by clear legal provisions for cross-border CO2 import and robust fiscal incentives, aligns more closely with international standards and market expectations for permanence and transparency,” it said.
Moving forward, BMI expects Malaysia and Indonesia to start bringing CCUS capacity online from 2027, reaching 3.3 to 4.2 million tonnes per annum (Mtpa) of captured CO2 by 2034. - Bernama
