PETALING JAYA: The new carbon tax announced in Budget 2025 is the call by the government to the oil and gas services and equipment (OGSE) industry to be part of the energy transition to a low-carbon economy, says the Malaysia Petroleum Resources Corporation (MPRC).
MPRC said the extension of tax exemptions and incentives under the Green Income Tax Exemption (GITE) and Green Investment Tax Allowance (GITA) programmes were also incentives for the OGSE industry to scale more renewable energy and reduce dependence on fossil fuels.
(The National Energy Transition Roadmap (NETR) aims to achieve net-zero emissions by 2050 to tackle climate change.)
In a statement yesterday, MPRC president Mohd Yazid Ja’afar said that the introduction of the Carbon Tax under Budget 2025 is timely for the OGSE industry to move higher up the green value chain.
The green value chain is the concept of incorporating environmental considerations and sustainability principles into economic activities to reduce negative impacts on the environment.
On Friday, during the tabling of the Budget 2025, the Prime Minister Datuk Seri Anwar Ibrahim said carbon tax will be introduced on the iron and steel, and energy industries by 2026, to encourage the adoption of low-carbon technologies.
Anwar said that the proceeds will then be used to fund green research and technology programmes.
Mohd Yazid said that the carbon tax is “a bold but necessary regulatory move to speed up the adoption of low-carbon solutions like Carbon Capture, Utilisation and Storage (CCUS) in Malaysia ahead of the tabling of the CCUS Bill in November this year.
“The increase in the National Energy Transition Fund, from RM100mil to RM300mil demonstrates the government’s clear intent to accelerate the energy transition.
“This significant allocation highlights a serious commitment to scaling up renewable energy and reducing dependence on fossil fuels, clearly signalling to OGSE companies which form the oil and gas supply chain to rise to the demands of a low-carbon economy,” he said.
