KUALA LUMPUR: Malaysia has set its sights on making the steel industry fully green by 2050 with the launch of a roadmap to tackle overcapacity, import dependence and carbon emissions.
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the Steel Industry Roadmap 2035 (SIR2035) provides a pathway to stabilise, restructure and transform the sector in line with the New Industrial Master Plan 2030, the National Energy Transition Roadmap and Net Zero aspirations.
He said the roadmap outlines 15 strategies across three phases – stabilisation, transformation and full transition.
In the next two years, the focus will be on managing overcapacity, restructuring licensing frameworks, enforcing discipline against illegal operators, securing domestic raw materials and laying the foundation for decarbonisation.
From 2027 to 2035, efforts will shift to accelerating carbon mechanisms, developing low-carbon production infrastructure and standards, and reinvesting in new technologies.
Beyond 2035, the goal is a fully green steel sector by 2050, mobilising talent and capital to ensure the industry remains competitive, resilient and aligned with Net Zero commitments.
Tengku Zafrul described SIR2035 as “not only a policy document, but also a national contract for a sustainable future and the socio-economic wellbeing of future generations”.
He said Asean is grappling with an oversupply in long steel products while remaining heavily import-dependent in flat steel products.
“This imbalance distorts our markets and creates an excessive burden on Asean’s steel industry. These challenges are further compounded by new regulatory measures on decarbonisation and green steel obligations, as well as unfair practices such as dumping and transhipment.
“The tariff burden, including the US Section 232 tariff on steel and aluminium, will also have serious implications for major Asean producers,” he said at the opening ceremony of the Asean Policymakers Conference on Steel and 2025 Asean Iron and Steel Forum yesterday.
The event, which saw the launch of SIR2035, was held in collaboration with the South-East Asian Iron and Steel Institute (Seaisi).
Also present were Deputy Investment, Trade and Industry Minister Liew Chin Tong and Seaisi chairman Datuk Lim Hong Thye.
Tengku Zafrul also noted that apparent steel consumption in the Asean-6 reached 74 million tonnes in 2023, close to the pre-pandemic peak of 80 million tonnes, with demand projected to hit 80 million tonnes by 2025.
“Globally, there is more than 600 million tonnes of excess steelmaking capacity, much of it seeking Asean markets,” he said.
On Malaysia’s outlook, Tengku Zafrul said upstream capacity could reach 40.8 million tonnes by 2030, while domestic demand is only 14.7 million tonnes.
“This gap highlights overcapacity, assets underutilised, poor return on investments and weakening competitiveness and resilience,” he said.
“As one of Malaysia’s most carbon-intensive industries, steel also exposes the nation to regulatory market barriers, making decarbonisation a necessity.”
He also proposed a regional cooperation framework including establishing an Asean database on capacity and utilisation, as well as developing a common decarbonisation pathway with full MRV (monitoring, reporting and verification) and EPD (environmental product declarations), along with harmonised green steel standards.
