Benefits and impact of carbon tax in Malaysia

MALAYSIA aims to reduce its intensity of greenhouse gas emissions by 45% by 2030 against its 2005 levels. So far, 37.1% of that target has been achieved.

Under Budget 2026, the government had planned to introduce a national carbon tax on the energy, iron and steel sectors as parts of efforts to reach its GHG reduction target. However, in April this year, that plan was put on hold with the government citing the Middle East conflict and the risks of adding extra financial burdens to businesses and households.