Malaysia’s parliament fast-tracked and passed the Carbon Capture, Utilisation and Storage (CCUS) Bill, at its third reading on March 6. The Upper House passed the bill on March 25. The goal is to regulate carbon capture and storage activities in Peninsular Malaysia and Labuan, while hoping to rake in major investments and boost economic growth.
The legislation promises to curb carbon emissions and tackle climate change head-on. But beneath the surface, it could be little more than layer of greenwashing with little real impact.
The passing of the bill opens the door for the construction and operation of CCUS facilities across Peninsular Malaysia, allowing COâ‚‚ to be trapped and stored underground. The government is banking big on this, expecting the industry to pull in more than US$200 billion (A$3.1 billion) in investments over the next 30 years and create 200,000 jobs by 2050.
But not everyone is buying the hype. Environmental groups like the Gabungan Darurat Iklim Malaysia (GDIMY) are waving red flags. The bill was rushed through Parliament with minimal public consultation.
There’s also growing unease that Malaysia could end up as the world’s carbon dumping ground. BAKO (the Environmental, Climate Crisis & Indigenous Peoples Bureau) of the Socialist Party of Malaysia (PSM) has called for the bill to be re-examined and debated more thoroughly in Parliament before being rushed into law. Malaysia might just become a convenient backyard for wealthy nations to bury their carbon mess.
Kasawari, Lang Lebah
Malaysia has already jumped onto the CCUS bandwagon with two major projects off the coast of Sarawak: Kasawari and Lang Lebah.
The Kasawari Project, located about 200 kilometres offshore from Bintulu in the Kasawari gas field, marks a national first. Operated by Petroliam Nasional Berhad (Petronas), this facility is Malaysia’s pioneering CCUS development. Backed by a hefty investment of around RM4.5 billion (A$1.5bn), the project aims to capture up to 3.3 million tonnes of CO₂ annually making it one of the largest CCUS initiatives in the region.
The first gas production from Kasawari was slated to begin in 2023.
The Lang Lebah Project is based in the gas field within Block SK410B, near the waters of Sarawak. Initially spearheaded by Thailand’s PTTEP in collaboration with Petronas, it was projected to kick off operations in 2027, with an ambitious production capacity of up to one billion cubic feet (1.05 petajoules) of gas per day. However, PTTEP pulled the plug on several major tenders in February, throwing the project’s future into uncertainty.
Nature has its own carbon capture system; photosynthesis, where plants absorb CO₂. That’s why protecting and restoring forests is critical. But tree planting alone won’t cut it. For instance, turning carbon-rich peat forests into palm oil plantations releases massive amounts of stored CO₂. And while planting trees sounds like a solution, saplings take time to mature, far too slow to offset the rapid pace of human-driven emissions. In short, we’re emitting CO₂ faster than nature or even forests can soak it up.
Malaysia contributes around 0.72% of global COâ‚‚ emissions, ranking it as the 23rd largest emitter worldwide. While that might seem like a drop in the carbon bucket, it still matters a lot. In the fight against climate change, every percentage point counts.
If Malaysia can significantly cut its emissions especially in collaboration with other developing nations within ASEAN, it could spark a regional momentum and apply much-needed pressure on developed countries to follow suit. Malaysia’s carbon policies should embrace the spirit of internationalism: shared responsibility, regional cooperation, and global solidarity.
Inefficient, unreliable
While CCUS is often hailed as the poster child of modern climate solutions, the reality is far more complicated. It’s a costly technology, and many pilot projects around the world have fallen short of their promised efficiency. The existence of CCUS is increasingly being used as an opportunity for fossil fuel companies to continue pollute.
Isn’t it far more logical and sustainable, to cut emissions at the source, rather than rely on costly post-release technology as a band-aid?
The Global CCS Institute, an Australia-based organisation that actively promotes CCUS development worldwide, often claims that carbon capture rates can hit 90% or higher. But those numbers are typically drawn from highly controlled, best-case scenarios, like the Sleipner project in Norway. There, nearly 1 million tonnes of COâ‚‚ are captured annually, with offshore gas processing achieving around 90% efficiency.
Why was Sleipner so successful? It’s a medium-scale project, relatively easy to monitor and control, with ideal underground geology for CO₂ storage. On top of that, Norway’s carbon tax policies gave investors extra motivation to make it work.
But zoom out, and the picture gets much murkier. A 2020 study by the Massachusetts Institute of Technology found that most CCUS projects, especially in the power generation sector, achieved far lower carbon capture rates due to technical and economic barriers. By 2022, the Institute for Energy Economics and Financial Analysis (IEEFA) reported that the average global COâ‚‚ capture rate for operational CCUS projects was just 49%.
Scaling up CCUS varies widely across industries, and in non-gas sectors, the carbon capture rate tends to be much lower. What’s more, 20–30% of a project’s energy output is often consumed just to capture the CO₂; dramatically reducing overall system efficiency.
High operational expenses make many projects economically fragile. When oil or gas prices dip, CCUS facilities like Petra Nova become financially unsustainable, leading to shutdowns or scaled-back operations.
Malaysia’s tropical climate and monsoon floods introduce a whole new set of challenges. Flooding can destabilise CO₂ storage sites and damage pipelines, raising serious concerns about long-term containment. On top of that, CCUS demands constant monitoring and high-intensity maintenance. For developing countries like Malaysia, where disaster management capacity is limited, this poses a real risk.
[This is an abridged and updated version of an article that originally appeared in . Suresh Kumar is a member of the PSM’s Central Committee.]