KUALA LUMPUR, March 13 — The National Climate Change Bill (RUU PIN) will introduce a monitoring, reporting and verification (MRV) system as the main basis for the implementation of a carbon pricing mechanism and Malaysia’s transition towards a low-carbon economy.
The Ministry of Natural Resources and Environmental Sustainability (NRES) said the MRV system has a uniform methodology for calculating greenhouse gas (GHG) emissions across economic sectors to ensure transparency and validity of data as well as the formation of a national carbon registry with integrity.
“MRV is an important foundation for the implementation of carbon pricing instruments as it ensures that pricing is based on actual emissions data,” the ministry said in a reply to the Dewan Negara posted on the Parliament website today.
The ministry was responding to a question from Senator Tan Sri Low Kian Chuan who wanted to know how the RUU PIN would enable carbon pricing and the transition to a low-carbon economy across other sectors of the economy.
NRES said that based on the MRV basis, the government will implement a carbon tax starting in 2026 with an initial focus on the energy, iron and steel sectors.
“The implementation of this carbon tax will be aligned with the National Carbon Market Policy as well as provisions under the RUU PIN to ensure policy uniformity and implementation efficiency.
“The introduction of a carbon tax at this stage will provide a clear signal to high-carbon-intensive sectors to improve efficiency and shift to low-carbon technologies,” the ministry added.
The ministry said the RUU PIN also provides the legal basis for the implementation of the Emissions Trading Scheme (ETS) in the next phase, when the MRV system and domestic carbon market ecosystem have matured.
It said the ETS will enable emission limits to be set for specific sectors and provide compliance flexibility through cost-effective emission allowance trading.
“In addition, the RUU PIN will also regulate the carbon market for compliance, including the use of carbon credits to meet emission reduction obligations.
“This provides additional options for sectors that find it difficult to reduce emissions directly, without affecting the country’s GHG emission reduction targets,” it said.
NRES said the drafting of the RUU PIN allows for the implementation of carbon pricing to be implemented in a phased and structured manner, starting with the development of an MRV system before other instruments such as carbon taxes and carbon market mechanisms are introduced.
Meanwhile, on Low’s question regarding the latest developments and the timeline for tabling the RUU PIN, the ministry said the Bill is currently undergoing a final review process by the Attorney General’s Chambers (AGC) to ensure that it is in order from a legal perspective and in line with the policy decisions agreed upon by the Cabinet on June 11, 2025.
“The ministry intends to table the RUU PIN and the RUU Iklim in the Second Sitting of the Fifth Term of the 15th Parliament,” it said. — Bernama
Malay Mail – Malaysia
