Institute of Democracy and Economic Affairs (Ideas), in a Politics paper This carbon price issued last week said that this carbon price will make low -carbon steel production commercially in the country. Carbon price of 2000 Malaysian Rangeette by 2030, the costs of producing heavy smelting oven for emissions, which currently represent 70 percent of local production, will increase by about 11 percent, making low -carbon steel more competitive. Sol partners are dependent on carbon fuel sources, especially coal.

Ideas Previously proposed Carbon pricing as an applicable solution to reduce emissions in the fast steel industry in Malaysia. Globally, the sector represents about 8 percent of annual greenhouse gas emissions. While many countries are heading towards the EAF electric arc oven techniques, Malaysia’s growth on coal-based oven factories (BF-Bof) may dominate. The report indicated that many of this expansion is driven by Chinese investments, as China -backed new fennel factories in Malaysia and through Southeast Asia are exacerbated.

Between 2014 and 2022, steel production in Malaysia has moved from 100 percent of the son -in -law to 70 percent (BF), which increases the intensity of carbon emissions from about 0.4 to 1.7 tons of carbon dioxide per ton of steel, which undermines the pure goal in Malaysia and the sector is best to new commercial measures such as carbon adaptation mechanics in the European Union (CBAM).

This trend undermines the net zero in the country and exposes the industry to new trade measures such as the mechanism of carbon border modification in the European Union (CBAM), while also reducing competitiveness.

In the budget of Malaysia 2025, which was presented in October last year, the government suggested providing carbon tax in sectors that are difficult in 2026.

The proposed tax is said to affect the construction sector more than others, with costs from 3.5 to 4.6 percent. This is because steel is a large part of construction costs and the sector depends on relatively low -degree steel with the severity of similar emissions to higher grades. Most steel in the construction field is also produced locally with narrow profit margins, which doubles this risk.

Data from Malaysian Steel Institute (MSI) also showed that emissions of steel production reached 12228 GHg of carbon dioxide (GGCO2E) in 2019, by 370 percent of 2,593ggco2E in 2011.

Now that the government is seriously thinking to The assistant professor at the Asian College of Business, Dr. Renato Lima de Olivira, who participated in the composition of the ideas report, said that the adequate carbon price can convert the steel sector in Malaysia into low emissions, that the price of the higher carbon enough can convert the steel sector in Malaysia into low emissions, the higher carbon price enough can transform the steel sector in Malaysia into low emissions, the higher carbon price enough can convert the steel sector in Malaysia into low emissions, the higher carbon price enough can convert the steel sector in Malaysia into low emissions.

He said: “It can open the door for new technologies, reduce exposure to emerging trade restrictions and safe access to markets that are quickly transferred to Decibons.”

He added that the carbon tax can generate up to 3 billion Malaysian Rangeett ($ 711 million) in government revenue annually, which can then be reinforced as targeted discounts for low support for carbon and investment of carbon technologies For steel and consumers.

This would also support net zero in industry while ensuring fair treatment of local products and imports under international trade rules.

However, the report warned that direct carbon tax may face political resistance. He said that the low carbon price may act simply as a consumption tax, which leads to increased costs without paying the investment to cleaner technologies, as companies are likely to transfer the burden on consumers or reduce production.

Instead, he suggested that the ETS trading system will provide greater flexibility for companies to adapt to carbon pricing by compensation for credits or trading, allowing them to reduce emissions at a lower cost and provide long -term signals clearer to investors within a stable -based framework.

Ideas were recommended to enter pricing in stages but quickly to pricing carbon at the specified rate, which was implemented through the ETS framework designed about the sectoral needs in Malaysia. Without such intervention, she said that the path of emissions for the country’s steel sector will remain perceived by national goals and expose the sector to increasing risks, in the end they fail to move forward in other countries.

She also warned that failure to work may leave heavy steel producers who face higher costs and reduce access to international markets that require low carbon products and operations.