Kuala lumpur: The government is reviewing the implementation of Malaysia's carbon tax in light of the current geopolitical situation, including the war in West Asia, which is exerting cost pressures on industries, the Ministry of Natural Resources and Environmental Sustainability said. Its Minister, Datuk Seri Arthur Joseph Kurup, stated that although the government had planned to implement the carbon tax this year, it understands that industries are now very sensitive to any cost implications, including rising costs of energy, petrol, and diesel.

According to BERNAMA News Agency, Arthur noted that due to the current geopolitical situation, there may be a need to review the timing and extent of the carbon tax implementation. He mentioned this during a media briefing at the International Sustainability Week (ISW) pre-launch event. Despite potential changes to the carbon tax timeline, Arthur assured that the National Climate Change Bill, which includes the carbon tax initiative, is still on track for introduction this year.

Arthur emphasized the importance of establishing a framework to move towards renewable energy and a greener environment, despite the current geopolitical challenges. He highlighted that fossil fuels such as petrol and diesel are finite resources, underscoring the need for a transition to renewable energy.

The government is actively promoting collaborations, introducing industry-leading technologies, and utilizing government incentives to facilitate this transition. Arthur mentioned efforts to encourage the construction industry and others to adopt greener practices through various initiatives and programs aimed at supporting sustainability.

Among these initiatives is the Global Carbon Cities Challenge by the Malaysian Green Technology and Climate Change Corporation (MGTC), which involves industries and local authorities in efforts to reduce carbon emissions. Additionally, programs like ISW are being leveraged to empower industries by introducing relevant technologies and encouraging the use of government incentives.

Arthur also highlighted the allocation of RM419 billion under Budget 2026 for various initiatives, urging industries to utilize available tax incentives. Although there are currently no strict penalties, he indicated that the government will eventually move towards mandating rules and regulations to ensure compliance and set standards.