Malaysia: Public consultation on the proposed Climate Change Bill (RUUPIN)

In brief

Malaysia is slated to have a comprehensive framework to regulate, implement and enforce actions/initiatives that is aimed to lead towards a low-carbon economy. The Ministry of Natural Resources and Environmental Sustainability (NRES) is leading the initiative for the proposed enactment of the Climate Change Act by issuing a consultation paper to obtain comments and feedback.

The introduction of a Climate Change Act is the result of Malaysia's determination to honour its commitment under the Paris Agreement and also to reduce greenhouse gas emissions in Malaysia.


Contents

In more detail

There is currently no specific legislation addressing climate change in Malaysia. The NRES has been mandated to lead in the promulgation of a legislation that is intended to address all issues related to climate change and to enhance Malaysia's climate change governance at both international and domestic levels.

As part of the process of developing and drafting the Climate Change Bill, NRES is seeking comments and feedback from the public to ensure that the legislation holistically addresses the relevant issues and would be proportionate to the result and outcome.

The full version of the Consultation Paper can be viewed here.

Salient proposed provisions

We have summarised below the provisions under the proposed Climate Change Bill.

  • Greenhouse Gas Emissions (GHG) Target

There will be national targets for GHG emissions reductions.

  • Establishment of a New Regulatory Entity

A Regulatory Entity will be established to administer, implement and enforce the requirements under the legislation.

  • National Integrated Climate Data Repository (NICDR)

The NICDR shall serve as an integrated platform for monitoring, storing, analyzing climate actions and data.

  • The Regulation of Carbon Trading Mechanism

There will be mechanisms to enable carbon trading and in tandem, regulate the matters related to Internationally Transferred Mitigation Outcomes (ITMOs). This will also lead to the establishment of a domestic emissions trading scheme (ETS).

  • Financial provisions

A National Climate Fund will be established to support national climate change initiatives and operations of the Regulatory Entity. The Fund will, at the outset, be funded through national budget allocation, administration and registration fees imposed to participate in carbon trading platforms, accreditation fees for carbon project related service providers, consultancy/advisory/training fees, international financing, philanthropy.

  • Reporting

There is intended to be mandated reporting of GHG emissions and other data for purposes of Malaysia's international reporting obligation at the national, sub-national or state and facility level.

  • Compliance and Enforcement

The proposed Climate Change Bill aims to include essential compliance mechanisms to ensure effective implementation. The Regulatory Entity would have the authority to enforce penalties, including fines and imprisonment.

Implications

While we do not expect the Climate Change Act to apply to the majority of the industries and business communities in Malaysia, it is expected to have huge impact on the major industries that emit greenhouse gases such as the electricity, oil and gas and manufacturing industries. Companies who are subjected to the Climate Change Act should take this opportunity to review the Climate Change Bill to get a head start in implementing policies to reduce their own greenhouse gas emissions. Interested parties are also encouraged to provide their views and comments on the draft Climate Change Bill for NRES' consideration so that the Climate Change Act is robust enough to ensure the objectives of the Government are achieved while at the same time ensuring no material long term adverse impact on the economy.

* * * * *

LOGO Malaysia_Wong & Partners_KualaLumpur

© 2024 Wong & Partners. All rights reserved. Wong & Partners, member of Baker & McKenzie International. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.


Copyright © 2024 Baker McKenzie. All rights reserved. Ownership: This site (Site) including all documentation and content (Content) is a Copyright © 2022 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.