CARBON CAPTURE, UTILIZATION AND STORAGE ACT 2025

Carbon Capture, Utilization and Storage LAWS OF MALAYSIA Act 870 CARBON CAPTURE, UTILIZATION AND STORAGE ACT 2025 1 2 Laws of Malaysia Act 870 Date of Royal Assent ... ... 22 July 2025 Date of publication in the Gazette ... ... 1 August 2025 Publisher’s Copyright C PERCETAKAN NASIONAL MALAYSIA BERHAD All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording and/or otherwise without the prior permission of Percetakan Nasional Malaysia Berhad (Appointed Printer to the Government of Malaysia). Carbon Capture, Utilization and Storage LAWS OF MALAYSIA Act 870 CARBON CAPTURE, UTILIZATION AND STORAGE ACT 2025 ARRANGEMENT OF SECTIONS Part I PRELIMINARY Section 1. Short title and commencement 3. Act to be read together with relevant written laws 2. 4. 5. Application Interpretation Prudent carbon capture, utilization and storage practices Part II MALAYSIA CARBON CAPTURE, UTILIZATION AND STORAGE AGENCY 6. Establishment of Agency 8. Functions and powers of Agency 7. 9. 10. 11. 12. 13. 14. Membership of Agency Revocation of appointment and resignation Vacation of office Meetings of Agency Agency may invite others to attend meetings Provision of facilities by Ministry Appointment of competent technical entity Part III CARBON CAPTURE 15. 16. Requirement for registration of carbon capture installation Application for registration of carbon capture installation 3 4 Laws of Malaysia Act 870 Part IV TRANSPORTATION AND IMPORTATION OF CARBON DIOXIDE Section 17. Transportation of carbon dioxide 18. Application for registration to transport carbon dioxide 19. Importation of carbon dioxide captured outside of Malaysia 20. Import permit of carbon dioxide captured outside of Malaysia Part V UTILIZATION OF CARBON DIOXIDE 21. Requirement for registration to utilize carbon dioxide 22. Application for registration to utilize carbon dioxide 23. Prohibition of utilization of carbon dioxide captured outside of Malaysia Part VI ASSESSMENT AND PERMANENT STORAGE IN OFFSHORE AREAS 24. Requirement of an offshore assessment permit 25. Grant of offshore assessment permit 26. Requirement of an offshore storage licence 27. Grant of offshore storage licence 28. Carbon dioxide stream acceptance criteria for the purposes of offshore storage 29. Operational obligations in relation to offshore storage 30. Injection levy 31. Closure and post-closure obligations in relation to offshore storage 32. Transfer of obligations in relation to offshore storage Part VII ASSESSMENT AND PERMANENT STORAGE IN ONSHORE AREAS 33. Requirement of an onshore assessment permit 34. Grant of onshore assessment permit Carbon Capture, Utilization and Storage 5 Section 35. Requirement of an onshore storage licence 36. Grant of onshore storage licence 37. Carbon dioxide stream acceptance criteria for the purposes of onshore storage 38. Operational obligations in relation to onshore storage 39. Closure and post-closure obligations in relation to onshore storage 40. Transfer of obligations in relation to onshore storage Part VIII POST-CLOSURE STEWARDSHIP FUND 41. Post-Closure Stewardship Fund 42. Expenditure to be charged on Fund 43. Power to invest 44. Accounts and reports Part IX ENFORCEMENT 45. Authorization of public officer 46. Power of enforcement Part X GENERAL PROVISIONS 47. Appeal 48. Prosecution 49. Protection against suits and legal proceedings 50. Liability of director, etc., of body corporate 51. Power to exempt 52. Power to make regulations 53. Power to issue standards, guidelines, etc. 6 Laws of Malaysia Act 870 7 Carbon Capture, Utilization and Storage LAWS OF MALAYSIA Act 870 CARBON CAPTURE, UTILIZATION AND STORAGE ACT 2025 An Act to provide for matters relating to the capture, transportation, utilization and permanent storage of carbon dioxide, to reduce carbon dioxide emissions and mitigate the effects of climate change, to catalyse the development of the carbon capture, utilization and storage industry as a new source of economic growth, and to provide for related matters. [ ] WHEREAS the United Nations Framework Convention on Climate Change was done at New York on 9 May 1992, where Malaysia deposited her instrument of ratification on 13 July 1994 and therefore in accordance with Article 23 of the Convention, the said Convention entered into force as far as Malaysia is concerned on 11 October 1994; AND WHEREAS the Paris Agreement was done at Paris on 12 December 2015, where Malaysia deposited her instrument of ratification on 16 November 2016 and therefore in accordance with Article 21 of the Agreement, the said Agreement entered into force as far as Malaysia is concerned on 16 December 2016; 8 Laws of Malaysia Act 870 NOW, THEREFORE, IT IS ENACTED by the Parliament of Malaysia as follows: Part I PRELIMINARY Short title and commencement 1. (1) This Act may be cited as the Carbon Capture, Utilization and Storage Act 2025. (2) This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette and the Minister may appoint different dates for the coming into operation of different Parts or provisions of this Act. (3) Notwithstanding subsection (2), Part VII of this Act comes into operation in a State on such date as the Minister may, after consultation with the State Government, as the case may be, appoint by notification in the Gazette. Application 2. This Act shall apply to Peninsular Malaysia and the Federal Territory of Labuan. Act to be read together with relevant written laws 3. This Act shall be read together with the relevant written laws and the provisions of this Act shall be in addition to, and not in derogation of, the provisions of the relevant written laws. Interpretation 4. (1) In this Act, unless the context otherwise requires— “Agency” means the Malaysia Carbon Capture, Utilization and Storage Agency established under section 6; Carbon Capture, Utilization and Storage 9 “carbon capture” means the process of capturing carbon dioxide by using carbon capture technology for the purposes of utilization or permanent storage; “carbon dioxide stream” means a flow of substances resulting from the capture of carbon dioxide within or outside of Malaysia; “carbon dioxide stream acceptance criteria” means the criteria for the acceptance of a carbon dioxide stream specified in section 28; “competent technical entity” means any competent technical entity appointed under section 14; “corrective measures” means any measure taken to correct any significant irregularity, or to close or stop any leakage; “Fund” means the Post-Closure Stewardship Fund established under section 41; “geological formation” means a lithostratigraphical subdivision within which distinct rock layers can be found and mapped; “leakage” means the unintentional emission or release of carbon dioxide stream either into the water column, being all of the water in the ocean between the surface and the seabed, or the atmosphere— (a) from any storage complex, storage site, or carbon capture installation; or (b) during transportation of any carbon dioxide obtained through carbon capture; “Minister” means the Minister charged with the responsibility for matters relating to carbon capture, utilization and storage; 10 Laws of Malaysia Act 870 “offshore area” means the seabed and subsoil of the seas of Malaysia beyond three nautical miles from the baselines of each State, including the exclusive economic zone and the continental shelf; “offshore assessment permit” means a permit issued by the Agency under section 25; “offshore geological assessment” means any technical assessment such as site characterisation studies, seismic surveys, drilling, and injection tests of any potential storage complex in offshore areas for the purposes of offshore storage; “offshore operator” means a holder of an offshore storage licence who carries out the operation of a storage site, controls the storage site or controls the operation of the storage site, in offshore areas; “offshore storage” means any permanent storage of carbon dioxide in any offshore area; “offshore storage licence” means a licence issued by the Agency under section 27; “onshore area” means all land within each State of Malaysia and the Federal Territories of Kuala Lumpur, Putrajaya and Labuan, including the foreshores up to three nautical miles from the baselines of each State; “onshore assessment permit” means a permit issued by the Agency under section 34; “onshore geological assessment” means any technical assessment such as site characterisation studies, seismic surveys, drilling, and injection tests of any potential storage complex in onshore areas for the purposes of onshore storage; “onshore operator” means a holder of an onshore storage licence who carries out the operation of a storage site, controls the storage site or controls the operation of the storage site, in onshore areas; Carbon Capture, Utilization and Storage 11 “onshore storage” means any permanent storage of carbon dioxide in any onshore area; “onshore storage licence” means a licence issued by the Agency under section 36; “operation of a storage site” means any activity, function, task or matter undertaken or necessary to be undertaken to develop infrastructure for injection and permanent storage of carbon dioxide including all ancillary activities, and to operate the storage site in accordance with the offshore storage licence or onshore storage licence, pursuant to prudent carbon capture, utilization and storage practices; “permanent storage” means the permanent containment of a carbon dioxide stream in a storage complex; “prescribed” means prescribed by the Minister by way of regulations made under the provisions of this Act; “remediation measures” means any measures taken to rectify any damage resulting from any leakage, unintended migration or other irregularity in a storage site; “significant irregularity” means any irregularity of the operation of a storage site or the condition of the storage complex, which indicates the risk of a leakage or risk to the environment or human health; “storage complex” means a defined volume area within a geological formation used for permanent storage and the surrounding geological domain which can have an effect on overall storage; “storage site” means a storage complex, the geological formation between the storage complex and the surface projection of the storage complex, and any associated facilities and structures. (2) For the purposes of this Act, any reference in relation to Malaysia shall include the exclusive economic zone and continental shelf of Malaysia, as defined under the Exclusive Economic Zone Act 1984 [Act 311] and the Continental Shelf Act 1966 [Act 83], as the case may be. 12 Laws of Malaysia Act 870 Prudent carbon capture, utilization and storage practices 5. For the purposes of this Act, any reference to “prudent carbon capture, utilization and storage practices” shall be construed as any practice, method, measure and standard generally followed by the global carbon capture, utilization and storage industry during the applicable period in relation to carbon capture, transportation, utilization and storage, and including— (a) any requirement as prescribed by the Minister after consultation with the relevant competent technical entity; (b) any guideline issued by the relevant competent technical entity; or (c) any standard issued by any recognised body at the national or international level. Part II MALAYSIA CARBON CAPTURE, UTILIZATION AND STORAGE AGENCY Establishment of Agency 6. The Malaysia Carbon Capture, Utilization and Storage Agency is established. Membership of Agency 7. (1) The Agency shall consist of the following members: (a) a Chairman, who shall be appoint