Malaysia Launches National Carbon Market Policy to Boost Low-Carbon Economy
Malaysia has unveiled its National Carbon Market Policy (NCMP), a comprehensive framework aimed at strengthening the country’s transition to a low-carbon economy and supporting its international climate commitments.
The policy was launched by Arthur Joseph Kurup, Minister of Natural Resources and Environmental Sustainability, during the Climate Change and Sustainability Conference 2026 organised by the Forest Research Institute Malaysia.
Approved by the Cabinet earlier this month, the NCMP is designed to guide the development of a transparent, credible and high-integrity carbon market ecosystem in Malaysia. It will play a central role in helping the country meet its Nationally Determined Contributions (NDC 3.0) under the Paris Agreement, which targets an absolute reduction of 15 to 30 million tonnes of carbon dioxide equivalent by 2035.
Speaking at the launch, Mr Kurup said the framework reflects both domestic priorities and evolving global carbon market trends.
The policy is built around four key pillars. These include establishing a high-integrity compliance carbon market aligned with international mechanisms such as Article 6 of the Paris Agreement and the Carbon Offsetting and Reduction Scheme for International Aviation, as well as strengthening participation in voluntary carbon markets.
It also prioritises the development of national infrastructure, including a carbon registry and enhanced monitoring, reporting and verification (MRV) systems to ensure transparency and prevent double counting of carbon credits.
Malaysia aims to expand international cooperation through agreements with countries such as South Korea and Singapore, while facilitating the transition from legacy mechanisms like the Clean Development Mechanism (CDM) to new frameworks under the Paris Agreement.
In addition, the NCMP will support the design of domestic carbon pricing instruments, including a potential carbon tax or emissions trading scheme, complementing existing sectoral decarbonisation efforts in energy, agriculture and forestry.
Government analysis suggests Malaysia has the potential to reduce emissions by up to 56 million tonnes of CO₂ equivalent by 2030, with around 70 per cent achievable through low-cost measures such as energy efficiency.
Mr Kurup noted that the policy would be particularly important in addressing the remaining emissions that are more difficult and costly to abate, by enabling access to advanced low-carbon technologies through international carbon markets.
The effectiveness of the framework will be reinforced by forthcoming climate legislation, while also creating new green job opportunities, including roles in carbon auditing and MRV systems.
Officials said the policy is expected to enhance Malaysia’s competitiveness in global markets increasingly shaped by environmental standards, while also attracting investment into low-carbon technologies and generating revenue through carbon trading.
The government added that the transition will be guided by principles of inclusivity and sustainability, ensuring long-term benefits for both the economy and the environment.
