This Act, comprising 53 Sections, aims to establish the legal framework for Carbon Capture, Utilization, and Storage (CCUS) to reduce emissions, mitigate climate change, and catalyze the CCUS industry as a source of economic growth and applies to Peninsular Malaysia and the Federal Territory of Labuan. The Act in Section 5 refers to Prudent CCUS practices, which are the globally followed standards and best practices for capture, transport, utilization, and storage of CO2. These practices include requirements set by the Minister (post-consultation) and guidelines/standards from recognized national or international bodies.
Part II establishes the Malaysia Carbon Capture, Utilization, and Storage Agency (MCCA) with these main functions: (i) Advise the Government and insure the implementation of this Act; (ii) Oversee all CCUS activities and the management of storage resources; (iii) Administer the Fund, including its benefits and investment; (iv) Recommend policies and promote/implement CCUS-related initiatives; (v) Collate, analyse, and publish relevant CCUS information and statistics; (vi) Control geological assessment (offshore/onshore) via permits and control permanent storage via licenses; (vii) Control the transportation and importation of captured CO2; (viii) Report any leakage or significant irregularity to the Minister. While Part III mandates that any person who owns or operates a carbon capture installation (including its associated technical facilities) must be registered with the Agency under this Act.
Part IV outlines strict regulations for the transportation and importation of carbon dioxide (CO2). For transportation (i) any entity moving captured CO2 by road, rail, water, pipeline, or other means must first be registered with the Agency and comply with all relevant laws and practices; (ii) registration applications must follow the prescribed manner and provide all required documentation. Regarding importation (i) CO2 captured outside of Malaysia and intended for permanent storage is barred unless it meets the specified stream acceptance criteria; (ii) all imported CO2 from outside Malaysia requires an import permit from the Agency, which is subject to a prescribed application process that includes fee payment and allows for pre-grant withdrawal; (iii) violating the rules for importing CO2 for permanent storage or importing without the necessary permit constitutes an offence punishable by a fine, imprisonment, or both.
Part V mandates that anyone utilizing captured CO2 within Malaysia must first be registered with the Agency. Crucially, it prohibits the utilization of any CO2 that was imported from outside Malaysia specifically for the purpose of permanent storage. Contravention of this utilization prohibition results in a significant penalty, namely a fine or imprisonment, or both.
Part VI establishes strict regulation for offshore CO2 storage: any geological assessment requires an offshore assessment permit, and storage operations require an offshore storage licence, both issued by the Agency and subject to severe penalties for non-compliance. Operators must ensure injected CO2 meets strict acceptance criteria for purity, actively monitor the site, and pay a risk-based injection levy. Part VII largely replicates these rules for onshore storage, requiring an onshore assessment permit for assessment and an onshore storage licence for storage operations, with similar approval processes and penalties. Onshore operators must adhere to the identical CO2 acceptance criteria, maintain required registers, and follow the defined operational and closure obligations set for the offshore framework. Section 41 establishes the Post-Closure Stewardship Fund. The Fund is managed by the Agency, funded by government contributions, injection levies from operators to cover long-term monitoring/remediation post-obligation transfer, and investment earnings.