Carbon capture law needs more guadrails
by AUFA MARDHIAH
MALAYSIA'S newly introduced carbon capture, utilisation and storage (CCUS) legislation may accelerate investment in low-carbon technologies — but climate experts caution that the country must chart its own course, rather than becoming a repository for foreign emissions.
Seen as a key instrument in Malaysia's net-zero roadmap, the CCUS Act is expected to establish a regulatory framework for businesses seeking to invest in carbon capture projects.
But its success will depend on how effective it is implemented, and who it truly benefits.
An outfit for carbon capture and storage (CCS) has noted that investors are increasingly viewing CCUS as a necessary component of climate risk mitigation rather than a last resort.
Investors are investing in CCUS because they recognise it as an essential technology for the mitigation of climate change,' Global CCS Institute strategic advisor for emerging CCS markets Alex Zapantis told The Malaysian Reserve (TMR).
Zapantis pointed out that since 2017, global investment in CCUS has grown steadily, supported by stronger policy signals and the need to reduce exposure to future regulatory and market risks.
In Asia, governments are already moving to integrate CCUS into national climate plans through a combination of incentives and regulatory mandates.
However, Malaysia finds itself in a different position. Although the CCUS Act was passed in early 2025, no operational CCUS projects have been launched to date.
Petroliam Nasional Bhd (Petronas), the national oil company and the country's most advanced player in the field, remains focused solely on carbon storage, with no utilisation element in its current commercial ventures.
Nationwide, efforts are still concentrated on permanent geological storage, while carbon utilisation remains limited to early-stage studies and pilot-scale initiatives.
This places Malaysia behind countries such as Japan and Singapore, which already have mature CCUS roadmaps supported by carbon pricing instruments, bilateral agreements and targeted investment incentives.
While the legislative structure is in place, the broader ecosystem — including regulations, pricing mechanisms and industrial readiness — is still under development.
The challenge ahead lies not in passing laws, but in establishing the policy, financial and technical frameworks required to enable real-world deployment.
There is the need for regulatory readiness and technical capacity before Malaysia begins storing imported CO2 at scale, says Theseira (Source: marc.com.my)
CCUS Needs More Than Legislation
Climate scientist Dr Gary Theseira warned that without strong governance, Malaysia risks repeating past environmental injustices, such as the mismanagement of plastic waste imports.
He stressed the need for regulatory readiness and technical capacity before Malaysia begins storing imported CO2 at scale.
'If we import CO2 and we are compressing it, pumping it and transporting it — what happens if there is an accident and we discover toxic gases inside? Do we have the capacity to monitor and investigate this properly?' he said, highlighting the concern during the National Climate Governance Summit (NCGS) 2025.
He pointed out that while the act provides a starting point, critical safeguards still need to be enforced — especially regarding cross-border liability, pipeline routing and environmental protection.
'If your governance is good, then I trust the people handling the CO2 pipeline. But if a gas pipe suddenly appears behind someone's house, there will be backlash,' he said, emphasising the importance of land-use planning and biodiversity protection.
Theseira also explained the technical complexity of CCS operations, noting that CO2 must be pressurised to nearly 1,000 atmospheres to become a supercritical fluid suitable for injection. This process, he said, requires high levels of engineering expertise, robust infrastructure and strict safety protocols.
From a policy standpoint, he warned that many CCS projects worldwide are limited to storage rather than utilisation, and may even be linked to enhanced oil recovery (EOR) — where CO2 is injected into wells to extract additional fossil fuels.
He called for corporate accountability at the board level, urging that any special purpose vehicles or joint ventures managing CCS projects must include experts from different fields, such as geology, marine biology, safety engineering and sociology.
'Safety is most important, and audits must be in place to show there are no leaks. Otherwise, there will be allegations of green-washing,' he said.
Moreover, Theseira said the carbon market's credibility depends on companies going beyond basic rules and adopting clear, inclusive governance.
'This has to be something the rakyat is comfortable with. It is about equity and fairness,' he said.
Petronas Leads Malaysia's CCS Rollout
Several large-scale CCS projects are progressing, with Petronas taking the lead as the primary developer.
The company's Kasawari CCS in Sarawak is currently the most advanced, with carbon injection expected to begin by the end of 2025. Designed to store up to 3.3 million tonnes of CO2 annually, it is set to become the world's largest offshore CCS facility by volume.
Other developments include the Lang Lebah-Golok CCS project by Thailand's PTTEP plc and the BIGST high-CO2 gas cluster off Terengganu, led by Petronas and JX Nippon Oil & Gas Exploration Corp.
Feasibility work is also ongoing for several regional storage hubs aimed at servicing foreign emitters from Japan, Korea and Singapore. There is the Penyu Basin facilities, a joint venture between Petronas, Abu Dhabi National Oil Co (ADNOC) and Storegga Geotechnologies Ltd. There is also the Petronas-Japan Petroleum Exploration Co Ltd (Japex) consortium.
Although these initiatives focus primarily on carbon storage, Malaysia currently has no commercial projects that convert captured carbon into usable products.
The sole announced CCUS project with a utilisation component is a planned CO2- to-syngas plant in Bintulu, a collaboration between Petronas LNG and US-based HYCO1 Inc, which is expected to become operational by 2029.
Petronas is leading Malaysia's efforts in carbon storage, aiming to create a regional CCS hub by 2030.
The company is investing in CO2 transport, offshore storage and partnerships with foreign firms, while researching ways to use captured carbon.
However, Malaysia's CCUS industry is still in its early stages, with most projects still being planned or studied.
Biochar is one of Malaysia's most overlooked tools for carbon management — a low-cost, carbon-rich material produced from biomass that could play a vital role in strengthening climate resilience (pic: Bloomberg)
CCUS, Renewables Can Coexist
Addressing concerns that CCUS may delay the energy transition or lock in fossil fuel use, Zapantis emphasised that carbon capture technologies can complement, not compete with, renewables.
'Power plants equipped with CCUS can supply flexible low-carbon electricity that complements the variable nature of renewables like solar and wind,' he said.
This is especially relevant for energy systems in South-East Asia, which continue to rely on coal and gas for baseload generation. Without CCUS, he said, these plants would continue emitting CO2 at unsustainable rates.
Additionally, Theseira highlighted biochar as one of Malaysia's most overlooked tools for carbon management — a low-cost, carbon-rich material produced from biomass that could play a vital role in strengthening climate resilience.
When applied to soil or coastal areas, biochar can boost evaporation and trigger the release of natural compounds that promote cloud formation, helping to offset dry spells caused by El Niño.
Beyond short-term climate adaptation, Theseira believes biochar could support the growth of future industries built around high-value carbon materials like activated carbon, carbon nanotubes, graphite and graphene.
He framed biochar as a practical alternative to costly, infrastructure-heavy CCS technologies — offering a more accessible and scalable option for carbon removal in a country rich in biomass and rural land.
'When it comes to cost per tonne of CO2 equivalent, even with eyes closed, biochar wins,' he said.
Building Investor Confidence Through Transparency
Zapantis said a key way to boost CCUS investment is by improving how companies report their climate actions and following trusted global standards.
He encouraged Malaysian firms to use frameworks like the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures, which help companies measure carbon reduction, understand climate risks and explain how CCUS fits into their plans to cut emissions.
He added that being open and clear is important not just for investors but also to build trust with policymakers, regulators and the public.
Clear carbon accounting ensures that emissions reduction claims — particularly those involving carbon capture and storage — are verifiable and credible.
'As environmental, social and governance (ESG) reporting frameworks improves, CCUS will gain further recognition as a viable and bankable climate solution,' he said, adding that investors now see it not as a last option, but as an important tool to manage climate risks early.
Petronas Positions CCS as New Growth Engine
Petronas has emphasised its commitment to responsible management, assuring that Malaysia's carbon storage initiatives will be carefully regulated and subject to strict oversight.
During its CCS media dialogue, held recently in conjunction with Energy Asia 2025, the national oil company stressed that any cross-border CO2 storage arrangements would be governed by bilateral agreements and mutual accountability.
Beyond its climate role, Petronas sees CCS as an industrial catalyst. The company believes that strong carbon storage infrastructure could attract industries such as blue hydrogen, blue ammonia and low-carbon steel — generating new jobs and investment.
Petronas Carbon Management Department senior GM Emry Hisham Yusoff said with CCS infrastructure, Malaysia can attract low-carbon industries.
'That is the new economy,' he said.
Still, the company acknowledged that CCS is complex. It involves a full value chain — from carbon capture at the source to pipeline transport, liquefaction, shipping and offshore injection.
To support this, Petronas is developing the world's first large-scale liquefied CO2 vessel in partnership with global shipping firms.
While the CCUS Act is in place, Petronas continues to call for clearer domestic regulations, particularly regarding environmental impact assessments, cross-border liability and CO2 classification under the Department of Environment (DOE).
At present, CO2 is not classified as a scheduled substance, which means environmental impact assessments are not mandatory— a regulatory gap that the company is urging authorities to address.
Petronas is also developing key storage sites including Kasawari, Duyong, Lawit and Penyu, each backed by over RM4 billion in investment.
These sites are expected to store up to 80 million tonnes of CO2 annually — serving both domestic emitters and regional partners.
Apart from that, Petronas has forged strategic partnerships with international players including Mitsui & Co, TotalEnergies SE, Storegga Geotechnologies and a Japan-led consortium, aiming to provide CCS as a commercial service to heavy industries across Asia.
Still, the company stressed that CCS is a developing business, not a replacement for its core oil and gas (O&G) operations.
'This is a new business. Whether this is going to be our main (income), I don't think so, but it will be one of the businesses that we will do,' Emry Hisham said.
He added that, as seen in the UK and Europe, early CCS projects often rely on government support, a reality Malaysia is also likely to face.
Ensuring Fair Transition
Theseira highlighted that the growth of green industries, including CCS, must not deepen existing social inequalities. He urged the government to prioritise job creation in these sectors for the unemployed and underemployed, particularly in rural areas, to ensure inclusive economic benefits.
'You have to be sure that the industry does not perpetuate a pattern of socioeconomic influence that ends up pushing the Gini coefficient to greater and greater inequality,' he said.
He also believed that the energy transition must be accompanied by educational reform. Schools should evolve into digital hubs offering access to global learning tools, while teachers must be equipped with digital teaching methods.
Ultimately, he urged Malaysians to abandon limiting beliefs and imagine bold futures. With its abundance of sunlight, water and land, Malaysia could become a global centre for food, clean energy and climate innovation — if it invests wisely and plans ahead.
'Only we ourselves can put the barriers in our heads,' he said.
Theseira even suggested that, in a climate-altered world, underground or undersea living could become necessary — enabled by nuclear energy and advanced technologies.
Chance to Lead, Not Blindly Follow
As the CCUS legislation takes shape, experts offer contrasting yet complementary views. Zapantis highlighted investor readiness and international momentum while Theseira emphasised equity, environmental justice and long-term credibility.
Meanwhile, Petronas aims to respond to growing climate expectations by developing commercially viable solutions, while adapting its business model to support long-term sustainability.
If Malaysia is to lead in the carbon management space, it must balance commercial ambition with responsible governance.
That means building a CCUS ecosystem that not only stores carbon — but creates value, protects communities, and earns public trust.
This article first appeared in The Malaysian Reserve weekly print edition
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Daily Express
3 days ago
- Daily Express
High CO2 levels no deterrent for Sarawak
Published on: Friday, July 25, 2025 Published on: Fri, Jul 25, 2025 By: Sherell Jeffrey Text Size: L/R: Arabi, Hanh Le, Diofanny and Fairuz. KUCHING: Half of Sarawak's natural gas reserves contain high levels of carbon dioxide (CO2), making them difficult to extract and use, but technology is turning this into a multi-billion-ringgit opportunity. 'For Sarawak, the importance of Carbon Capture, Utilisation and Storage (CCUS) technologies is profound,' said Petroleum Sarawak Berhad (Petros) Resource Management Senior Vice President Datuk Abang Arabi Abang Narudin. 'It is about robust economic growth, securing high value jobs, diversifying our economy, ensuring energy security and cementing our position as forward-thinking players in this global energy transition,' he said at the recent International Energy Week Summit (IEW) 2025's Panel Discussion where industry experts challenged skepticism about CCUS technology's effectiveness and viability. The summit, hosted by the Sarawak Energy and Environmental Sustainability Ministry and organised by Informa Markets, a world leading market-making company, brought together regional experts to discuss how CCUS technologies can transform the oil and gas sector towards sustainability. Daily Express was among those invited for the event held at the Borneo Convention Centre Kuching, here. What exactly is CCUS? CCUS is a technology that captures CO2 from industrial processes before it enters the atmosphere, then either uses it for other purposes or stores it safely underground. For Sarawak, this technology holds promise. 'We are blessed with many natural resources, we sit on top of 65 per cent of the geological formation that is ideal and best for the CCUS,' said Abang Arabi. 'If you look at our natural gas resources, we have vast natural gas resources, but 50 per cent of our remaining resources are contaminated gas with high CO2. 'Hence, CCUS is important for us to unlock the value from these resources,' he said, adding that Sarawak wants to harness that and position itself as a leading player in the region for CCUS. He said technology optimisation, financing, policy certainty and infrastructure development are four key factors needed for CCUS' success. 'We are looking at using CO2 in combination with hydrogen, for example, create e-methanol, e-methane,' he said, pointing out how Sarawak is exploring innovative applications. 'When hydrogen becomes cheaper and cheaper to produce, it makes sense for us to go for synthetic gas or synthetic fuel through CO2,' he said. Sarawak is also looking at proprietary technology that combines CO2 with gas to produce hydrogen and chemical feedstock. 'It is a technology called HYCO1. This is something that we are exploring. It is in its early days. I think they are ready for a pilot in the near future,' he added. Additionally, Sarawak is developing two CCUS hub to create shared infrastructure and achieve economies of scale. 'The whole intent and purpose is to have a common shared infrastructure for us to have economy of scale and make CCUS more affordable,' he said. When asked about environmental risks from storing CO2 underground, Abang Arabi, who is a geophysicist by training said, 'If you look at our reservoirs, the oil and gas has been deposited there for millions of years without leakage. It needs us to poke a hole and drill to bring it out.' One common criticism of the CCUS technology is that it is expensive and complex while offering limited environmental benefits. The panel disagreed with this assessment. Asia Natural Gas and Energy Association (ANGEA) Singapore Senior Advisor Hanh Le said CCUS is a technology that provides large scale decarbonisation. 'It is probably the highest scale of mitigation options that are available to us right now,' she said, adding that public acceptance and policy harmonisation are important in the CCUS. 'If you want to build a regional CCUS hubs and CCUS as a regional business model, we need that policy certainty related to liability, how you manage the liabilities not just operational liabilities, but also from emission accounting liability as well,' she said. 'ANGEA has implemented many carbon, capture and storage (CCS) projects in the world, notably Gorgon in Australia, Chevron. Risk is low and environmental assessment has been done,' she said. She said Singapore is also expanding its CCUS footprint with three flagship projects spanning from western to eastern Indonesia and awarding new license areas for carbon injection working areas. 'Lack of public acceptance often come from misunderstanding. When people understand, they will be a lot more willing to accept,' said Hanh Le pointing out that education is key. Meanwhile, Indonesia Carbon Capture and Storage Centre (ICCSC) Strategic Initiative Director Diofanny Swandrina Putri said CCUS has numerous benefits that are more than just environmental impact. 'When you do something, you gain something, right? Even though we know it is expensive and difficult, but if you are looking towards the advantage that we can gain in terms of economic growth, value chain, job creation and green future, I think it is worth a try,' she said. She said for Indonesia, the CCS could support up to 70 per cent of the country's decarbonisation efforts, a notably higher contribution than the global average of 11 per cent. 'We also partner with the World Bank, International Finance Corporation and the Asian Development Bank who have this urgency to fund CCS projects,' she said, pointing out strong international funding appetite for CCS projects. 'There are a lot of technology providers coming to the ICCSC offering huge potential of the carbon capture technology. They say they can reduce the cost until 70 per cent, going from $100 per ton to $30 per ton,' she said. One of the most intriguing aspects of CCUS is the potential to turn Co2 from waste product into something valuable. 'First, as an asset that is traded, carbon credits. Second is carbon as feedstock, like carbon utilisation. Third is carbon as a circular economy,' Diofanny said, outlining three ways this could happen. 'Research from Oxford University shows that when CO2 is injected more than two kilometers underground according to international standards, the risk of leakage over 100 years is only 0.02 per cent,' she added. She acknowledged that public acceptance remains a challenge. Indonesia's approach involves engaging young people early. 'We are trying to involve youths and the ICCSC is launching the first CCS student chapter in the world. 'They are the ones who is going to do this for the next 20 years, 30 years and we need them to get onboard with us,' she said. Indonesia is also working on regulatory frameworks and international cooperation. 'We want to launch business license for the CCUS, because if you want to do business in Indonesia, you need to get the business license. 'We are also working towards government-to-government (G2G) agreements together with Singapore. We signed the MOU for the CCUS cross-border last June,' she said. Contrary to popular belief, the CCUS technology is not waiting for some breakthrough innovation. 'The CCUS technology has existed for many years,' said Aker Solutions Consultancy Director Ahmad Fairuz Mohd Amin. 'CCUS is like flossing your teeth. If you do not do it, then you realise one day there is a cavity in your tooth and then you start hurting yourself. It is something that is inevitable. You just need to do it,' he said, adding that Aker Solutions has been involved in CCUS projects since the 1990s. 'It is really about continuous optimisation, lowering the cost to make it more affordable,' he said. He said Aker Solutions is also involved in the world's first CO2 injection in Sleipner and more recent projects in Norway. The company has also worked on the Longship CCUS programme, which includes the Northern Lights project and the Brevik CO2 cement plant, the first capture facility of its kind in the world. 'The Brevik has captured around 400,000 metric tons of CO2 last month, being transferred into Northern Lights,' Ahmad Fairuz said. 'We have gone through all the bruises, blood and tears trying to execute CCUS. It is no easy task. What I mean is, financially we got hurt,' he said. However, he pointed out that costs will decrease as the technology becomes more standardised. 'Look at solar in 2005, and today, you see the cost going down. Thus, I think we must start and then it will go to that path of cost reduction,' he said. Moving forward, he said they recently signed with some partners on a technology called Zero Emission Unconventional Power System (Zeus) which uses oxy-combustion technology. 'Oxy-combustion is not new. It has been there for ages but we want to make it small footprint, lightweight. 'We are trying to bring power plant directly offshore, avoid having pipelines or gas processing plants. The system uses rocket engine technology adapted for energy production. 'We went to the US, brought a rocket engine and put it inside the system. The first pilot plant will be in Malaysia,' he said without disclosing its exact location except that it requires hundreds of millions of ringgits. Interestingly, the Zeus system can handle extremely high CO2 content. 'The Zeus system can take on 90 per cent CO2 as a system. Why? Because they use the same CO2 to cool up the system and enhance gas recovery,' he said. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Malaysian Reserve
21-07-2025
- Malaysian Reserve
Carbon capture law needs more guadrails
In Asia, govts are already moving to integrate carbon capture, utilisation and storage into national climate plans through a combination of incentives and regulatory mandates by AUFA MARDHIAH MALAYSIA'S newly introduced carbon capture, utilisation and storage (CCUS) legislation may accelerate investment in low-carbon technologies — but climate experts caution that the country must chart its own course, rather than becoming a repository for foreign emissions. Seen as a key instrument in Malaysia's net-zero roadmap, the CCUS Act is expected to establish a regulatory framework for businesses seeking to invest in carbon capture projects. But its success will depend on how effective it is implemented, and who it truly benefits. An outfit for carbon capture and storage (CCS) has noted that investors are increasingly viewing CCUS as a necessary component of climate risk mitigation rather than a last resort. Investors are investing in CCUS because they recognise it as an essential technology for the mitigation of climate change,' Global CCS Institute strategic advisor for emerging CCS markets Alex Zapantis told The Malaysian Reserve (TMR). Zapantis pointed out that since 2017, global investment in CCUS has grown steadily, supported by stronger policy signals and the need to reduce exposure to future regulatory and market risks. In Asia, governments are already moving to integrate CCUS into national climate plans through a combination of incentives and regulatory mandates. However, Malaysia finds itself in a different position. Although the CCUS Act was passed in early 2025, no operational CCUS projects have been launched to date. Petroliam Nasional Bhd (Petronas), the national oil company and the country's most advanced player in the field, remains focused solely on carbon storage, with no utilisation element in its current commercial ventures. Nationwide, efforts are still concentrated on permanent geological storage, while carbon utilisation remains limited to early-stage studies and pilot-scale initiatives. This places Malaysia behind countries such as Japan and Singapore, which already have mature CCUS roadmaps supported by carbon pricing instruments, bilateral agreements and targeted investment incentives. While the legislative structure is in place, the broader ecosystem — including regulations, pricing mechanisms and industrial readiness — is still under development. The challenge ahead lies not in passing laws, but in establishing the policy, financial and technical frameworks required to enable real-world deployment. There is the need for regulatory readiness and technical capacity before Malaysia begins storing imported CO2 at scale, says Theseira (Source: CCUS Needs More Than Legislation Climate scientist Dr Gary Theseira warned that without strong governance, Malaysia risks repeating past environmental injustices, such as the mismanagement of plastic waste imports. He stressed the need for regulatory readiness and technical capacity before Malaysia begins storing imported CO2 at scale. 'If we import CO2 and we are compressing it, pumping it and transporting it — what happens if there is an accident and we discover toxic gases inside? Do we have the capacity to monitor and investigate this properly?' he said, highlighting the concern during the National Climate Governance Summit (NCGS) 2025. He pointed out that while the act provides a starting point, critical safeguards still need to be enforced — especially regarding cross-border liability, pipeline routing and environmental protection. 'If your governance is good, then I trust the people handling the CO2 pipeline. But if a gas pipe suddenly appears behind someone's house, there will be backlash,' he said, emphasising the importance of land-use planning and biodiversity protection. Theseira also explained the technical complexity of CCS operations, noting that CO2 must be pressurised to nearly 1,000 atmospheres to become a supercritical fluid suitable for injection. This process, he said, requires high levels of engineering expertise, robust infrastructure and strict safety protocols. From a policy standpoint, he warned that many CCS projects worldwide are limited to storage rather than utilisation, and may even be linked to enhanced oil recovery (EOR) — where CO2 is injected into wells to extract additional fossil fuels. He called for corporate accountability at the board level, urging that any special purpose vehicles or joint ventures managing CCS projects must include experts from different fields, such as geology, marine biology, safety engineering and sociology. 'Safety is most important, and audits must be in place to show there are no leaks. Otherwise, there will be allegations of green-washing,' he said. Moreover, Theseira said the carbon market's credibility depends on companies going beyond basic rules and adopting clear, inclusive governance. 'This has to be something the rakyat is comfortable with. It is about equity and fairness,' he said. Petronas Leads Malaysia's CCS Rollout Several large-scale CCS projects are progressing, with Petronas taking the lead as the primary developer. The company's Kasawari CCS in Sarawak is currently the most advanced, with carbon injection expected to begin by the end of 2025. Designed to store up to 3.3 million tonnes of CO2 annually, it is set to become the world's largest offshore CCS facility by volume. Other developments include the Lang Lebah-Golok CCS project by Thailand's PTTEP plc and the BIGST high-CO2 gas cluster off Terengganu, led by Petronas and JX Nippon Oil & Gas Exploration Corp. Feasibility work is also ongoing for several regional storage hubs aimed at servicing foreign emitters from Japan, Korea and Singapore. There is the Penyu Basin facilities, a joint venture between Petronas, Abu Dhabi National Oil Co (ADNOC) and Storegga Geotechnologies Ltd. There is also the Petronas-Japan Petroleum Exploration Co Ltd (Japex) consortium. Although these initiatives focus primarily on carbon storage, Malaysia currently has no commercial projects that convert captured carbon into usable products. The sole announced CCUS project with a utilisation component is a planned CO2- to-syngas plant in Bintulu, a collaboration between Petronas LNG and US-based HYCO1 Inc, which is expected to become operational by 2029. Petronas is leading Malaysia's efforts in carbon storage, aiming to create a regional CCS hub by 2030. The company is investing in CO2 transport, offshore storage and partnerships with foreign firms, while researching ways to use captured carbon. However, Malaysia's CCUS industry is still in its early stages, with most projects still being planned or studied. Biochar is one of Malaysia's most overlooked tools for carbon management — a low-cost, carbon-rich material produced from biomass that could play a vital role in strengthening climate resilience (pic: Bloomberg) CCUS, Renewables Can Coexist Addressing concerns that CCUS may delay the energy transition or lock in fossil fuel use, Zapantis emphasised that carbon capture technologies can complement, not compete with, renewables. 'Power plants equipped with CCUS can supply flexible low-carbon electricity that complements the variable nature of renewables like solar and wind,' he said. This is especially relevant for energy systems in South-East Asia, which continue to rely on coal and gas for baseload generation. Without CCUS, he said, these plants would continue emitting CO2 at unsustainable rates. Additionally, Theseira highlighted biochar as one of Malaysia's most overlooked tools for carbon management — a low-cost, carbon-rich material produced from biomass that could play a vital role in strengthening climate resilience. When applied to soil or coastal areas, biochar can boost evaporation and trigger the release of natural compounds that promote cloud formation, helping to offset dry spells caused by El Niño. Beyond short-term climate adaptation, Theseira believes biochar could support the growth of future industries built around high-value carbon materials like activated carbon, carbon nanotubes, graphite and graphene. He framed biochar as a practical alternative to costly, infrastructure-heavy CCS technologies — offering a more accessible and scalable option for carbon removal in a country rich in biomass and rural land. 'When it comes to cost per tonne of CO2 equivalent, even with eyes closed, biochar wins,' he said. Building Investor Confidence Through Transparency Zapantis said a key way to boost CCUS investment is by improving how companies report their climate actions and following trusted global standards. He encouraged Malaysian firms to use frameworks like the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures, which help companies measure carbon reduction, understand climate risks and explain how CCUS fits into their plans to cut emissions. He added that being open and clear is important not just for investors but also to build trust with policymakers, regulators and the public. Clear carbon accounting ensures that emissions reduction claims — particularly those involving carbon capture and storage — are verifiable and credible. 'As environmental, social and governance (ESG) reporting frameworks improves, CCUS will gain further recognition as a viable and bankable climate solution,' he said, adding that investors now see it not as a last option, but as an important tool to manage climate risks early. Petronas Positions CCS as New Growth Engine Petronas has emphasised its commitment to responsible management, assuring that Malaysia's carbon storage initiatives will be carefully regulated and subject to strict oversight. During its CCS media dialogue, held recently in conjunction with Energy Asia 2025, the national oil company stressed that any cross-border CO2 storage arrangements would be governed by bilateral agreements and mutual accountability. Beyond its climate role, Petronas sees CCS as an industrial catalyst. The company believes that strong carbon storage infrastructure could attract industries such as blue hydrogen, blue ammonia and low-carbon steel — generating new jobs and investment. Petronas Carbon Management Department senior GM Emry Hisham Yusoff said with CCS infrastructure, Malaysia can attract low-carbon industries. 'That is the new economy,' he said. Still, the company acknowledged that CCS is complex. It involves a full value chain — from carbon capture at the source to pipeline transport, liquefaction, shipping and offshore injection. To support this, Petronas is developing the world's first large-scale liquefied CO2 vessel in partnership with global shipping firms. While the CCUS Act is in place, Petronas continues to call for clearer domestic regulations, particularly regarding environmental impact assessments, cross-border liability and CO2 classification under the Department of Environment (DOE). At present, CO2 is not classified as a scheduled substance, which means environmental impact assessments are not mandatory— a regulatory gap that the company is urging authorities to address. Petronas is also developing key storage sites including Kasawari, Duyong, Lawit and Penyu, each backed by over RM4 billion in investment. These sites are expected to store up to 80 million tonnes of CO2 annually — serving both domestic emitters and regional partners. Apart from that, Petronas has forged strategic partnerships with international players including Mitsui & Co, TotalEnergies SE, Storegga Geotechnologies and a Japan-led consortium, aiming to provide CCS as a commercial service to heavy industries across Asia. Still, the company stressed that CCS is a developing business, not a replacement for its core oil and gas (O&G) operations. 'This is a new business. Whether this is going to be our main (income), I don't think so, but it will be one of the businesses that we will do,' Emry Hisham said. He added that, as seen in the UK and Europe, early CCS projects often rely on government support, a reality Malaysia is also likely to face. Ensuring Fair Transition Theseira highlighted that the growth of green industries, including CCS, must not deepen existing social inequalities. He urged the government to prioritise job creation in these sectors for the unemployed and underemployed, particularly in rural areas, to ensure inclusive economic benefits. 'You have to be sure that the industry does not perpetuate a pattern of socioeconomic influence that ends up pushing the Gini coefficient to greater and greater inequality,' he said. He also believed that the energy transition must be accompanied by educational reform. Schools should evolve into digital hubs offering access to global learning tools, while teachers must be equipped with digital teaching methods. Ultimately, he urged Malaysians to abandon limiting beliefs and imagine bold futures. With its abundance of sunlight, water and land, Malaysia could become a global centre for food, clean energy and climate innovation — if it invests wisely and plans ahead. 'Only we ourselves can put the barriers in our heads,' he said. Theseira even suggested that, in a climate-altered world, underground or undersea living could become necessary — enabled by nuclear energy and advanced technologies. Chance to Lead, Not Blindly Follow As the CCUS legislation takes shape, experts offer contrasting yet complementary views. Zapantis highlighted investor readiness and international momentum while Theseira emphasised equity, environmental justice and long-term credibility. Meanwhile, Petronas aims to respond to growing climate expectations by developing commercially viable solutions, while adapting its business model to support long-term sustainability. If Malaysia is to lead in the carbon management space, it must balance commercial ambition with responsible governance. That means building a CCUS ecosystem that not only stores carbon — but creates value, protects communities, and earns public trust. This article first appeared in The Malaysian Reserve weekly print edition
Free Malaysia Today
17-07-2025
- Free Malaysia Today
Petros looking to develop CCUS hubs in Sarawak
Petros plays a key role in transforming Sarawak into a low-carbon economic hub, said the company's senior vice-president of Sarawak resource management, Abang Arabi Abang Narudin. (Petros pic) PETALING JAYA : Petroleum Sarawak Bhd (Petros) is working on developing two carbon capture, utilisation and storage (CCUS) hubs in the Bornean state. Petros senior vice-president of Sarawak resource management, Abang Arabi Abang Narudin, said the two hubs would be part of efforts to prepare infrastructure to allow for low-cost CCUS. 'Sarawak is focused on developing infrastructure. The purpose of these hubs is to provide shared infrastructure so we can achieve economies of scale. 'That way, CCUS will become more affordable,' he said, according to state-owned broadcaster TVS. Abang Arabi said while CCUS technology had long existed, resources needed to be used and optimised to reduce costs and make it more affordable. 'Clarity in terms of policies and regulations is also very important because investors investing in CCUS need some certainty as to how business is done here. 'This includes whether they will need a licence and permit, because CCUS investments are long-term in nature,' he said. He added that Petros played a key role in transforming Sarawak into a low-carbon economic hub. Abang Jo eyes sovereign wealth fund role for Petros Several days ago, Nikkei Asia quoted Sarawak premier Abang Johari Openg as saying he envisioned Petros playing the role of a sovereign wealth fund with investments in sectors beyond oil and gas. The Gabungan Parti Sarawak chairman said he was taking a leaf out of Singapore and the city-state's funds, Temasek Holdings Pte Ltd and GIC Pte Ltd. 'If Petros (has) the strength, the muscle, why not invest in other areas?' he was quoted as saying. He also said this would be more of a business decision by the company than a state government decision. Abang Johari said portions of Petros's revenue from its ventures should naturally be channelled back to the state, since it was fully owned by the Sarawak government. The premier launched the Sarawak Sovereign Wealth Future Fund last year, with the state government to set aside RM400 million to RM600 million annually for the fund. In May, it was given the go-ahead from the relevant authorities to make global investments, which Abang Johari described as crucial for diversifying the fund's portfolio.
