CARBON CAPTURE, UTILIZATION AND STORAGE ACT 2025

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.

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

from any storage complex, storage site, or carbon capture installation; or

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;

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“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;

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“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.

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.

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Prudent carbon capture, utilization and storage practices

any requirement as prescribed by the Minister after consultation with the relevant competent technical entity;

any guideline issued by the relevant competent technical entity; or

any standard issued by any recognised body at the national or international level.

a Chairman, who shall be appointed by the Minister from among the members of the Agency;

the Secretary General of the Ministry charged with the responsibility for carbon capture, utilization and storage;

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the Director General of Department of Environment; and

not more than six other members who shall be appointed in writing by the Minister who, in the opinion of the

Minister, have the appropriate experience, knowledge and expertise in matters relating to carbon capture, utilization or storage and any other relevant expertise.

The members of the Agency appointed under paragraph (1)(d)—

to advise the Government and the Minister on matters relating to the implementation of this Act;

to administer and ensure effective implementation of this

Act and any regulations made under this Act;

to oversee any activity in relation to the carbon capture, transportation, utilization and storage;

to oversee the management of any storage resources for the purposes of permanent storage of carbon dioxide in

Malaysia;

to administer and control the Fund, and all matters relating to the benefits and investment of the Fund;

to recommend to the Government any policy, action and measure relating to carbon capture, transportation, utilization and storage;

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to promote, develop or implement any policy and initiative relating to carbon capture, transportation, utilization and storage;

to collate, analyse and publish any information, statistic and factor influencing or relevant to the development of carbon capture, transportation, utilization and storage;

to control the activity of offshore geological assessment and onshore geological assessment by issuance of offshore assessment permit and onshore assessment permit;

to control permanent storage in offshore areas and onshore areas by issuance of offshore storage licence and onshore storage licence;

to report to the Minister any matters concerning any leakage or significant irregularity;

to control the activity of transportation of carbon dioxide captured within or outside of Malaysia;

to control the activity of importation of carbon dioxide captured outside Malaysia; and

to do such other things arising out of or consequential to the functions of the Agency under this Act consistent with the purposes of this Act.

The Agency shall have all such powers as may be necessary for, in connection with, or reasonably incidental to, the performance of its functions under this Act.

Revocation of appointment and resignation

Any member referred to in subsection (1) may at any time resign his office by giving a one month notice to the Minister.

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Vacation of office

he dies;

his conduct, whether in connection with his duties as a member of the Agency or otherwise, has been such as to bring discredit to the Agency;

there has been proved against him, or he has been convicted on, a charge in respect of—

an offence involving fraud, dishonesty or moral turpitude;

he becomes a bankrupt;

he becomes of unsound mind or is otherwise incapable of discharging his duties;

he absents himself from three consecutive meetings of the Agency without leave of the Chairman;

his resignation is accepted by the Minister;

his appointment is revoked by the Minister; or

his term of appointment has expired.

Meetings of Agency

The Chairman shall preside at all meetings of the Agency.

Where the Chairman is absent from any meeting of the

Agency, the members present shall elect one of themselves to preside at the meeting.

Five members, including the Chairman of the meeting, shall constitute the quorum of the meeting.

Where there is an equality of votes, the Chairman who presides the meeting shall have the casting vote.

The Agency may determine its own procedure.

Agency may invite others to attend meetings

carbon capture;

transportation of carbon dioxide;

utilization of carbon dioxide;

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offshore storage of carbon dioxide; and

onshore storage of carbon dioxide.

The competent technical entity appointed under subsection (1)

shall advise the Agency on any technical and operational matters relating to relevant component the entity was appointed for and perform any other functions as determined by the Minister.

A person may only be appointed as a competent technical entity under subsection (1) if that person has the necessary knowledge, skill and experience with respect to the relevant components of the carbon capture, transportation, utilization, and storage.

Any competent technical entity appointed under subsection (1)

shall use reasonable diligence in the discharge of its duties.

Nothing in subsection (1) shall be construed as empowering the Minister to appoint a competent technical entity for any purpose other than the purposes specified in subsection (1).

For the purposes of this Part, “carbon capture installation”

means an installation which carries out carbon capture and includes any associated technical facilities of such installation.

Application for registration of carbon capture installation

any other written laws relating to transportation; and

prudent carbon capture, utilization and storage practices specified in section 5.

Application for registration to transport carbon dioxide

Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding five years or to both.

Import permit of carbon dioxide captured outside of Malaysia

The application for an import permit under subsection (1)

shall be made to the Agency in such manner and accompanied by such information, particulars or documents and payment of fees as prescribed.

An application under this section may be withdrawn at any time before the import permit is granted or refused.

Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding five years or to both.

Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding five years or to both.

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An application for an offshore assessment permit under subsection (1) shall be made to the Agency in such manner and accompanied by such fees as may be prescribed.

An application for an offshore assessment permit under this section may be withdrawn at any time before the offshore assessment permit is granted or refused.

The Agency may at any time after the receipt of an application under subsection (2) and before the application is determined, by a written notice, require the applicant to provide any additional documents or information within the period as specified.

Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding one million ringgit or to both.

Grant of offshore assessment permit

The Agency may impose such conditions as the Agency deems fit, in granting the offshore assessment permit.

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Requirement of an offshore storage licence

An application for an offshore storage licence under subsection (1) shall be made to the Agency in such manner and accompanied by such fees as prescribed.

An application for an offshore storage licence under this section may be withdrawn at any time before the offshore storage licence is granted or refused.

The Agency may at any time after the receipt of an application under subsection (2) and before the application is determined, by a written notice, require the applicant to provide any additional documents or information within the period as specified.

Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding two million ringgit or to both.

Grant of offshore storage licence

The Agency may impose such conditions as the Agency thinks fit, in granting the offshore storage licence.

Carbon dioxide stream acceptance criteria for the purposes of offshore storage

A carbon dioxide stream shall comply with prudent carbon capture, utilization and storage practices specified in section 5, and the carbon dioxide stream shall consist of overwhelmingly of carbon dioxide, and no waste or other matter may be added into the carbon dioxide stream for the purpose of disposing the waste or other matter.

Notwithstanding subsection (2), a carbon dioxide stream may contain any incidental associated substances from the source, capture or injection process, and trace substances added to assist in monitoring and verifying the migration of carbon dioxide.

Concentrations of all incidental and added substances referred to in subsection (3) shall be below levels that—

An offshore operator shall keep a register of the quantities and properties of the carbon dioxide streams accepted and injected, including the composition of the stream.

Any person who contravenes subsection (1) or (5) commits an offence and shall, on conviction, be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding five years or to both.

Operational obligations in relation to offshore storage

provide information relevant for the purpose of assessing compliance with offshore storage licence conditions;

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monitor the storage complex and surrounding environment, and prepare a monitoring plan;

carry out any corrective measures and remediation measures with regards to any leakage or significant irregularity; and

submit the report in relation to the result of the monitoring undertaken under paragraph (b) and any measure undertaken under paragraph (c), to the Agency.

Injection levy

The rates of injection levy—

Subject to subsection (2)—

After a storage site has been closed pursuant to subsection (1), an offshore operator shall remain responsible for—

The transfer of all obligations to the Government under subsection (1) shall only occur if—

For the avoidance of doubt, the transfer of obligations to the Government referred to in subsection (1) shall not include the transfer of any criminal, contractual or civil law liability connected to the storage site attributable to the fault, negligence or deceit of the offshore operator, or failure of the offshore operator to exercise any due diligence.

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An application for an onshore assessment permit under subsection (1) shall be made to the Agency in such manner and accompanied by such fees as may be prescribed.

An application for an offshore assessment permit under this section may be withdrawn at any time before the onshore assessment permit is granted or refused.

The Agency may at any time after the receipt of an application under subsection (2) and before the application is determined, by a written notice, require the applicant to provide any additional documents or information within the period as specified.

Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding one million ringgit or to both.

Grant of onshore assessment permit

The Agency may impose such conditions as the Agency thinks fit, in granting the onshore assessment permit.

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Requirement of an onshore storage licence

An application for an onshore storage licence under subsection (1) shall be made to the Agency in such manner and accompanied by such fees as may be prescribed.

An application for an onshore storage licence under this section may be withdrawn at any time before the onshore storage licence is granted or refused.

The Agency may at any time after the receipt of an application under subsection (2) and before the application is determined, by a written notice, require the applicant to provide any additional documents or information within the period specified.

Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding two million ringgit or to both.

Grant of onshore storage licence

The Agency may impose such conditions as the Agency thinks fit, in granting the onshore storage licence.

Carbon dioxide stream acceptance criteria for the purposes of onshore storage

An onshore operator shall keep a register of the quantities and properties of the carbon dioxide streams accepted and injected, including the composition of the stream.

Any person who contravenes subsection (1) or (2) commits an offence and shall on conviction, be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding five years or to both.

Operational obligations in relation to onshore storage

The Fund shall consist of—

fulfilling any obligations assumed by the Government pursuant to the transfer of obligations under section 32

or 40;

long-term monitoring of the carbon dioxide stored within a storage site to ensure that the carbon dioxide is safely and permanently stored; and

carrying out any corrective measures or remediation measures.

Notwithstanding subsection (1), all monies earned from investments financed from the Fund referred to in paragraph 41(2)(c)

may also be expended for the purpose of promoting the development of the carbon capture, utilization and storage industry in Malaysia generally.

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Power to invest

The Agency shall open and maintain an account or accounts to hold monies in the Fund with such bank or banks in Malaysia as it thinks fit, after consulting the Minister and the Minister of

Finance, and every such account shall be operated upon in any manner as may be authorized by the Agency for such purpose.

Accounts and reports

a statement of accounts which shall include a balance sheet and an account of the contributions and expenditure; and

a statement of its activities in respect of the Fund.

The Agency shall as soon as practicable, send a copy of the statement of accounts certified by the auditors and a copy of auditors’

report to the Minister, and the Minister shall cause the statement of account and the auditors’ report to be laid before each

House of Parliament.

An officer authorized under section 45 shall have the powers of a police officer of whatever rank as provided for under the

Criminal Procedure Code [Act 593] in relation to investigation into any offence under this Act, and such powers shall be in addition to and not in derogation of, the powers provided for under this Act.

a refusal to grant an offshore assessment permit under section 25 and offshore storage licence under section 27;

a refusal to grant an onshore assessment permit under section 34 and onshore storage licence under section 36;

the imposition of any condition, limitation or restriction on his permit or licence; or

the revocation, suspension or variation of his permit or licence, may, within thirty days after being informed in writing of such refusal, imposition, revocation or suspension, appeal to the Minister.

The Minister may, after considering the appeal made under subsection (1), confirm or set aside the decision appealed against.

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Prosecution

may be charged severally or jointly in the same proceedings with the body corporate; and

if the body corporate is found guilty of the offence, shall be deemed to be guilty of that offence and shall be liable to the same punishment or penalty as an individual unless, having regard to the nature of his functions in that capacity and to all circumstances, he proves—

that the offence was committed without his knowledge; or

For the purposes of this section, “body corporate” means a company, limited liability partnership, firm, society or other body of persons.

Power to exempt

Without prejudice to the generality of subsection (1), the Minister may make regulations for or in respect of all or any of the following matters: