In Malaysia, the Ministry of Natural Resources and Environmental Sustainability (NRES) has embarked on a journey to enact the Rang Undang-Undang Perubahan Iklim Negara (RUUPIN), a legislative framework aimed at aligning the nation with global climate targets, including achieving net-zero emissions by 2050. However, as Malaysians, should we accept superficial measures like carbon trading that may distort the true spirit of the net-zero effort? Or should we demand genuine actions that truly benefit our environment and future generations?
Net-zero means making sure the amount of harmful gases we release into the air, like carbon dioxide, is balanced by removing the same amount from the atmosphere. This can be done naturally, like planting more trees that absorb carbon. The idea is to make sure we’re not adding extra pollution to the air, which helps to slow down global warming and protect the planet from extreme climate changes.
Carbon trading is like a marketplace for pollution. Governments set a limit on how much pollution (like carbon dioxide) can be released. Companies get a fixed number of permits, like ‘tickets’, that allow them to pollute up to a certain level. If a company pollutes less, it can sell its extra ‘tickets’ to another company that needs more and keep on polluting. By obtaining more ‘tickets,’ businesses essentially “buy their way out” instead of addressing the real problem. As a result, pollution may never actually be reduced.
So, what’s wrong with RUUPIN? First, the effort to draft the law has seems to be outsourced to a private entity, Deloitte Malaysia. It’s crucial to mention here that the penalties of RM 2.2 million was imposed to Deloitte PLT in 2019 by the Securities Commission Malaysia for failing to immediately report irregularities related to the RM2.4 billion Sukuk Murabahah Programme issued by Bandar Malaysia Sdn Bhd, a subsidiary of 1MDB. Shouldn’t such an essential framework for our nation’s future be handled with the utmost integrity and independence?
Carbon Trading vs Carbon Tax
Secondly RUUPIN seems to be pushing to legalise carbon trading. In November 2024, Environmental, Climate Crisis, and Indigenous Peoples Bureau (BAKO) of Parti Sosialis Malaysia (PSM) submitted detailed comments on RUUPIN, emphasizing the need for holistic climate strategies over market-based mechanisms.
Under RUUPIN, carbon trading gives industries a convenient escape hatch: instead of cutting their emissions at the source, they can simply buy pollution “tickets”. Another manner of carbon trading is a loophole which lets companies polluting while claiming to be eco-friendly by purchasing forests in less developed countries, conveniently labelling this as a “net-zero” achievement. RUUPIN aims to legitimise this practice, creating a dangerous cycle where wealthy nations continue to pollute unchecked while transforming vital natural resources in poorer regions into mere tradable assets. This not only undermines real climate action but also exploits global inequalities.
BAKO learned from an Orang Asli friend in Bidor, Perak, that representatives from foreign industries have approached them to ‘teach’ them how to care for the forest. This is because these industries intend to continue polluting the environment under the pretext that they own/manage a forested area in Global South countries.
BAKO’s opposition to carbon trading is rooted in the belief that real climate action requires structural changes rather than market adjustments. Introduction of a carbon tax, a policy that provides predictable costs for emitters and generates revenue for national climate initiatives. This approach ensures that industries prioritise actual emissions reduction. The revenue from a carbon tax could fund renewable energy projects, ecosystem restoration, create more green jobs, and other sustainable initiatives.
What is CCUS and what it got to do with RUUPIN?
Thirdly is CCUS (Carbon Capture, Utilization, and Storage), a high-tech solution that sounds promising but falls short in reality. CCUS is one of the key pillars of RUUPIN which distracts from proven solutions like renewable energy.
CCUS works by capturing carbon dioxide (CO₂) before it escapes into the air and either storing it underground or reusing it. However, this technology is still new, extremely costly, and has repeatedly failed to deliver the results it promises. BAKO believes that many environmental groups in Malaysia share its concerns, agreeing that CCUS distracts from proven, effective solutions like renewable energy.
CCUS is often sold as a “technology savior” story. A futuristic solution that promises to save the planet by capturing harmful carbon emissions before they reach the atmosphere. The idea is that industries can keep running as usual while CCUS quietly cleans up the mess, buying us more time to shift to cleaner energy.
It sounds like a smart solution, but the real story isn’t so rosy. Want to know how this tale actually unfolds? Just Google these projects and see for yourself:
Boundary Dam Carbon Capture Project (Canada)
Gorgon Carbon Capture and Storage Project (Australia) by Chevron
Shute Creek Gas Processing Facility (United States) by ExxonMobil
Aliso Canyon Gas Leak (United States)
Petra Nova Carbon Capture Project (United States)
Local company PETRONAS is spending over RM 3.5 billion on a CCUS project in Bintulu, Sarawak, aimed at offsetting the carbon emissions from its oil rigs in the area. While the Kasawari CCUS project will create jobs and support the economy, the decision to invest such a huge amount in an unproven technology raises concerns. Why isn’t PETRONAS focusing on more established green solutions, like wind or wave energy, which could have a more lasting and reliable impact on reducing emissions?
Funding for CCUS and Private EV?
Fourthly, looking at the setup of the National Climate Fund, which is meant to help Malaysia meet its climate goals, the focus should shift. RUUPIN should prioritize investments in truly clean technologies and innovations, such as renewable energy, energy efficiency, and the electrification of public transport. It’s important to note that CCUS or private electric vehicles (EVs) shouldn’t be the focus of these funds. Funding private EVs is not the best way to tackle emissions or create sustainable economic growth.
Public Consultation and Vocal Voices Left Out?
The presentation slaids during a consultation by the Minister of NRES on Jan 7th, 2025 revealed the government’s intent to position carbon trading and CCUS as central to RUUPIN’s framework. It cited the necessity of establishing legal mandates for mechanisms like emissions trading and data transparency. While industry players will benefit from flexible mechanisms like voluntary carbon markets, these measures will disproportionately favor corporations over communities. Carbon trading risks undermining meaningful progress by enabling a “business-as-usual” approach.
Instead of focusing on the real solution, RUUPIN is dwelling on emissions trading and data transparency, which are supposed to go hand in hand in efforts to tackle climate change. Emissions trading allows companies to buy and sell ‘tickets’ to pollute, based on how much carbon they release into the atmosphere. However, for this system to work fairly and effectively, data transparency is crucial, and the presentation on January 7th focused on that. Feedback on how to provide clear, honest, and accessible information about how much pollution each company is actually producing is given priority.
Despite BAKO’s detailed contributions to the RUUPIN draft, BAKO and few other groups are excluded from the January 7th consultation session. We wonder whether the exclusion was a deliberate attempt to sideline the vocal opposition to carbon trading. The consultation presentation which appeared to favour industry players and large corporations over grassroots organizations and marginalized communities.
Conclusion
The debate surrounding RUUPIN underscores the importance of pursuing a climate framework that genuinely addresses the root causes of environmental issues. While carbon trading and CCUS are presented as innovative solutions, they risk perpetuating harmful practices by allowing industries to continue polluting under the guise of sustainability. Rather than relying on market mechanisms that benefit corporations, Malaysia should focus on proven strategies such as renewable energy, a carbon tax, and structural reforms that prioritize people and the planet. Carbon trading is a way to let industries keep polluting, but in the public eye, it’s portrayed as meaningful action. This, ultimately, is the essence of greenwashing.
Suresh Balasubramaniam
Central Committee
Parti Sosialis Malaysia