Malaysia looks to fully decarbonize steel industry by 2050

Malaysia is drawing up a comprehensive plan to overhaul its steel industry with the aim of addressing overcapacity, restructuring licensing, and charting a decarbonization path toward a fully green sector by 2050.

Minister of Investment, Trade and Industry Tengku Zafrul Aziz announced on Monday that the 10-year roadmap will feature clear licensing guidelines for steelmakers, greater transparency in carbon pricing, and expanded access to financing that will support the transition to greener and higher value-added production.

He stressed that decarbonization is essential given that steel manufacturing is among Malaysia’s highest carbon-emitting sectors.

At the same time, he added, the domestic market faces a significant mismatch between supply and demand, resulting in overcapacity. Beyond market factors, underutilized production resources and low investment returns have also undermined the competitiveness and resilience of the industry.

To strengthen regional cooperation, the minister proposed that the Association of Southeast Asian Nations (ASEAN) establish a database to track capacity and utilisation levels. Such a tool, he argued, will help the region address issues like overcapacity, dumping, and steel re-exports more effectively.

He also called on ASEAN countries to develop a collective decarbonization roadmap and consider the establishment of regional “green steel” production hubs.