Kota Kinabalu: Sabah retains jurisdiction over the development of its carbon projects and collection of State revenues, while the Federal Government will serve as an institutional enabler and bridge to national and global markets, said Natural Resources and Environmental Sustainability Minister Datuk Seri Arthur Joseph Kurup.
He said the Federal Government’s role under the National Carbon Market Policy (DPKK) was not to centralise control, impose top down decrees or encroach upon the State’s constitutional prerogatives.
“Under the Federal Constitution, land, forests and natural resources fall squarely within State jurisdiction.
“I want to state clearly that Putrajaya’s role under the DPKK is not to centralise control, impose top down decrees or encroach upon State constitutional prerogatives,” he said.
Arthur Arthur said Natural Resources and Environmental Sustainability Ministry (NRES) would provide the overarching sovereign umbrella required under the Paris Agreement while working with Sabah to harmonise Federal and State systems.
He said this was crucial to streamline international host party authorisations under Article 6 and apply corresponding adjustments where required.
“By harmonising Federal and State efforts, we ensure that every carbon credit generated here, whether from Sabah’s towering dipterocarp forests, our rich coastal blue carbon ecosystems or our agrocommodities, carries unassailable environmental integrity, commands premium global pricing and keeps its economic benefits directly within the State,” he said.
Arthur said the DPKK, launched on April 21 this year, marked a transition from establishing frameworks and strategic directions to turning Malaysia’s natural and technological potential into reliable carbon credit supply, robust market demand and bankable infrastructure.
The policy was introduced to support businesses in transitioning and decarbonising while enabling the country to strategically use offsets or carbon credits to achieve its climate ambitions under its Nationally Determined Contribution (NDC).
Malaysia’s updated NDC 3.0, submitted in October 2025, commits the country to peak its greenhouse gas emissions between 2029 and 2034, followed by an absolute emissions reduction of 15 to 30 million tonnes of carbon dioxide equivalent (MtCO2e) by 2035 from peak levels.
“This includes an unconditional reduction of 20 MtCO2e through domestic efforts, and a conditional reduction of an additional 10 MtCO2e supported by international carbon markets, technology transfer and climate finance.
“All of these efforts align with our overarching goal to achieve net zero GHG emissions by 2050,” he said.
Arthur said the DPKK served as Malaysia’s comprehensive carbon market blueprint, covering high integrity voluntary and compliance carbon trading, a National Carbon Registry, harmonised Monitoring, Reporting and Verification (MRV) frameworks, Article 6 authorisation pathways and alignment with sectoral decarbonisation strategies covering energy, forestry, agriculture and industry.
He said NRES had also operationalised Malaysia’s host party participation framework under Article 6.4 and advanced bilateral agreements under Article 6.2 with countries including Singapore and South Korea.
Malaysia was also preparing for mandatory Corsia compliance for international aviation from 2027 to ensure Malaysian generated credits could meet international aviation demand while aligning with the Malaysian Aviation Decarbonisation Blueprint.
At the regional level, he said NRES’ collaboration with the Malaysia Carbon Market Association (MCMA) on the Asean Common Carbon Framework would help ensure domestic standards achieved cross border interoperability.
“However, we will manage our asset exports responsibly. By establishing eligibility whitelists and setting dynamic sales limits, we will safeguard our carbon assets and ensure that international transfers never jeopardise Malaysia’s own unconditional NDC commitments,” he said.
