CCUS - What is it?

Carbon Capture, Utilisation, and Storage (CCUS) is a groundbreaking technology designed to capture carbon dioxide emissions from industrial processes and power generation. These emissions are then either reused or stored underground, preventing them from entering the atmosphere. This process is vital for reducing greenhouse gas emissions, playing a crucial role in mitigating climate change, and facilitating the transition to a low-carbon economy.

The CCUS Progressive Regulatory Framework Bill is scheduled to be presented in Parliament in November 2024. This innovative framework for CCUS is designed to enable Malaysia to secure long-term contracts for CCUS projects. The initiative seeks to attract new investments and generate employment opportunities in the oil and gas services and equipment (OGSE) sector. YB Rafizi highlighted the importance of Malaysia aspiring to become a regional and global leader in CCUS.

The demand for CCUS is expected to rise as companies and countries work to meet climate targets or face carbon taxes. This shift presents a critical opportunity for Malaysia’s OGSE sector to diversify and adapt to the energy transition, addressing the sector's underlying structural challenges. With Malaysia’s oil production projected to decline by 30% in the next five years and energy consumption set to double by 2050, the country risks becoming a net importer of oil and gas rather than an exporter.

YB Rafizi highlighted the root problem: Malaysia's fragmented OGSE sector, which has significantly more players but generates only half the revenue compared to competitors in countries like Norway and the United Kingdom. Specifically, Malaysian companies generate around US$4.1 million in revenue per company, whereas their overseas counterparts generate about seven times more, at US$30 million.

To address these challenges, the OGSE sector must move up the value chain and invest more in research and development to boost productivity. Exploring new opportunities, such as CCUS, is essential. The National Energy Transition Roadmap, released last year, underscores the importance of these trends, indicating that restructuring Malaysia's energy market is crucial not only for achieving net-zero commitments but also for powering the country sustainably by 2050.

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