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Malaysia is preparing a roadmap to transform its steel industry into a fully green sector by 2050. The plan aims to manage overcapacity, restructure licensing, and prepare for decarbonisation. Measures include clear licensing guidelines, carbon pricing, transparency frameworks, and better access to finance for green and high-value production. The industry faces challenges such as high carbon intensity and a supply-demand imbalance. Malaysia also recommends ASEAN collaboration through shared databases, common decarbonisation pathways, and green steel hubs to improve competitiveness and support sustainable growth in the regional steel market.
Malaysia has introduced a plan to restructure its steel sector with the goal of making it fully green by 2050. The roadmap focuses on managing overcapacity, updating licensing requirements, and supporting decarbonisation while improving efficiency and competitiveness. Advertisement
The 10-year roadmap includes creating clear and consistent licensing guidelines for steel manufacturers, implementing a carbon pricing system with transparency measures, and expanding access to finance to support the transition to greener and higher value-added production. Trade minister Tengku Zafrul Aziz highlighted that steel is among the country's most carbon-intensive industries, making decarbonisation essential to comply with regulations and access international markets.
The industry faces a significant imbalance between domestic supply and demand. By 2030, upstream capacity could reach 40.8 million tonnes, while domestic demand is projected at only 14.7 million tonnes. This overcapacity results in underutilised assets, lower returns on investment, and reduced competitiveness in regional and global markets.
Tengku Zafrul suggested that ASEAN countries could create a regional database tracking capacity and utilisation to address overcapacity, dumping, and transshipment issues. He also recommended that Southeast Asian nations explore a common decarbonisation pathway and consider establishing hubs for green steel production. Such collaboration would enhance regional competitiveness and support the transition to sustainable steel manufacturing.
The roadmap also aligns with Malaysia's broader industrial strategy, which seeks to modernise traditional sectors while meeting environmental targets. By combining policy reforms, financial incentives, and regional cooperation, the plan aims to balance economic growth with sustainability, ensuring that the steel industry remains resilient and capable of meeting future demand for environmentally friendly products.
Source Reuters
5th Jun, 2025
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