Sarawak to compel industries, O&G firms to comply with international requirements to reduce carbon emissions




THE Land Code (Amendment) Bill 2022 makes Sarawak the first Malaysian state to have legislations that will compel industries – including oil and gas – operating in the state to comply with international requirements in reducing carbon emissions.

Deputy Minister in the Premier’s Department (Law, MA63, and State-Federal Relations) Datuk Sharifah Hasidah Sayeed Aman Ghazali said the Bill would empower the State Planning Authority (SPA) to approve sites both on land and offshore in the Continental Shelf within the state’s boundaries as carbon storage sites.

Elaborating further, she said once approved by SPA, licences would be issued for land to be used as carbon storage sites.

“The licences issued would stipulate all the terms and conditions for carbon storage as well as matters incidental thereto. These terms and conditions will set out in the rules under Section 213 after this Bill is passed.

“These rules will encompass mechanisms for trading of carbon credit generated from carbon storage based on international protocol and standards. Carbon storage sites would include depleted oil and gas reservoirs, deep unused saline aquifers, and deep unmineable coal seams,” she said when tabling the today.

The Samariang assemblywoman said studies had been carried out by Petroleum Sarawak Berhad (PETROS), Petroliam Nasional Berhad (PETRONAS), Shell and other oil companies to develop carbon capture, storage technologies, and solutions as well as products from the carbon dioxide kept in storage.

She said with this law in place, foreign investors would find Sarawak a good investment destination that provided well-regulated facilities or sites for them to comply with international laws on carbon dioxide emission reduction and the potential benefits of the commercial utilisation of the carbon dioxide captured and stored in accordance with the law.

“Sarawak has the biggest carbon storage capacity in Malaysia which is estimated at 30 trillion cubic feet (TCF) of storage in offshore areas. Carbon dioxide thus could generate carbon credit equivalent up to RM3.5 billion per year when traded in compliance with carbon standard recognised or accepted internationally.

“I would like to stress that this RM3.5 billion is just our estimates and projection,” she said.

At the same time, she pointed out that the carbon capture, utilisation, and storage (CCUS) industry could also create a projection of up to 10,000 new well-paid jobs in Sarawak.

“The carbon storage could enable the development of energy transition industries such as blue hydrogen, blue ammonia, and other blue industrial products.

“The state could also derive significant revenues from licensing of sites for carbon storage and potential commercial utilisation of the carbon dioxide in storage,” she added.

The Land Code (Amendment) Bill 2022 was unanimously passed on the second day of the 19th Sarawak State Legislative Assembly (DUN).

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