The proposed Environment (Reduction of Greenhouse Gases Emission) Bill, 2023, will pave the way for Sarawak to have its own complete regulatory framework on clean and renewable energy, underlining its status as one of the global leaders in clean energy.
Deputy Minister in the Premier’s Department (Law, MA63, and Federal-State Relations), Datuk Sharifah Hasidah Sayeed Aman Ghazali, said with this, perhaps Sarawak will be on par with other developed countries such as Australia with their own new Hydrogen and Renewable Energy Act 2023.
“The Bill also provides opportunities for Sarawakians to participate in projects and activities that will mitigate the effects of global warming and earn carbon credits for their efforts. These activities will enable Sarawak to have a new source of revenue, enhancing the state’s capacity to develop in an economically sustainable manner,” she said when tabling the Bill on Monday (Nov 20).
She also said that the introduction of the Bill is a clear manifestation of the state government’s firm commitment to achieving net-zero carbon emissions by 2050.
Strategies, action plans, and incentives towards the reduction or abatement of greenhouse gases emission in the state are clearly embodied in the Bill, which is within the legislative competence of this august House to enact.
Hasidah added, the Bill provides for measures and steps to reduce the emission of greenhouse gases.
“The measures provided for in the Bill are, first, to register businesses in scheduled economic sectors listed in the First Schedule, requiring them to submit annual carbon emission reports following international reporting standards. Secondly, it sets carbon emission thresholds and, where any registered business entity is unable or unwilling to bring their carbon emissions down to the emission threshold levels, a carbon levy, at a rate to be determined by the Sarawak Cabinet, would be imposed. Thirdly, to control flaring and venting of petroleum and greenhouse gases by the oil and gas sectors. Fourthly, to promote forest carbon activities, carbon capture, and storage projects, validated according to Carbon Standards Rules for issuing Sarawak carbon credit units,” she said.
Next, she added it is to comply with international Standards for measuring CO2 potentials of each type of Greenhouse gases (GHG) based on the latest Intergovernmental Panel on Climate Change (IPCC) Assessment Report as agreed upon by the United Nations Framework Convention on Climate Change (UNFCCC).
“In addition, it is to ensure verification of Carbon Credit Units for Sarawak projects issued by the Carbon Standard Administrator shall be registered in the Sarawak Carbon Registry, administered by a Registrar appointed by the Minister,” she said.
Apart from that, it is to register verified Carbon Credit Units in the Sarawak Carbon Registry for trading in voluntary or Emission Trading Markets locally or overseas; to record data on Carbon emission reduction in Sarawak and Carbon Credit Units issued which will be furnished to the relevant federal agency for inclusion in the Nationally Determined Contribution (NDC) for reporting to the UNFCCC, with corresponding adjustments where carbon credits units issued for carbon projects or activities in Sarawak are traded or sold overseas.
“Furthermore, it is also to determine the carbon pricing for Sarawak Carbon Credit Units through the Rules under Clause 57 of the Bill,” she said.
Hasidah mentioned the Bill institutes a robust system for project verification and validation by appointed Carbon Standard Administrators.
“This system ensures integrity and credibility for all issued carbon credits from Sarawak, augmenting their value and acceptance in compliance and voluntary markets. It also opens avenues for the government to earn revenue through trading and selling these carbon credits,” she said.
With the passing of the Bill, she said, the government plans to establish an Advisory Panel focused on Climate Change, Carbon Capture, Utilisation, and Storage (CCS), Carbon Credits and pricing, emission thresholds, energy transition strategies, aiming for net zero by 2050, and other pertinent matters.
“I wish to reiterate that the carbon emission reduction and carbon credits issued for projects in Sarawak, which contribute to mitigating the effects of climate change, will be reported to the Federal Government to be included in the Nationally Determined Contribution of Malaysia for submission to the UNFCCC,” she said.
She also said the Bill might result in financial implications for the state, which we currently cannot accurately determine.
“Once the Bill is passed, the Ministry will collaborate with the State Financial Secretary Office to outline the financial requirements for effectively implementing and administering this Ordinance. Subsidiary legislations would have to be passed by the Sarawak Cabinet for the effective implementation of this new law, and in this regard, the Ministry would be guided by the State Attorney-General’s Chambers on the nature and terms of such subsidiary legislations, which will cover matters such as carbon pricing, the rate of carbon levy, carbon emission thresholds, and the scope of the emission report, among others,” she said.
