Carbon Capture & Storage – Can It Work for Malaysia? Climate change is no longer a distant threat, yet the world is winding back on environmental commitments, a shift that risks the long-term detriment of the entire humankind. Climate change will and is reshaping economies, ecosystems, and communities worldwide. From devastating floods in South Asia to record-breaking heatwaves in Europe, the consequences of rising greenhouse gas emissions are becoming impossible to ignore.
Malaysia is not immune to these challenges. As a rapidly industrialising nation, it faces mounting pressure to reconcile economic growth with environmental responsibility. Hence, there is an urgent need for practical, scalable solutions that allow Malaysia to pursue economic growth while reducing emissions, a need that has accelerated interest in carbon capture and storage (CCS).
The idea behind CCS is straightforward: capture carbon dioxide (CO₂) from industrial sources before it reaches the atmosphere, then store it deep underground. Nevertheless, the actual implementation process is far from straightforward. It involves an intricate balance of costs, operational risks, and uncertainties about long-term effectiveness.
This raises an important question: can CCS truly work for Malaysia’s industries, or is it merely an expensive detour from cleaner alternatives?
What Is Carbon Capture and Storage?
CCS is a technology designed to capture carbon dioxide from industrial sources, transport it, and store it deep underground in geological formations such as depleted oil and gas reservoirs or saline aquifers.
As it can capture emissions that are otherwise unavoidable, CCS is considered vital for “hard-to-abate” sectors such as steel, cement, and petrochemicals, where process-related carbon dioxide is released from chemical reactions rather than combustion of fuel. Even with the adoption of renewable energy, these industries would continue to generate residual emissions, positioning CCS as a transitional solution toward cleaner production methods.
Globally, the International Energy Agency (IEA) recognises CCS as an important tool for meeting climate goals, particularly in heavy industries. However, its large-scale deployment remains limited, constrained by economic, technical, and regulatory challenges. While the global experience with CCS remains mixed, Malaysia is beginning to explore this alternative pathway as part of its efforts to reduce industrial emissions.
The Case for CCS
According to the U.S. Trade and Development Agency, Malaysia’s mature oil and gas sector and extensive offshore infrastructure make it highly favorable for CO₂ storage, allowing CCS to transform a major climate challenge into an economic opportunity. Building on this advantage, Petronas is leading efforts to establish Malaysia as a regional hub for carbon storage. It’s Kasawari CCS Project is targeted to store up to 3.3 million tonnes of CO₂ per year in the depleted M1 gas field.
Beyond reducing emissions, CCS also presents significant economic opportunities. PETRONAS and its partners envision exporting carbon storage services to neighboring ASEAN countries, turning depleted reservoirs into commercial assets. The initiative could attract foreign investment, which in turn may spur growth in related sectors such as engineering, logistics, and monitoring. CCS provides a practical bridge toward a lower-carbon economy while supportinfg continued growth by allowing industries to reduce residual emissions without halting production.
The Case Against CCS
While CCS offers economic and industrial opportunities, it comes with significant challenges that make it a risky strategy for Malaysia’s energy transition.
CCS remains prohibitively expensive. The IEA estimates capture costs between USD40-90 per tonne of CO₂ captured and stored, with transport potentially adding another USD10 per tonne. In Malaysia, where carbon pricing is still emerging and the voluntary carbon market is thin, such costs are unsustainable without heavy subsidies. Even on a global scale, CCS faces significant commercial challenges, as global carbon credit prices remain far below CCS break-even levels.
Technical and regulatory uncertainties add further risk. Studies on CO₂ leakage indicate that long-term storage can be compromised by old wellbores and geological faults, requiring decades of monitoring. In addition, monitoring of the performance of these CCS facilities is likely to be outside any existing environmental regulations framework.
There are other environmental concerns as well, including potential impact on marine ecosystems (for offshore CCS) and the risk of induced seismic activity. Without transparent governance and monitoring, there is a risk of significant environmental damage.
Most importantly, CCS can be construed as a “license to pollute” whilst changing nothing. It is essentially a reactive approach that allows us to do more of the same, instead of preventing those emissions in the first place. Furthermore, this store only captures carbon and not other pollutants generated as a result of industrial activities.
The investments in CCS could instead be channelled to accelerate proven, lower-cost renewable solutions. In Malaysia, this trade-off is particularly relevant. Every ringgit invested in CCS infrastructure, including capture facilities, transport systems, and storage sites, is a ringgit not spent on scaling up renewable energy sources, improving grid capacity, or enhancing energy efficiency. These alternative investments will not only cut emissions at their source but also strengthen Malaysia’s long-term shift toward a cleaner and more resilient energy future.