KUALA LUMPUR, Nov 2 ― The Ministry of Investment, Trade and Industry (Miti) will form an independent committee to look at future funding for a zero-carbon iron and steel industry.

The announcement was made by Deputy Investment, Trade and Industry Minister Liew Chin Tong at the Malaysian Iron and Steel Industry Federation Trade Forum today.

He said Miti Minister Datuk Seri Tengku Zafrul Abdul Aziz has decided to form the committee, which HSBC Bank Malaysia chief executive officer Datuk Omar Siddiq Amin Noer Rashid will lead.

"The steel industry contributes 28 per cent of total manufacturing emissions and around four per cent of total national emissions. It is a problem, but it’s also an opportunity for investment in green transition,” he said.

Liew said the government is also ready to incentivise the steel industry in its decarbonisation journey.

"For example, the government can work together with the industry and see how to provide incentives for green transition in the context of the new masterplan,” he said.

Liew noted that Miti has tasked the Malaysia Steel Association (MSA) with formulating a green transition masterplan for the country’s iron and steel industry towards reducing its carbon footprint.

Meanwhile, he said Southeast Asia needs to establish collaborative efforts and dialogues to address the significant overcapacity faced by the region’s steel industry.

The deputy minister said regional countries should also engage with China to emulate its success in overcoming overcapacity, where it removed 150 million tonnes of capacity from the steel industry in 2020.

"I would like to propose the Malaysian government and the industry to work with China on understanding the capacity in Southeast Asia and Malaysia.

"Secondly is to work with Southeast Asia at the bilateral level to see what we can do about overcapacity. I think there is a need to elevate this agenda to some of the Asean discussions,” he said.

Citing research by the South East Asia Iron and Steel Institute, Liew said that in 2021, Southeast Asia had 75.3 million tonnes of steel capacity and was on a rising trend.

"If we do nothing, by 2026, it may go up to 151.9 million tonnes. So, the region needs to talk to each other about dealing with all overcapacity challenges,” he added. ― Bernama