Economic and environmental impact assessment of carbon storage in Malaysia

The global carbon emissions resulting from the combustion of fossil fuels have had a negative impact on the environment. This research presents an in-depth analysis of the economic and environmental impacts associated with carbon storage initiatives in Malaysia. It also explores the distributional effects of carbon pricing and the perception of its regressive nature as a significant challenge. Urgent and thorough measures are necessary to reduce carbon emissions from oil and gas, thereby mitigating the catastrophic consequences of climate change and facilitating a transition towards a more sustainable and environmentally responsible energy system. A comprehensive assessment of the potential impacts of Malaysia's carbon pricing policy on the Organization's economy and environment. Four cases were analyzed: (1) New Field Development, (2) New Field Development with Carbon Tax, (3) New Field Development with CCS and Carbon Tax, and (4) New Field Development with CCS, Carbon Tax, and Subsidy. The results show Internal Rates of Return (IRR) of approximately 16.5%, 14.5%, 12.8%, and 15.0–15.5% respectively. These findings highlight that a combined policy mix (carbon tax + CCS + subsidies) substantially improves economic viability, aligning with global best practices and offering a strong policy pathway for Malaysia.