Malaysia to extend steel investment moratorium
The Malaysian Star recently reported that the Malaysian Ministry of Investment, Trade and Industry (MITI) has obtained the approval of the Malaysian National Investment Commission (NIC) to extend the two-year steel investment moratorium, which will expire in August this year and will be implemented from August 15, 2023 in response to the rapid expansion of local steel production capacity.
It is reported that the steel investment moratorium covers all inquiries, existing application evaluations, new applications, license transfers, regularization and diversification procedures for manufacturing licenses, and the issuance of production licenses (ICA10) for manufacturing activities in the steel industry (including non-ferrous metal recycling activities) in accordance with Section 156 of the Industrial Coordination Act 1975. If the license is in line with the vision of the New Industrial Master Plan 2030 (NIMP 2030), special approval can be applied, such as high value-added steel product production projects, equipped with low-carbon/carbon reduction technologies such as carbon capture, utilization and storage (CCUS), etc.
The Ministry of Investment, Trade and Industry of Malaysia stated that once the capacity utilization rate of domestic long products enterprises in Malaysia reaches 80%, the moratorium will be reviewed, and an investment moratorium will be implemented for plate products and their upstream processes to restrict large-scale capacity expansion.
Malaysia’s implementation of the steel investment moratorium aims to address the mismatch between local steel production capacity and consumption, promote the adoption of compliant emission technologies in the steel industry, and strengthen sector governance to improve corporate competitiveness and the production level of high value-added steel products.
The Ministry of Investment, Trade and Industry of Malaysia believes that strong governance and industry coordination are needed to support the transformation of the local steel industry. The Malaysian National Investment Commission has agreed to reorganize the Malaysian Steel Institute (MSI) and the Malaysian Steel Council (MSC) to strengthen regulatory enforcement, ensure coordination between institutions, and promote fair competition. The Malaysian National Investment Commission also agreed to accelerate the implementation of carbon taxes and carbon pricing mechanisms for emission-intensive industries.
