The Ministry of Investment, Trade, and Industry (Miti) has received approval from the National Investment Council (NIC) to extend the current moratorium for the Malaysian iron and steel sector, which was set to end in August 2025. The extension covers the upstream sector of long steel products, and a review of the moratorium period will be carried out once existing domestic players reach nearly 80% capacity utilization.

Miti will also extend the moratorium on the upstream sector of flat steel products and limit large capacity expansions. This approach aims to address the mismatch between capacity and domestic usage, improve industry practices towards emissions compliance technologies, and enhance sector governance to boost competitiveness and the production of high-value-added steel products.

The NIC has agreed to restructure the Malaysia Steel Institute (MSI) and the Malaysian Steel Council (MSC) to strengthen and prioritize their functions. This restructuring will enhance regulatory enforcement, ensure coordination between key agencies, and promote fair competition. It will also improve capacity management by increasing transparency and enhancing the competitiveness and economy of the sector. The strengthened institutions will play a significant role in driving the decarbonization pathway for the steel sector.

The NIC also agreed with Miti's proposal for the government to accelerate the implementation and restructuring of carbon tax and carbon pricing mechanisms for emission-intensive industries, with the steel sector leading the compliance efforts for other sectors. Miti will develop a decarbonization roadmap, including regulations to measure, report, and verify (MRV) greenhouse gas (GHG) emissions levels for all steel players in Malaysia, as a foundational building block for carbon pricing and other carbon mechanisms.