Depth report

　　

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 that will expire in August this year, starting from August 15, 2023, in response to the rapid expansion of local steel production capacity.

The steel investment suspension order covers all enquiries, evaluation of existing applications, new applications, transfer of licences, formalisation and diversification of manufacturing licences, and issuance of production licences for manufacturing activities in the steel industry pursuant to Section 156 of the Industrial Harmonisation Act 1975 (ICA10). If the relevant license meets the vision of the New Industrial Master Plan 2030 (NIMP2030), it can apply for special approval, such as high value-added steel product production projects, equipped with carbon capture, utilization and storage (CCUS) and other low carbon/carbon reduction technologies.

Malaysia's Ministry of Investment, Trade and Industry said that for long materials and their upstream processes, once the capacity utilization rate of Malaysia's domestic long materials enterprises reaches 80%, the suspension order will be reviewed, and the investment suspension order will be implemented for panel products and their upstream processes to limit large-scale capacity expansion.

The implementation of the steel investment moratorium in Malaysia 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 sectoral governance to improve corporate competitiveness and production levels of high value-added steel products.

Malaysia's Ministry of Investment, Trade and Industry believes that strong governance and industry coordination are needed to support the transformation of the local steel industry. The Malaysian State Investment Commission has agreed to restructure the Malaysian Iron and Steel Institute (MSI) and the Malaysian Steel Commission (MSC) to strengthen regulatory enforcement, ensure coordination among agencies and promote fair competition. The Malaysian State Investment Commission also agreed to accelerate the implementation of carbon taxes and carbon pricing mechanisms for emissions-intensive industries.