He said the Cabinet had decided on this following a directive from Prime Minister Anwar Ibrahim, according to a Bernama report.

Apart from laws and regulations on carbon trading, the bill would include tax schemes and other related issues.

Fadillah, who is also the energy transition and water transformation minister, noted that the Sarawak government had passed similar legislation in the state assembly.

“I agree that Sarawak is quite advanced in terms of laws (on carbon trading),” he told reporters after attending the closing ceremony of the Asia Pacific Green Hydrogen Conference and Exhibition 2024 in Kuching today.

“The state government has approved it in the state assembly, and now the challenge is at the national level.”

He was commenting on a recent suggestion by Sarawak premier Abang Johari Openg for the federal government to improve existing legislation regarding the energy business by including matters related to carbon trading.

Sarawak became the first Malaysian state to enact legislation related to carbon trading in November last year, after the state assembly passed the Environment (Greenhouse Gas Emissions Reduction) Bill 2023.

The bill is aimed at mitigating climate change and paved the way for Sarawak to earn revenue through the trade or sale of carbon credits.