Budget 2026: Carbon tax to be introduced next year – PM Anwar

KUALA LUMPUR - The government will be introducing the Carbon Tax next year, starting with the iron, steel and energy sectors, said Prime Minister Datuk Seri Anwar Ibrahim.

Anwar, who is also the Finance Minister, said the implementation of the Carbon Tax will be aligned with the forthcoming National Carbon Market Policy and the Climate Change Bill to ensure effective execution.

"The National Energy Transition Roadmap (NETR) continues to be driven by industry players, supported by the RM150 million National Energy Transition Fund," he said when tabling Budget 2026 in the Dewan Rakyat today.

Meanwhile, he said the Green Technology Financing Scheme (GTFS 5.0), with a total financing value of RM1 billion, will remain available until Dec 31, 2026, offering government guarantee incentives of up to 80 per cent for green technology projects in the waste sector, and up to 60 per cent for other sectors such as energy, water, transport and manufacturing.

"To promote sustainable living, rebates will continue to be offered for the purchase of energy-efficient appliances by consumers and businesses, with an allocation of RM20 million.

Government also moved the tax relief for the purchase of composting machines from the electric vehicle (EV) charging equipment category to the lifestyle category. Photo for illustration purposes only.

"The government also plans to expand the individual income tax relief of RM2,500 to include the purchase of food waste composting machines to encourage a more sustainable lifestyle," he added. - BERNAMA