Malaysia’s steel industry may need to spend an estimated RM970.7 million to meet the requirements of the European Union’s Carbon Border Adjustment Mechanism (CBAM) this year. In response, Malaysia is stepping up efforts to help local steel producers adapt to the new regulations.

The steel industry is an important pillar of Malaysia’s exports. In 2025, the country exported around 6 million tons of steel products, with about 752,000 tons shipped to the European Union, accounting for 12.5% of total export volume and 13% of export value.

To strengthen the industry’s competitiveness, the government said it is working with relevant departments and agencies to introduce a series of measures.

In a statement, the government said CBAM is not only a challenge but also an opportunity to accelerate Malaysia’s transition toward more competitive and sustainable low-carbon steel production.