Steel is more than just a commodity in Malaysia, it is the backbone of construction, infrastructure and manufacturing. Recognized by the Independent Steel Committee under the Ministry of Investment, Trade and Industry (MITI), the industry is both indispensable to economic growth and one of the most carbon-intensive globally. This dual identity places steel at the center of Malaysia’s sustainability challenge.
Legal and Policy Shifts
Trade Defence Reforms
In 2025, Malaysia introduced significant amendments to the Countervailing and Anti-Dumping Duties Act. These reforms redefined dumping by shifting the benchmark from Malaysian domestic prices to the exporter’s home market value, aligning with World Trade Organizations’ (WTO) standards and closing loopholes that previously allowed price manipulation. Additionally, sunset clauses were introduced that ensures duties lapse after five years unless expiry reviews justify their continuation. These changes aim to strengthen Malaysia’s trade defence mechanisms while maintaining compliance with international trade rules.
Steel Roadmap 2035 and the proposed Steel Industry Bill
The Steel Industry Roadmap 2035 embeds Environmental, Social and Governance (ESG) compliance and low-carbon transition strategies into sectoral regulation through the proposed Steel Industry Bill. This legislative framework positions the steel industry as a proving ground for aligning sustainability objectives with industrial policy, signaling Malaysia’s commitment to a greener industrial future.
Dual Stress-Test for the Industry
The steel sector faces a dual challenge. On one hand, trade defence reforms provide stronger tools to protect domestic producers from unfair imports. On the other hand, ESG regulations impose obligations to demonstrate sustainability, governance and supply-chain oversight. Together, these frameworks test steelmakers on both market fairness and sustainability credibility, requiring a balanced approach to compliance and competitiveness.
Implications for Stakeholders
The convergence of Malaysia’s amended trade defence law and the forthcoming Steel Industry Bill creates a layered regulatory environment that reshapes the steel sector in profound ways.
For regulators, the task ahead is complex. Regulators must navigate the complex task of balancing WTO-aligned evidentiary standards with the integration of ESG data. This necessitates enhanced institutional capacity to interpret sustainability metrics credibly and enforce compliance effectively.
For steelmakers, the reforms offer protection from unfair imports but also bring rising compliance costs. Injury claims now must reference both economic indicators and ESG performance, creating a more comprehensive assessment framework. This environment presents an opportunity for Malaysian steel producers to position themselves competitively as suppliers of ‘green steel’ and leveraging sustainability as a market differentiator.
Importers and exporters face stricter documentation requirements and ESG-linked supply chain scrutiny. Exporters must defend their pricing practices under the new dumping definition while importers need to align sourcing strategies with both trade defence and sustainability standards thus ensuring compliance across the supply chain.
Financers are compelled to factor in overlapping risks arising from duties and ESG obligations when making lending decisions. They must stress-test financing models against regulatory scrutiny and prioritize capital allocation to producers who leverage ESG compliance as a competitive advantage.
Malaysia’s steel industry stands at the intersection of trade defence and ESG regulation. While compliance costs are rising, so too is the opportunity to compete globally as a credible supplier of green steel. Regulators, financiers and traders must integrate fairness and sustainability into a coherent industrial strategy. Ultimately, steel is not just Malaysia’s industrial backbone, it is the proving ground for reconciling economic competitiveness with environmental responsibility under global ESG scrutiny.
At Halim Hong & Quek, our ESG Service Line provides trade defence advisory and carbon market legal advisory to support corporations in navigating regulatory change and sustainability obligations. We assist clients in strengthening compliance with evolving ESG standards and sector‑specific regulations, ensuring resilience in the transition toward a low‑carbon economy.
Should your organization has any enquiry relating to trade defence or carbon market legal advisory, we would be pleased to assist. Please feel free to contact us at [email protected].
Malaysia’s Steel Sector: From Trade Defence to Green Transition
Steel is more than just a commodity in Malaysia, it is the backbone of construction, infrastructure and manufacturing. Recognized by the Independent Steel Committee under the Ministry of Investment, Trade and Industry (MITI), the industry is both indispensable to economic growth and one of the most carbon-intensive globally. This dual identity places steel at the center of Malaysia’s sustainability challenge.
Legal and Policy Shifts
Trade Defence Reforms
In 2025, Malaysia introduced significant amendments to the Countervailing and Anti-Dumping Duties Act. These reforms redefined dumping by shifting the benchmark from Malaysian domestic prices to the exporter’s home market value, aligning with World Trade Organizations’ (WTO) standards and closing loopholes that previously allowed price manipulation. Additionally, sunset clauses were introduced that ensures duties lapse after five years unless expiry reviews justify their continuation. These changes aim to strengthen Malaysia’s trade defence mechanisms while maintaining compliance with international trade rules.
Steel Roadmap 2035 and the proposed Steel Industry Bill
The Steel Industry Roadmap 2035 embeds Environmental, Social and Governance (ESG) compliance and low-carbon transition strategies into sectoral regulation through the proposed Steel Industry Bill. This legislative framework positions the steel industry as a proving ground for aligning sustainability objectives with industrial policy, signaling Malaysia’s commitment to a greener industrial future.
Dual Stress-Test for the Industry
The steel sector faces a dual challenge. On one hand, trade defence reforms provide stronger tools to protect domestic producers from unfair imports. On the other hand, ESG regulations impose obligations to demonstrate sustainability, governance and supply-chain oversight. Together, these frameworks test steelmakers on both market fairness and sustainability credibility, requiring a balanced approach to compliance and competitiveness.
Implications for Stakeholders
The convergence of Malaysia’s amended trade defence law and the forthcoming Steel Industry Bill creates a layered regulatory environment that reshapes the steel sector in profound ways.
For regulators, the task ahead is complex. Regulators must navigate the complex task of balancing WTO-aligned evidentiary standards with the integration of ESG data. This necessitates enhanced institutional capacity to interpret sustainability metrics credibly and enforce compliance effectively.
For steelmakers, the reforms offer protection from unfair imports but also bring rising compliance costs. Injury claims now must reference both economic indicators and ESG performance, creating a more comprehensive assessment framework. This environment presents an opportunity for Malaysian steel producers to position themselves competitively as suppliers of ‘green steel’ and leveraging sustainability as a market differentiator.
Importers and exporters face stricter documentation requirements and ESG-linked supply chain scrutiny. Exporters must defend their pricing practices under the new dumping definition while importers need to align sourcing strategies with both trade defence and sustainability standards thus ensuring compliance across the supply chain.
Financers are compelled to factor in overlapping risks arising from duties and ESG obligations when making lending decisions. They must stress-test financing models against regulatory scrutiny and prioritize capital allocation to producers who leverage ESG compliance as a competitive advantage.
Malaysia’s steel industry stands at the intersection of trade defence and ESG regulation. While compliance costs are rising, so too is the opportunity to compete globally as a credible supplier of green steel. Regulators, financiers and traders must integrate fairness and sustainability into a coherent industrial strategy. Ultimately, steel is not just Malaysia’s industrial backbone, it is the proving ground for reconciling economic competitiveness with environmental responsibility under global ESG scrutiny.
At Halim Hong & Quek, our ESG Service Line provides trade defence advisory and carbon market legal advisory to support corporations in navigating regulatory change and sustainability obligations. We assist clients in strengthening compliance with evolving ESG standards and sector‑specific regulations, ensuring resilience in the transition toward a low‑carbon economy.
Should your organization has any enquiry relating to trade defence or carbon market legal advisory, we would be pleased to assist. Please feel free to contact us at [email protected].
About the author
Tan Poh Yee
Senior Associate
ESG Practice Group
Halim Hong & Quek
[email protected]
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