Kelington Group Berhad, a leading integrated engineering solutions provider, has entered into a strategic collaboration with PETRONAS CCS Solutions Sdn. Bhd. to explore carbon capture technologies. The partnership was formalised through a Memorandum of Understanding (MoU), signed via Kelington’s subsidiary, Ace Gases Marketing Sdn Bhd.
Under the MoU, both parties will carry out a feasibility study focused on Ace Gases’ expertise in carbon dioxide (CO₂) logistics and facility operations. The agreement is valid for one year, with the option to extend by mutual consent.
The collaboration will look for ways both companies can work together to manage carbon emissions more effectively. The study will examine which carbon capture technologies are practical and commercially viable. It will also review facility needs, funding options, and which industries could benefit most. The results should highlight opportunities for future projects in carbon management.
This initiative comes at a crucial time for Malaysia, which recorded annual CO2 emissions of 288.82 million tonnes from fossil fuel and industrial activities in 2023. The feasibility study represents a significant step towards establishing a national carbon capture scheme. If successfully implemented, it could offer CO2 emitters practical pathways to sequester emissions, directly supporting Malaysia’s commitment under the Paris Agreement to reduce carbon intensity by 45% by 2030 and achieve net-zero emissions by 2050.
Carbon sequestration is increasingly recognised as an essential tool for mitigating emissions, particularly in hard-to-abate sectors such as power generation, cement production, and oil and gas refining. The feasibility study will evaluate the scalability of these solutions and their potential impact on Malaysia’s decarbonisation efforts.
Kelington, through Ace Gases, is already active in the carbon management space. The company operates two CO₂ manufacturing plants in Kerteh, Terengganu, where carbon dioxide sourced from PETRONAS’ gas processing operations is purified and liquefied.
The captured CO₂ is then supplied to various sectors, especially the food and beverage industry, for reuse, exemplifying the circular carbon economy in practice. In addition, Ace Gases is investigating further utilisation pathways for captured carbon, including conversion into sustainable fuels such as green methanol, ammonia, and sustainable aviation fuel—initiatives that support the development of a circular carbon economy in Malaysia.
Commenting on the partnership, Kelington CEO Ir. Raymond Gan said, “We believe that the shift towards a low-carbon economy presents not only a responsibility but an opportunity for innovation and growth. As we confront the urgent challenges posed by climate change, technologies like carbon capture and storage have emerged as a vital solution for reducing greenhouse gas emissions.”
The Group aims to combine its expertise in industrial gas processing with PETRONAS CCS Solutions’ industry insights to develop scalable, effective carbon capture solutions.
The collaboration is closely aligned with Malaysia’s National Energy Transition Roadmap, which sets ambitious targets for achieving carbon neutrality by 2050.
With the government planning to introduce a carbon tax by 2026—initially targeting the iron, steel, and energy sectors—Kelington’s carbon management solutions will help industries lower emissions and manage future tax liabilities, supporting Malaysia’s broader decarbonisation objectives.
While the collaboration is not expected to have an immediate financial impact on Kelington’s earnings or net assets, the Group views this strategic partnership as a key step in enhancing its capabilities and positioning for long-term growth in the evolving carbon management sector.
