KUALA LUMPUR, Dec 29- The implementation of the carbon tax is expected to transform Malaysia's carbon market, apart from encouraging the industry to reduce carbon emissions.

Engie Services Malaysia Sdn Bhd Managing Director Wong Yin Kee in a statement said that the carbon tax is expected to complement the Carbon Exchange's efforts on Bursa Malaysia.

The effort provides a transparent price signal and allows companies to trade carbon credits by reducing emissions.

"This step is capable of making Malaysia a major player in the global carbon market, in line with the mechanism of Article 6.4 of the Paris Agreement.

"The Article 6.4 mechanism allows countries to trade carbon emission reductions," the statement read.

In the meantime, cooperation between the government, industry and stakeholders is important to ensure that the carbon tax aligns with the National Energy Transition Plan.

In the Budget 2025, the government announced a plan to implement a carbon tax for the iron, steel and energy sectors by 2026.

This move is testament to the commitment towards the country's emission reduction goals.