Sarawak cuts forest timber royalties by 50% in major relief move to strengthen industry

File photo for illustration purpose only. Photo credit: Pixabay

By DayakDaily Team

KUCHING, April 15: The Sarawak government has approved a 50 per cent reduction in royalty rates and selected statutory charges for natural forest logs from all Forest Timber Licences (FTLs) and Licences for Planted Forests (LPFs), excluding Timber Industries Tariff H0272502.

Premier of Sarawak, Datuk Patinggi Tan Sri Abang Johari Tun Openg, said the temporary measure will be implemented within two weeks to allow for system updates, and will remain in effect for one year, subject to review.

He said the initiative reflects the State government’s continued commitment to supporting the forestry and timber industry amid rising fuel prices, global market volatility, supply chain disruptions, and increasing operational costs.

“The reduction is intended to provide immediate cost relief, improve operational viability, stabilise profit margins, strengthen domestic timber processing, and ensure continued industry participation and supply chain stability,” he said in a statement issued by the Forest Department Sarawak today.

He highlighted that recent trends have shown that rising costs have encouraged a shift towards export-oriented production due to higher margins, while domestic processing activities have declined.

“The measure is expected to help rebalance the sector by improving the competitiveness of local processing industries and strengthening the overall timber value chain. Production is projected to stabilise at around 1.73 million cubic metres annually, reflecting renewed industry confidence,” he added.

Beyond short-term support, Sarawak remains firmly committed to forest restoration and long-term sustainability with the State has actively implemented the Greening Sarawak Campaign and Forest Landscape Restoration (FLR) initiatives as key pillars of its environmental agenda.

From 2021 to 2025, Abang Johari emphasised that more than 57 million trees have been planted across Sarawak, the highest tree-planting achievement in Malaysia.

“These efforts are contributing to the restoration of degraded forest landscapes, enhancement of biodiversity, improved carbon sequestration, protection of water catchments, and long-term sustainability of forest resources,” he said.

In parallel, Sarawak is advancing large-scale planted forest development to reduce reliance on natural forest timber. These plantations provide sustainable raw materials for the timber industry while also supporting renewable energy production through wood pellets and biochar.

The State is also promoting a waste-to-energy approach by converting wood residues and by-products into valuable energy resources. This initiative improves resource efficiency, reduces waste, creates new economic opportunities, and supports Sarawak’s transition towards a green and circular economy.

While providing targeted support to industry players, the State government reiterated its commitment to sustainable forest management and responsible resource utilisation.

“This decision underscores our pragmatic and responsive approach in addressing current economic challenges, while ensuring that the forestry sector remains resilient, competitive, and sustainable for the future of Sarawak,” Premier added. — DayakDaily