KUCHING, April 15 2026: The Sarawak government has approved a 50 percent reduction in royalty rates and selected statutory charges for natural forest logs from all Forest Logging Licenses (FTL) and Forest Plantation Licenses (LPF) except for Timber Industry Tariff H0272502.
Forest Department in a media statement today said that this temporary measure will be implemented within two weeks to allow for system updates and will be in effect for one year, subject to re-evaluation.
The department explained that this timely initiative reflects the Sarawak government's commitment in supporting the forestry and timber industry which is currently facing rising fuel prices, global market uncertainties, supply chain disruptions and increasing operating costs.
"This reduction aims to provide immediate cost relief, improve operational viability, stabilise profit margins, strengthen domestic timber processing, and ensure continued industry participation and supply stability.
"Current trends show that rising costs have driven a shift to export-oriented production due to higher margins, while domestic processing activities are showing a decline," the department said.
It added that this move is expected to rebalance the sector by increasing the competitiveness of local processing and strengthening the overall timber industry value chain.
The department saidd that production is expected to stabilise at around 1.73 million cubic metres per year, reflecting increased industry confidence.
At the same time, it said, Sarawak remains committed to forest restoration and environmental sustainability. The State Government is actively implementing the Sarawak Greening Campaign and the Forest Landscape Restoration (FLR) initiative as among the main pillars of the environmental agenda.
"For the period 2021 to 2025, more than 57 million trees have been planted throughout Sarawak, thus recording the highest tree planting achievement in Malaysia.
“This effort contributes to the restoration of degraded forest landscapes, the preservation of biodiversity, increased carbon sequestration, the protection of watersheds and ensuring the long-term sustainability of forest resources.
"Alongside this, Sarawak is also strengthening the development of large-scale plantation forests to reduce dependence on natural forest timber.
"These plantation forests provide a sustainable source of raw materials for the timber industry, as well as supporting the production of renewable energy through wood pellets and bio-char," the department added.
“While providing targeted support to industry players, the Sarawak government remains committed to sustainable forest management and responsible resource use.
“This decision reflects a 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,” it added.
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