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Rising global temperatures driven by carbon emissions pose significant challenges for developing economies such as Malaysia, where dependence on fossil fuels constrains energy transition. This study introduces a Fuel Switching Variable to assess shifts from coal and oil to natural gas within the industrial sector. Using the Autoregressive Distributed Lag approach, findings indicate that fuel switching significantly reduces emissions, while gas consumption enhances industrial output in both the short and long run. Natural gas thus represents a viable transitional pathway balancing environmental sustainability and industrial growth, with implications for energy policy and infrastructure development.