Malaysia releases details of energy transition roadmap

Climate change expert John Yeap of Pinsent Masons said: “In setting out a road map, Malaysia is showing its commitment to its net zero target. As is to be expected, the drivers for setting out a road map, and the tools available in the toolbox for doing so, are consistent with its neighbours and elsewhere. As an export economy, the implications of legislative developments elsewhere, such as the EU's Carbon Border Adjustment Mechanism and the US Inflation Reduction Act will factor into the need to decarbonise that go beyond just delivering on its net zero commitment. The shift away from fossil fuel will also lead to greater deployment of renewable energy, hydrogen and electrification of the transport sector.” 

The roadmap (19.4MB / 70-page PDF) includes RM2 billion (US$431 million) for a national energy transition fund. Roadmap projects are expected to attract investments of over RM25bn. Energy transition financing will be provided via a combination of grants, loans, rebates, incentives, and other investments to support a national approach.

The road map also aims to build up a national energy transition committee to help with cross-sectoral cooperation in energy policy planning.

The roadmap sets out six energy transition levers including renewable energy, hydrogen, bioenergy, green mobility, energy efficiency and carbon capture, utilisation and storage (CCUS).

In renewable energy, the roadmap aims to install 70% renewable capacity and phase out coal power plant completely by 2050; in hydrogen, it aims to phase out the use of grey hydrogen which is produced by reforming fossil fuels as a feedstock by 2050, to set up a low carbon hydrogen hub by 2030 and another two hubs by 2050; in bioenergy it plans to increase biorefinery capacity to 3.5 billion litres by 2050, and to increase biomass and biogas power generation capacity to 1.4 gigawatts (GW) by 2050.

In CCUS, the roadmap has planned to develop three CCUS hubs with total storage capacity up to 15 million tonnes per annum (Mtpa) by 2030, and to develop another three hubs with total storage capacity between 40 to 80 Mtpa by 2050.

“Malaysia is fortunate in that it was one of the first economies in the region to pioneer independent power producers (IPPs), which means many of the fossil fired power plants that fuelled the dramatic economic growths of the ‘80s and ‘90s are now reaching the end of their economic lives. Nevertheless, as the roadmap itself recognises, the energy trilemma needs to be managed so as to ensure the energy transition delivers the desired benefits in social justice and environmental stewardship whilst ensuring energy security. The detailed implementation of the roadmap, which at its core is the shift away from burning fossil fuel, will need to address this challenge,” Yeap said.

The roadmap updates existing renewable energy policies, including increasing current installed renewable capacity target from 40% in 2040 to 70% by 2050; encouraging investment in the renewable energy value chain and diversifying relevant programmes according to the principle of willing buyer, willing seller; spreading the installation of solar systems in government buildings; and allowing cross-border trade via building up an electricity exchange system.

In July, the government announced 10 flagship projects and initiatives as the phase 1 and phase 2 will focus on building up the low carbon pathway, national energy mix and emission reduction targets, said a report.