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Charting A Green Course – Unpacking Malaysia’s National Energy Transition Roadmap (NETR)

The world is changing rapidly, and energy is the single biggest driver of this transformation. With 2023 set to be Earth’s hottest year on record, countries have been racing to replace carbon-intensive fossil fuels with cleaner and more sustainable energy solutions. Transitioning to a climate-resilient energy system is now critical for staving off devastating climate risks and securing a livable future for all.

Malaysia too is resolute in overcoming these challenges, marking a new milestone with the recent unveiling of the National Energy Transition Roadmap (NETR). Building on the foundations laid by the 12th Malaysia Plan and the National Energy Policy 2022-2040, the NETR comprehensively charts the nation’s trajectory towards a brighter, cleaner, and more resilient future.

Reshaping Malaysia’s energy landscape

As the global energy landscape undergoes rapid transformation – more decentralised, decarbonised, and digitalised energy systems will raise new challenges for managing the energy trilemma of security, affordability, and sustainability. There is no ‘one-size-fits-all’ approach, and each nation’s transition journey must be determined from the bottom up by diverse stakeholders to ensure it remains just.

To this end, the Ministry of Economy undertook an extensive consultative approach involving policymakers, stakeholders, technology experts, and businesses to analyse and appraise best practices, lessons learned, and both existing and proposed initiatives. This feedback has played a crucial role in shaping the scope and fine-tuning the projects, initiatives, and enablers of the NETR.

In addition, the NETR’s Project Team included representatives from the Energy Commission (ST), Sustainable Energy Development Authority (SEDA), Malaysian Green Technology and Climate Change Corporation (MGTC), PETRONAS and Tenaga Nasional Berhad (TNB) to leverage their diverse expertise in ensuring the NETR’s strategies and plans meet the needs of wider stakeholders.

As a result, the NETR represents the best-fit ambition for Malaysia to strike the right balance between environmental mitigation and the need to bolster net socioeconomic values like GDP and job creation. It serves as a guiding beacon for Malaysia, offering clarity and coherence in formulating policies and executing strategies for the march forward towards a more sustainable, equitable, and resilient future.

Roadmap to a high-value, green economy

The development of the NETR is divided into two parts. Part 1 outlines 10 flagship catalyst projects and impact initiatives, based on six energy transition levers, that would be undertaken to facilitate Malaysia’s transition to a clean-energy, low-carbon economy. These six levers are further supported by five cross-cutting enablers that will be vital to expediting the energy transition journey.

More than 50 initiatives are outlined under the six energy transition levers and five enablers, collectively aiming to power Malaysia’s future by unlocking potential in new growth areas and delivering progress and prosperity to all Malaysians. This includes investments in the electric vehicle (EV) value chain, hydrogen, and carbon capture and usage storage (CCUs) technologies.

Meanwhile, Part 2 focuses on establishing the energy mix and greenhouse gases (GHG) emissions reduction pathways, along with selected targets and initiatives. Rooted in Malaysia’s overarching aspirations to achieve net zero as early as 2050, the NETR’s Responsible Transition (RT) scenario will deliver a 32% reduction in GHG emissions for the energy sector compared to the 2019 baseline.

Overall, the RT pathway is designed to accelerate Malaysia’s energy transition journey while balancing the energy trilemma, helping Malaysia to shift from traditional, fossil fuel-based energy systems to a greener, low-carbon energy framework. With this transition, coal will be close to fully phased-out, while renewable energy (RE) will increase from 4% in 2023 to 22% by 2050.

An equitable energy transition that works for all

The NETR’s accelerated ambition aims to not only propel Malaysia’s energy shift towards achieving the net-zero ambition, but also to generate meaningful socioeconomic outcomes for the nation by generating new sources of growth, creating business and trade opportunities, and consequently, giving rise to a new generation of knowledge workers.

The energy transition will catalyse growth in nascent areas such as green mobility ecosystems, RE, energy storage, and alternative new energy ecosystems. Taking a pioneering role in these emerging areas will enhance Malaysia’s competitive advantage, which is estimated to generate investment opportunities .

These investments will contribute an additional GDP of up to 15% or RM220 billion, while creating approximately 310,000 green growth job opportunities in future-prof sectors across the country by 2050. Economic benefits will be felt across the social spectrum with medium and low-income households expected to be the biggest beneficiaries, taking up 70% of expected income gains.

Nonetheless, the government also recognises the need to carefully manage the energy transition, given the varying impact on jobs nationwide. While the energy transition will foster job creation, particularly in new green growth areas, other non-green areas may experience a decline. This underscores the importance of greening the economy in a way that is fair and inclusive for everyone.

Delivering a new future of energy, together

 The NETR is not just a document about measures to meet Malaysia’s net-zero ambitions, but more fundamentally represents a new way of thinking to transform Malaysia’s economy and livelihoods for a stronger and more resilient future. It encapsulates the aspirations of all stakeholders, from industry leaders to ordinary Malaysians, who envision a harmonious coexistence with our planet.

On this momentous journey, it is important to remember that the transition to a low-carbon future is not merely a policy objective, but a moral imperative. Through NETR, the government aspires to trailblaze a development path that is not solely hinged on energy, but a larger collective resolve of stewardship and responsibility to secure the well-being of our children and the generations to come.

As Malaysians, each and every one of us has a role to play in delivering on the promises and goals of the NETR. We must stand united and resolute through a coordinated whole-of-nation approach – taking bold steps together, forging collaborations, and harnessing our collective strengths in the pursuit of a more sustainable and prosperous future.

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