KUALA LUMPUR (Oct 13): The government has introduced a new scheme that provides rebates of up to RM2,400 for the public to purchase electric motorcycles (e-bikes) next year, as part of efforts to promote electrification of transportation in the country.

However, only those earning an annual income of below RM120,000, or not more than RM10,000 a month, are eligible for the Electric Motorcycle Adoption Incentive Scheme, Prime Minister Datuk Seri Anwar Ibrahim said.

“The government will continue to boost the development of the local electric vehicle (EV) industry and encourage the people's adoption of EVs,” he told Parliament when tabling Budget 2024 on Friday.

Anwar said Putrajaya also proposes to extend the individual income tax relief of up to RM2,500 for the expenditure on EV charging facilities over a period of four years, as well as the tax relief for EV rentals by another two years.

Budget 2022 had introduced this income tax relief for the years of assessment 2022 and 2023.

Anwar said that to realise goals under the National Energy Transition Roadmap, the government has allocated RM2 billion funding under Budget 2024 to facilitate the country’s energy transition.

“In addition, financial institutions also provide financing funds with a total value of RM200 billion to encourage the industry to move towards a low-carbon economy."

Anwar said the government hopes to encourage wider adoption of solar panels as well, hence it intends to extend the Net Energy Metering (NEM) programme until end-2024 to promote installation on the roof of resident premises.

“The government is also developing a solar buyback programme on the roof of buildings with minimum cost implications to the system,” he said.

According to Malaysia’s Sustainable Energy Development Authority (Seda), the NEM 3.0 programme will be in force until the end of 2023, aiming at allocating 500MW of rooftop photovoltaic (PV) capacity.

NEM 3.0 replaced the 500MW NEM 2.0 programme, which was introduced in January 2019 and expired at the end of 2020.

Under the net metering mechanism, which replaced Malaysia’s feed-in tariff incentive scheme in January 2016, surplus power generated by the PV system was paid on a “one-on-one” offset basis, which means every kilowatt-hour injected into the network was offset against a kilowatt-hour of electricity taken from the grid.

Under the previous regime, exported energy carried less value than consumed grid power, according to Seda’s website.

Anwar also pledged to improve the implementation of the Corporate Green Power Programme as one of the measures to implement Third Party Access (TPA), in its bid to achieve the government’s goal towards 70% renewable energy (RE) in its energy mix towards 2050.

“The government will continue to explore the TPA model and develop appropriate ways to implement it in order to drive RE investment in the energy mix,” he said.

Additionally, Anwar said the government intends to extend the tax exemption to fund management companies that manage sustainable and responsible investment (SRI) funds as well as tax deductions on the cost of issuing SRI Sukuk until the year of assessment 2027.

To encourage more businesses to voluntarily participate in Malaysia's carbon market, he said the government proposes an additional RM300,000 tax deductions to companies that spend on Measurement, Reporting and Verification (MRV) related to the development of carbon projects.

“These expenses can be deducted from the income from the sale of carbon credits traded on Bursa Carbon Exchange (BCX),” he added.

Anwar also said Putrajaya will ensure that the Petroleum (Income Tax) Act 1967 remains relevant to the current needs of the oil and gas upstream industry while increasing the interest of foreign investors.

“The Revision Committee of the Petroleum (Income Tax) Act 1967 comprising the Ministry of Finance, Inland Revenue Board and Petronas (Petroliam Nasional Bhd) is reviewing and drafting tax incentives for the carbon capture and storage (CCS) and hydrogen sulphide projects. InsyaAllah, this study will be finalised by the end of this year,” he added.

To drive Putrajaya to become a low-carbon city, Anwar said the government will begin using EVs as its official cars while installing solar panels on public buildings in the federal territory.

He also called on local businesses to offer a “Zero Capital Cost” subscription model for residential housing, similar to those offered by Petronas’ clean energy venture Gentari Sdn Bhd.

“Putrajaya will be the role model in being Malaysia’s low-carbon city. The government will begin installing solar panels on the roofs of public buildings in collaboration with Tenaga Nasional Bhd and Gentari. The federal government will also begin using EV as official vehicles,” he said.

Go here for our comprehensive Budget 2024 coverage.