KUALA LUMPUR (Oct 16): The national Budget 2024 tabled by the Prime Minister Datuk Seri Anwar Ibrahim at the Dewan Rakyat last Friday (Oct 13) included allocations to support energy transition and biodiversity initiatives, and to spur the voluntary carbon market in the country.

Electric vehicles (EVs) are a huge focus under the energy transition category. For instance, the government welcomed investments of more than RM170 million by companies such as Tenaga Nasional Bhd, Gentari Sdn Bhd and Tesla Malaysia to install 180 EV charging stations.

Additionally, to foster the use of electric motorcycles, the government will introduce the Electric Motorcycle Usage Incentive Scheme to those with an annual income of below RM120,000. This scheme will provide up to RM2,400 rebate to buyers.

Meanwhile, Prasarana Malaysia Bhd has agreed to acquire 150 electric buses and build three bus depots at a cost of RM600 million. The government has also suggested extending individual income tax relief of up to RM2,500 on expenses for EV charging facilities for a period of four years and to extend tax deduction for EV rental costs for a period of two years.

As for the adoption of renewable energy sources, the government will extend the Net Energy Metering programme offer period until Dec 31, 2024 to encourage the installation of panels in residential premises. It is also developing a roof solar buyback programme with minimal cost implications, said the prime minister.

At the same time, the government is encouraging companies to offer a zero-capital expenditure subscription model for solar power systems, as offered by Gentari, for the residential properties.

Other than that, the government reiterated its aspirations to realise the National Energy Transition Roadmap through the allocation of RM2 billion as seed funding for the National Energy Transition Facility.

“To achieve the target of 70% renewable energy capacity by 2050, efforts to improve the implementation of the Corporate Green Power Programme will be continued as one of the implementation methods of the Third Party Access (TPA) model,” Anwar said.

The government will continue to explore the TPA model and develop appropriate implementation methods to drive investment in renewable energy capacity.

The government also seeks to repair and maintain public infrastructure, with RM100 million given to maintain streetlights and replacing it with light emitting diodes (LEDs) that can save up to 60% of electricity used.

To encourage more companies to participate in the voluntary carbon market (VCM), the government proposed an additional tax deduction up to RM300,000 for companies that spend on measurement, reporting and verification related to the development of carbon projects.

These expenses can be deducted from the income from carbon credit sales traded at the Bursa Carbon Exchange (BCX).

“The federal government will lead the way in issuing biodiversity sukuk up to RM1 billion, which will be used in reforestation and replanting degraded forests that will in turn, generate carbon credits. The replanting initiative is said to be undertaken in collaboration with interested state governments and will potentially benefit from some of the carbon credit generated,” said the prime minister.

Companies purchase carbon credits, generated from projects that remove, reduce or avoid carbon emissions, from the VCM to offset their own emissions. The BCX launched its first auction in March, using carbon credits generated from projects in China and Cambodia.

In 2024, the allocation for Ecological Fiscal Transfer for Biodiversity Conservation will be increased to RM200 million. To combat invasion, logging and illegal mining, as well as wildlife killings, RM60 million is allocated with a focus on appointing rangers from veteran Malaysian Armed Forces, the Royal Malaysian Police, Orang Asli and local communities.

To encourage more involvement of the private sector in charity or community projects, the government will provide tax deductions to entities that sponsor tree planting activities or environmental preservation and conservation awareness projects certified by the Forest Research Institute Malaysia.

Read also:
Highlights of Budget 2024
Full Budget 2024 speech

Go here for our comprehensive Budget 2024 coverage.