(Nov 23): The talk of net-zero has been echoed by companies and governments alike in the pursuit of energy transition.

Exploring energy-efficient measures is essential to enhance the overall efficiency of any energy transition.

“Companies' strategies vary by sector. Listed companies, those in the financial sector and large firms have begun the process of scoping their emissions. Some in the steel industry are engaging in efficiency upgrades. Oil and gas [companies] are particularly interested in carbon capture and storage, though regulatory uncertainty and costs are still issues,” says Yin Shao Loong, deputy director of research at Khazanah Research Institute.

“Renewable energy is only the second step in reducing emissions. Energy efficiency measures must come first and foremost and will make any energy transition more efficient,” he says.

Thus, implementing energy and resource conservation measures are crucial in ensuring proper energy transition to take place especially amongst those who are high-carbon emitters.

In the context of “net zero”, this term signifies a state where the amount of greenhouse gases (GHG) released into the atmosphere is offset by the removal of these gases from the atmosphere.

“It is important to recall that the carbon footprint of a company includes not just energy use but GHG emissions from industrial processes and waste management as well,” says Dr Gary William Theseira, a consultant technical advisor for climate action and sustainability at the Malaysian Green Technology and Climate Change Centre.

“Where possible, companies that directly consume fossil fuels should consider replacing them with renewable biofuel alternatives [like fuel switching] or substituting carbon-intense fossil fuels such as coal with less carbon [intensive] fuels such as natural gas, or even better, biogas,” he says.

Fuel-switching stands as one of the most straightforward methods to manage acid gas emissions. It entails substituting high-sulphur fuels with low-sulphur options. The most prevalent form of this practice involves exchanging high-sulphur coal for low-sulphur coal. Alternatively, coal can be entirely replaced with oil or natural gas, reports The European Environment Agency.

Theseira also suggests that companies should also consider supplementing their grid electricity consumption with photovoltaic (PV) electricity from their own rooftops.

Moreover, companies need to listen to science, advises Yin.

“The United Nations (UN) climate science body Intergovernmental Panel on Climate Change (IPCC) defines net zero emissions of greenhouse gases to the atmosphere as being achieved when anthropogenic emissions of GHG to the atmosphere are balanced by anthropogenic removals over a specified period of time,” says Yin.

“Removals can refer to carbon sinks such as forests and the oceans, or more controversial technological methods such as geographical storage.”

This shows that transition is crucial and effective steps need to be taken. However, improper transition will lead to no fruition.

“The most obvious scenario of an improper transition is, of course, no transition. This means that the current inefficient energy use and fossil sources remain as the primary sources of energy in the country. In this scenario, the transportation infrastructure and national electricity grids, mobility, and other systems are not decarbonised and all economic activities, including Malaysian products and services, are designated as high-emissions,” says Theseira.

Theseira explains that the first, is a loss of competitive advantage of Malaysian products and services in international markets due to the imposition of carbon border adjustment mechanisms, import taxes and similar emission-based levies. Ultimately, such products and services could conceivably be denied access to markets.

“The second will be a loss of foreign direct investment in the country. No investor will want to produce products or deliver services that are not acceptable and competitive on the global markets. If this situation is allowed to persist, the divestment of foreign capital will be followed by a flight of domestic capital as local investors follow the international investment to countries demonstrating greater climate ambition and commitment to low-carbon energy and national infrastructure,” he adds.

Transition roadmaps are key in this pursuit. As such, Malaysia needs to transition away from fossil fuels towards renewable energy consistent with national development aspirations and energy security. This includes historical responsibility for climate change, sustainable management of its stock of carbon sinks and its climate policy targets of reducing emissions and achieving net-zero.

“A transition roadmap will help give greater policy certainty to stakeholders including consumers, firms, investors and government itself,” advises Yin.

For instance, the 12th Malaysia Plan, spanning from 2021 to 2025, reflects Malaysia’s dedication to achieving net-zero greenhouse gas (GHG) emissions by 2050. Concurrently, the National Energy Policy for 2022-2040 (DTN) establishes the groundwork for a just and inclusive energy transition.

Other than that, to expedite the energy transition efforts, the Ministry of Economy alongside the Malaysian government has formulated the National Energy Transition Roadmap (NETR). The roadmap is crucial for guiding Malaysia's shift from a traditional fossil fuel-based economy to a high-value green economy. The NETR necessitates a collective approach involving the federal and state governments, industry, the general public, and the international community.

On July 27, the government inaugurated 10 flagship catalyst projects outlined in the NETR, covering six key areas of energy transition, energy efficiency, renewable energy, hydrogen, bioenergy, green mobility, and carbon capture, utilisation and storage (CCUS).

The Ministry of Economy expects to attract investment of more than RM25 billion, create 23,000 job opportunities and reduce GHG emissions by more than 10,000 Gg CO2eq per year.

Additionally, the NETR creates the pathway for national energy mix, GHG emission reduction and energy transition initiatives. This reinforces Malaysia’s commitment to net-zero emissions
as early as 2050 despite contributing only 0.8% to global GHG.  

By 2050, NETR initiatives are expected to deliver at least 32% reduction in GHG emissions for the energy sector compared to the 2019 baseline — reaching 4.3 MtCo2eq emission per capita.

In September, the prime minister also launched the National Industrial Master Plan 2030 which also echoes a similar sentiment to the NETR when it comes to outlining the country’s path forward in the low-carbon global economy.

Apart from that, during the opening ceremony of the 14th International Greentech and Eco Products Exhibition and Conference Malaysia (IGEM) 2023 on Oct 5, Malaysia’s Hydrogen Economy and Technology Roadmap (HETR) was unveiled positioning the nation at the forefront of energy transformation and aiming to take a leading role in the regional renewable energy (RE) sector.

According to news reports, Deputy Prime Minister Datuk Seri Fadillah Yusof said during the launch that the successful implementation of the HETR will enable Malaysia to tap into the global green hydrogen market, estimated to be worth at least US$189.19 billion (RM824 billion) by 2050.

With all the talk of energy transitions and policy commitments, what are the steps that Malaysia should undertake? The first crucial step is to phase out coal, says Adam Farhan, director and co-founder of RimbaWatch (formerly known as the Rimba Disclosure Project).

“Coal should be phased out with immediate effect, quickly followed by natural gas; any use of natural gas as a transition fuel should be minimal and all efforts should be placed on increasing the uptake of proven renewable solutions, including solar, mini or micro hydro and floating solar on dam reservoirs. Malaysia needs to approach the energy transition with an explicit focus of removing fossil fuels from the energy mix as soon as possible,” asserts Adam.

Another alternative is bio-coal sourced from agriculture waste, bio-methane sourced from landfills and small run-of-river (ROR) hydropower as sources of energy.

Sharan Raj, an infrastructure policy analyst, recommends bio-coal as another energy efficient alternative to transition to.

“Small ROR hydropower generates electricity from natural river flow. Biomethane should be captured from palm oil mill effluent, landfills, cattle manure and Indah Water Konsortium Sdn Bhd sewerage plants.

“Capturing bio-methane is quite cheap and easier for these entities to undertake. The bio-methane should be injected into natural gas pipelines to displace fossil-methane consumed by gas power plants,” says Sharan.

He explains that methane is a more potent GHG than carbon dioxide.

“Currently, bio-methane is being released into the atmosphere accelerating the climate crisis. Bio-methane combusted in power plants will be released as carbon dioxide which is less potent. The reduced usage of fossil-methane (natural gas) and bio-methane in the atmosphere will give double reduction in terms of GHG.”

According to these experts, nuclear energy could also be the way forward.

Nuclear energy typically emits small amounts of CO2 per unit of energy production according to a study by Our World in Data. The study also unveils that nuclear energy is also much better than fossil fuels in limiting levels of local air pollution.

While some countries are investing heavily in increasing nuclear energy supply, others are taking plants offline. The role that nuclear energy plays in the energy system is therefore very specific to the given country.

Some countries get no energy at all from nuclear — or are aiming to eliminate it completely — whilst others get the majority of their power from it.

Countries that produce relatively large amounts of nuclear power include France, USA, China, Russia and Canada.

“In the long term, taking into account energy density, human safety and well-being and environmental impact, and the fact that enormous experience has been gained and important improvements in regulatory frameworks implemented as a consequence of each nuclear mishap, there is currently no energy source that compares to nuclear energy,” says Theseira.

“Current technology in nuclear power generation features so-called ‘walk away’ safe reactors that operate at high temperatures but at atmospheric pressure, removing explosion risk and providing high thermal efficiency.”

Although oil and gas revenues are an important source of revenue for the country, Malaysia should still pursue a greater renewable energy ambition, notes Yin.

“The fact that (fossil) fuel happens to be an important source of foreign exchange for the country should not deter Malaysia from pursuing other forms of renewable energy. In fact, revenue from the exports of petroleum and natural gas (which are less carbon [intensive] than coal) should be invested in low carbon and renewable energy technologies and infrastructure to drive the nation toward a low-carbon economy.” concludes Theseira.

This story was written as part of the Lensa Iklim Mentorship Programme 2022 organised by Klima Action Malaysia (KAMY).