Resource-rich Malaysia has unveiled interim measures to meet its net zero target with the launch of an energy transition roadmap, driven in part by the "diminishing" role of oil and gas in its development.
"Our ability to continuously rely on finite oil and gas resources is diminishing," economic minister Rafizi Ramli said on 27 July at the launch of the first phase of the national energy transition roadmap (NETR). "Frequent price shocks and structural decline in the fossil fuel industry has made it harder for us to treat oil and gas as Malaysia's be-all and end-all."
Malaysia is the world's fourth-largest LNG producer and second-biggest palm oil producer. Its state-owned oil firm Petronas produces around 1.8mn b/d of oil equivalent and operates about 400,000 b/d of refining capacity.
Phase one of the NETR has six key energy transition levers — energy efficiency, renewable energy, hydrogen, bioenergy, green mobility, and carbon capture, utilisation and storage. It also mentions 10 flagship catalyst projects that seek to open up investment opportunities of between 435bn ringgit ($96bn) and 1.85 trillion ringgit by 2050.
This includes the setting up of an integrated renewable energy zone with a 1GW hybrid solar photovoltaic power plant, in what Rafizi describes will be the "largest of its kind in southeast Asia".
Malaysia has set a target to be net zero by 2050. It aims to achieve 31pc or 12.9GW renewable energy capacity by 2025 and 40pc or 18GW by 2035, from an existing 23pc or 8.45GW of renewable energy in its installed power generation capacity, it said in its renewable energy roadmap in 2021.
"To double down on our commitment, we even stretched our RE [renewable energy] installed capacity targets by nearly two times, from 40pc to 70pc by 2050," Rafizi said.
Coal and natural gas made up around 93pc of Malaysia's power generation in the first quarter of this year, not much different from a year earlier, data from Malaysian state-owned utility TNB show.
The NETR also aims to make Sarawak the hydrogen hub of the country and put in place a framework for carbon capture and storage (CCS) so that catalyst projects can be implemented in these two years. These include state-owned Petronas' CCS projects at the Kasawari gas field — which the firm describes as one of the world's largest offshore CCS projects — and at the Lang Lebah gas field in partnership with Thailand's state-controlled PTTEP, both offshore Sarawak.
The roadmap reiterated a goal of having 10,000 electric vehicle charging stations installed along highways and commercial buildings by 2025. "The first- and last-mile of public transport will also be electrified so that we travel with cleaner energy," Rafizi said. Malaysia has set a 38pc market share for electric vehicles by 2040.
Committed investments for phase one of the NETR total 25bn ringgit. "In a few weeks' [time], the government shall complete the final piece of NETR in phase 2 with comprehensive action plans and initiatives to spur investments and economic activities," Rafizi said.
