Malaysia: Keen to be Green

Those themes tie in neatly with the nation’s own ambitious sustainability goals, including achieving carbon neutrality by 2050.

Green investment plays a critical role in driving the transformation required to meet this target and the government intends for environmental stewardship to be a core pillar of the nation’s economic growth.

Under the New Industrial Master Plan (NIMP) 2030, Malaysia is decarbonizing its industries through the adoption of energy efficiency, renewable energies, enhanced waste management and cutting-edge technologies, backed up by strong regulatory frameworks that ensure businesses meet their sustainability responsibilities.

The Green Investment Strategy (GIS) is at the heart of the nation’s sustainability efforts, targeting seven key areas of investment potential: Energy efficiency, renewable energy, green hydrogen, bioenergy, green mobility, carbon capture, utilization and storage and the circular economy.

The Malaysian Investment Development Authority (MIDA) has been tasked with positioning the nation as one of the world’s most desirable sustainable investment destinations. The agency offers advice and support to companies looking to invest in Malaysia and offers guidance on the wide array of programs that are available to support green investments, including tax incentives – with more initiatives in the pipeline.

MIDA has quickly built both a reputation and a long list of success stories among companies both domestic and foreign. 

One of the very first companies in Malaysia to grasp both the importance and potential of the renewable energy sector, Gading Kencana Sdn. Bhd. leads the field in developing solar photovoltaic systems and mini-hydro generation for private and government customers, as well as operating its own solar farms.

Executive director Datin Hasnah Awang has overseen remarkable growth at the company in the last 23 years, with innovative technologies increasing efficiency and assisting the government’s green ambitions.

The development of an innovative mounting for solar panels has won industry acclaim, reducing the space required to instal panels and increasing the amount of energy that can be harvested per acre, while the introduction of robots has sharply increased the number that can be cleaned each day, reducing costs at the same time as maintaining the efficiency of panels.

Datin Hasnah knows such advances would not have been possible without the backing of a government fully committed to green technologies and processes.

“We have benefitted from financial assistance, such as help through the Green Technology Fund and other development grants, as well as tax reductions and exemptions that have helped to keep our costs low,” she added.

And that support has given the company the confidence to venture into new areas, even at a time of “fierce competition,” Datin Hasnah said. Gading Kencana is branching out into the electric vehicle charging business and is looking at generating energy from agricultural waste, with the win-win outcomes clear on both sides of the equation.

With the market for sustainable aviation fuels (SAF) taking off, EcoCeres Inc wanted to expand its business globally from the initial production base in China. As of 2023, the company supplies around 20% of the world’s sustainable fuels for the aviation sector.

“Our feasibility studies identified Malaysia as one of the best choices in South-East Asia to expand our business,” said Dannis KL Poon, Executive Vice President of Operation, as a result of the availability of feedstock resources, infrastructure, reliable energy supplies and, “Most importantly, a transparent investment environment and policies.”

Since its very first contacts with MIDA, Poon said EcoCeres has been impressed with the level of advice, support and investment provided to firms in the renewable energy sector, as well as the tax incentives that are available. The company registered its project company in Malaysia in May 2022, starting a journey that will culminate in the development of its second facility, the first SAF facility in Malaysia.

“These are some of the major driving factors that enabled EcoCeres to decide to invest in our second renewables energy facility in Malaysia,” he said. “And the recent launch of the Malaysia Aviation Decarbonization Blueprint shows the commitment here to reducing the aviation sector’s carbon emissions – reaffirming that we made the right choice.”

The company is currently conducting a feasibility study for the third renewable aviation fuel plant in the region, and Malaysia is one of the potential locations.

“Malaysia’s commitment to a green agenda and achieving net-zero emissions by 2050, supported by strong policies such as NIMP 2030 and the National Energy Transition Roadmap (NETR), plays an important role for investors,” Poon said.

“These are some of the major driving factors that enabled EcoCeres to decide to invest in our second renewables energy facility in Malaysia,” he said. “And the recent launch of the Malaysia Aviation Decarbonization Blueprint shows the commitment here to reducing the aviation sector’s carbon emissions – reaffirming that we made the right choice.”

The company is currently conducting a feasibility study for the third renewable aviation fuel plant in the region, and Malaysia is one of the potential locations.

“Malaysia’s commitment to a green agenda and achieving net-zero emissions by 2050, supported by strong policies such as NIMP 2030 and the National Energy Transition Roadmap (NETR), plays an important role for investors,” Poon said.

“And that is especially the case for technology-based and green investors such as EcoCeres. It really shows the commitment of the country to define clear policies and deliver support to locally based companies.”

For Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid, CEO of MIDA, the nation’s promise to decarbonize and the broader sustainability agenda is a natural element of the concept of “Madani,” which focuses on achieving good governance, sustainable development and racial harmony.

“As the world gains momentum towards a low-carbon future, businesses will increasingly need expertise to manage their carbon footprints,” Datuk Sikh Shamsul added. “Malaysia is growing its ecosystem of carbon-related services, such as project development, financing, carbon trading and low-carbon advisory services.”

MIDA is designed to connect investors with emerging opportunities, helping businesses at the same time as it facilitates Malaysia’s transition to a low-carbon economy.

Its efforts have already paid off handsomely, he pointed out, with MIDA approving no fewer than 436 green projects – valued at RM6.2 billion (US$1.43 billion) - in the first half of 2024 alone.   

“This is a clear indicator that green technology is becoming a cornerstone of our economy and MIDA is fully committed to facilitating and encouraging more investments in this sector,” Datuk Sikh Shamsul said.

The agency is undoubtedly assisted in its task by a forward-thinking business environment that has made Malaysia one of the easiest places in the world to do business, according to the World Bank. Political and economic stability, a capable and diligent workforce and clear legal structures have all helped to give global investors’ confidence in the nation as a place for their business to be.  

Malaysia’s Green Investment Strategy drives its parallel promises of economic progress at the same time as safeguarding the nation’s natural environment. Providing the financial backing to companies in the energy, mobility, manufacturing and countless other sectors feeds directly into this ambition for an ambitious, strategically located country with big green dreams.