Green Infrastructure Finance
Green Investment Climate Country Profile – Malaysia
East Asia and Pacific Region
Copyright Š2013 International Bank for Reconstruction and Development/The World Bank East Asia and Pacific Region/Water and Energy Management Unit (EASWE) 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org
All rights reserved This volume is a joint publication of the staff of the International Bank for Reconstruction and Development/ The World Bank and the Australian Agency for International Development (AusAID). The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of The World Bank, its Board of Executive Directors, the governments they represent, or AusAID. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Moreover, the statistical database and other country-related information is time sensitive and subject to updates and/or changes. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to the work is given. For permission to reproduce any part of this work for commercial purposes, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; Telephone: 978-750-8400; Fax: 978-750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Task Team Leader, Aldo Baietti: The World Bank, 1818 H Street NW, Washington, DC 20433, USA; e-mail: abaietti@worldbank.org.
Design: Miki FernĂĄndez, ULTRA Designs, Inc., miki@ultradesigns.com
Table of Contents Acknowledgements................................................................................................................................................ iii List of Abbreviations and Acronyms.......................................................................................................................iv 1. Statistical Overview........................................................................................................................................... 2 2. Energy................................................................................................................................................................ 4 3. Green Policies and Incentives............................................................................................................................ 6 4. Green Programs and Institutions.................................................................................................................... 11 5. Green Regulatory Framework........................................................................................................................ 13 6. Investment Trends and Challenges................................................................................................................. 15 7. Concluding Remarks........................................................................................................................................ 18 8. Summary of Policy Instruments...................................................................................................................... 20 9. Annex............................................................................................................................................................... 21 10. References........................................................................................................................................................ 42 List of Tables and Figures: Table 1: Electricity Generation by Source (% of total)...................................................................................... 4 Table 2: Promotion of Investment Act 1986....................................................................................................... 6 Table 3: Incentives for 8th Malaysian Plan........................................................................................................... 7 Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13:
Incentives for Biofuel Policy 2006......................................................................................................... 7 National RE Policy and Action Plan 2010 Targets................................................................................ 8 Expected Impact of National RE Policy and Action Plan by year 2020............................................... 8 Tax Incentives in 10th Malaysia Plan...................................................................................................... 9 FiTs in Malaysia, 2012............................................................................................................................ 9 National Energy Efficiency Master Plan 2020 Targets....................................................................... 10 Green Technology Financing............................................................................................................... 30 National Target for Green Jobs per GDP/GNI..................................................................................... 33 National Petroleum Subsidies, 2001-2012.......................................................................................... 39 Green Projects Application Status as of 2012.................................................................................... 39
Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6:
Total Primary Energy Supply................................................................................................................. 4 Electricity Consumption and Prices, 1990-2008.................................................................................... 5 Global Competitiveness Index............................................................................................................. 15 Malaysia Net FDI Flows, 2002-2011 (current US$).............................................................................. 16 Private Investment in New or Additional RE Capacity (US$ million)................................................ 16 Breakdown of RE Investments (US$ million)...................................................................................... 16
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Green Investment Climate Country Profile - Malaysia
Acknowledgements
T
his country profile has been prepared by the East Asia and Pacific Region of the World Bank. The work was led by Aldo Baietti, Lead Infrastructure Specialist (EASWE) under the overall guidance of John Roome, Sector Director (EASSD) and Charles Feinstein, Sector Manager (EASWE). The team and co-authors included Andrey Shlyakhtenko and Roberto La Rocca (EASWE) from the World Bank. The team wishes to acknowledge the peer reviewers and other contributors inside and outside the World Bank Group including, the Malaysia Economic Planning Unit team, the Malaysia Energy Commission team, Alexander Jett, Research Analyst (TWISI), John Probyn (PPIAF), Bastiaan Verink (TWISI), Banuchandar Nagarajan, Amar Causevic (EASWE), Yap Vui Soon (Local Consultant) and 10EQS, Ltd. Edward Charles Warwick edited the report. Finally, the team wishes to acknowledge the generous support from the Australian Agency for International Development (AusAID) provided through the World Bank East Asia and Pacific Infrastructure for Growth Trust Fund (EAAIG).
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Green Infrastructure Finance
List of Abbreviations and Acronyms AFFIRM
Awareness, Faculty, Finance, Infrastructure, Research and Marketing
bbl
Barrels of Oil
BioGen
Biomass Generation and Demonstration
BIPV
Building Integrated Photovoltaic
BPMB
Bank Pembangunan Malaysia Berhad
CDM
Clean Development Mechanism
CETREE
Centre for Education and Training in Renewable Energy and Energy Efficiency
CO2
Carbon Dioxide
CPI
Corruption Perceptions Index
DOEN
Department of Environment
EE
Energy Efficiency
EIA
Environmental Impact Assessment
FDI
Foreign Direct Investment
FiTs
Feed-in Tariffs
FTV
Fleet Program Test Vehicle
GBI
Green Building Initiative
GBIAP
Green Building Index Accreditation Panel
GDP
Gross Domestic Product
GHG
Greenhouse Gas
GNI
Gross National Income
GreenTech
Malaysia Green Technology Corporations
GTFS
Green Technology Financing Scheme
GW
Gigawatt
GWh
Gigawatt Hour
IGEM
International Green Tech and Eco Products Exhibition and Conference Malaysia
ITA
Investment Tax Allowance
KeTTHA
Ministry of Energy, Green Technology and Water
Kgoe
Kilogram(s) of Oil Equivalent
Ktoe
Thousand Tons of Oil Equivalent
kW
Kilowatt
kWh
Kilowatt Hour
kWp
Kilowatt Peak
LHDN
Inland Revenue Board of Malaysia
LPG
Liquefied Petroleum Gas
iv
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Green Investment Climate Country Profile - Malaysia
MBIPV
Malaysia Building Integrated Photovoltaic
MDTCA
Ministry of Domestic Trade and Consumer Affairs
MEEIP
Malaysian Energy Efficiency Improvement Program
MEISTA
Malaysian Electricity Supply Industry Trust Account
MIDA
Malaysian Industrial Development Authority
MITI
Ministry of International Trade and Industry
MOF
Ministry of Finance
MOHR
Ministry of Human Resources
MP
Malaysia Plan
MSW
Municipal Solid Waste
Mt
Metric Ton
MTHPI
National Green Technology and Climate Change Council
Mtoe
Million Tons of Oil Equivalent
MW
Megawatt
m/s
Meter per Second
NA
Not Available
NBP
National Biofuel Policy
NCCDM
National Council for Clean Development Mechanism
NCCP
National Climate Change Policy
NCS
National Competency Standard
NDP
National Depletion Policy
NEEMP
National Energy Efficiency Master Plan
NEP
National Energy Policy
NGTP
National Green Technology Policy
NPE
National Policy on Environment
NPP
National Petroleum Policy
NREPAP
National Renewable Energy Policy and Action Plan
OA
Occupational Analysis
ODS
Ozone-depleting Substances
PAM
Malaysian Institute of Architects
PDA
Petroleum Development Act
PETRONAS
Petroleum National Berhad
PPP
Public-Private Partnership
PTM
Malaysia Energy Centre
PV
Photovoltaic
RE
Renewable Energy
REBF
Renewable Energy Business Fund
REPPA
Renewable Energy Power Purchase Agreement
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RM
Malaysian Ringgit
R&D
Research and Development
SEDA
Sustainable Energy Development Authority of Malaysia
SIRIM
Standards and Industrial Research Institute of Malaysia
SREP
Small Renewable Energy Power Program
TNB
Tenaga Nasional Berhad
TWh
Terawatt Hours
US$
United States Dollar
VAT
Value-added Tax
WEF
World Economic Forum
3PU
Public-Private Partnership Unit
4FDP
Four-Fuel Diversification Policy
5FDS
Five-Fuel Diversification Strategy
5FP
Fifth Fuel Policy
Green Investment Climate Country Profile - Malaysia
Malaysia
has a total landmass of 329,847 km2. The country is separated by the South China Sea into two similarly sized regions namely Peninsular Malaysia and Malaysian Borneo. Although existing oil and natural gas fields make up the greater portion of the country’s energy supply, the substantial renewable energy (RE) potential provides a great opportunity for diversification of the energy mix, improving energy security and fostering sustainable development. Malaysia’s equatorial location endows it with great solar energy potential and its extensive tropical forests can supply large quantities of biomass. Endowed with abundant streams and rivers flowing from highland areas, Malaysia has numerous sites for hydro power development. Finally, there is a significant untapped wind energy potential.
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Green Infrastructure Finance
Indonesia
Philippines
Vietnam
China
Rep. of Korea
Singapore
Malaysia
1. Statistical Overview
847
225
124
7,318
1,116
240
278
242
95
88
1,344
50
5
29
49.9
48.7
30.4
49.2
82.9
100
72
5.1
4.5
6.4
9.6
3.4
5.8
4.5
24.7
50.9
48.8
16.5
34.7
108.3
51.8
5.4
4.7
18.7
5.4
4.0
5.2
3.2
Agriculture
15
12
21
10
3
0
11
Industry
47
33
41
47
39
28
44
Services
38
55
38
43
58
72
45
Energy production (Mtoe)8
352
24
77
2,085
44
0.03
90
Energy use (Mtoe)
202
39
64
2,257
229
19
67
Net energy exports/imports (Mtoe)9
147
(19)
11
(185)
NA
(51)
18
71
90
98
99
100
100
99
Electric transmission and distribution losses (%)
9.4
12.1
9.6
4.9
3.7
5.2
3.8
Energy intensity (kgoe/US$1,000 2005 PPP)
230
126
274
273
184
80
191
Macro Indicators GDP (current US$ billion)1 Population (million)
2
Urban population (% of total)
3
Economic Indicators Constant GDP 10 Year CAGR (%)4 Public debt (% of GDP)
5
Inflation, consumer prices (annual %)
6
Sector mix (% of GDP)7
Energy Indicators 8
Electricity access (% of population)
10 11
12
CO2 emissions (Mt of CO2)
376
71
114
6,832
515
45
208
Electricity tariffs (US$/kWh)14
0.07
0.14
0.05
NA
0.13
0.22
NA
6,095
348
165
126,215
139
NA
4.4
13,i
Fossil fuel endowment
15
Coal (2008, million short tons)
3.9
0.1
4.4
20.4
0
0
4
141.1
3.5
24.7
107
0.3
0
83
Coal and peat
15.1
15.2
19.7
67.2
28.3
0
15.8
Crude oil
Oil (2012, billion barrels) Natural gas (2012, trillion cubic feet) Total Primary Energy Supply (%)16
26.5
19.3
4.2
16.8
39.5
61.4
35.5
Oil products
6.7
14.3
21.2
0
0
0
0
Natural gas
17.4
8.3
11.1
3.3
13.8
38.4
43.4
0
0
0
0.8
16.8
0
0
Nuclear Hydro
0.5
2.2
4.0
2.4
0.1
0
0.9
Geothermal, solar, wind
7.9
22.9
0
0.5
0.1
0
0
i CO2 emissions from fuel combustion only.
2
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Indonesia
Philippines
Vietnam
China
Rep. of Korea
Singapore
Malaysia
Green Investment Climate Country Profile - Malaysia
26.0
17.9
39.3
9
1.3
0.2
4.5
0
0
0.5
0
0
0
0
Renewables
13.3
32.6
36
17.5
1
0.1
6.3
Oil
22.8
8.7
2.5
0.4
4.4
18.8
2.0
0
0
0
1.9
32.7
0
0
Natural Gas
22.1
32.1
43.4
1.4
15.6
81.0
60.7
Coal
41.8
26.6
18
78.8
46.2
0
30.9
S&P’s Credit Rating (Foreign Currency)18
BB+
BB+
BB-
AA-
A+
AAA
A-
Doing Business Ranking
129
136
98
91
8
1
18
CPI Transparency Ranking
100
129
112
75
43
5
60
FDI, net (% of GDP)21
1.6
0.3
6.8
2.2
(1.9)
8.5
1.6
37,113 45,114
8,328
78,438
NA
NA
46,401
Energy Indicators (cont.) Combustible renewable and waste Electricity and heat Electricity Sources (%)
17
Nuclear
Investment Climate 19 20
PPI (US$ million)22,ii PPI renewable energy (US$ million)
22
Lending interest rate (%)
23
Lending - deposit spread (%)24 Liquid assets to deposits and short term funding (%)
25
3,876
3,844
1,839
8,380
NA
NA
198
13.2
7.7
13.1
5.9
5.4
5.6
5
6
4
2
3
2
5
3
30
29
35
20
8
37
27
ii Investments amounts include greenfield projects, concessions and management, and lease contracts.
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Green Infrastructure Finance
2. Energy
O
ver the last half century, fossil fuels have been the main source of Malaysia’s energy mix, with oil and gas being the two main components. Oil’s contribution in the country’s energy mix peaked to 87.9 percent in the 1980s. After the international oil crisis, the Government called for the diversification of energy resources, over time reducing the share of oil to 35.5 percent in 2009. Malaysia’s crude oil reserves, including condensate, are estimated as 5.8 billion bbl as of 2011.26
Figure 1: Total Primary Energy Supply Combustible renewables and waste 4.5%
Natural gas 43.4% Renewables 5.4% Oil 35.5%
Coal & Peat 15.8%
Hydro 0.9%
Source: International Energy Agency, 2009.27
Following the discovery of natural gas reserves in 1983, its contribution in the energy mix has grown significantly, replacing oil as the main source. Natural gas has become the main energy contributor since the early 2000s and in 2009 accounted for 43.4 percent of the total primary energy supply. As of 2012, natural gas reserves are estimated to be 2.3 trillion m3. 26 Malaysia is a net exporter of oil and natural gas with 236,400 bbl/day and 31.9 billion m3, respectively.26 The Government recently started pursuing coal in an effort to further diversify the energy mix and to enhance energy security. Coal’s share in the energy mix began to rise in the early 2000s and by 2009 reached 15.8 percent (10,547 ktoe).29 While Malaysia’s coal reserves account for 1,483.06 Mt (as of 2005), most of the consumed coal is imported.30 Malaysia is also the world’s second largest producer and exporter of crude palm oil, which generates significant amount of residual biomass during the production process. Biomass has thus become a promising source of RE. Biomass and hydro currently comprise only about 5.4 percent of the energy supply of Malaysia.27 As of 2011, 94.5 percent of electricity was Table 1: Electricity Generation by Source still generated from fossil fuels.31 In 2001 the (% of total) Government initiated the Fifth Fuel Policy (5FP) 2002 2009 to enhance sustainability and security of the Renewables 7.1 6.3 energy supply. The objective of the policy was Oil 10.6 2.0 to develop other RE resources as the nation’s fifth fuel in addition to oil, natural gas, coal, Natural gas 70.3 60.7 and hydro. However, the achievements during Coal 12.0 30.9 the period of the 8th Malaysia Plan (MP) 2001Source: International Energy Agency, 2009.28 2005 were disappointing, because financial incentives still favored fossil fuels. Additional measures have been introduced to enhance support to the 5FP in the 10th MP.
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Green Investment Climate Country Profile - Malaysia
Despite a relatively low energy intensity in comparison to other East Asia and Pacific countries, Malaysia’s performance against the world averages in both energy intensity and CO2 emissions can still be improved. Additionally, the energy intensity has been worsening in the recent years, as energy consumption has surpassed GDP growth. This indicates a move towards more energy intensive economic activities and an increasing per-capita consumption of energy. Figure 2: Electricity Consumption and Prices, 1990-2008iii RM Million (at 2000 prices)
GWh
500,000
89,000
450,000
79,000
400,000
69,000
350,000
59,000
300,000
49,000
250,000
39,000
200,000
29,000
150,000
19,000 1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
GDP (RM million)
180,059
205,312
221,319
239,792
261,951
283,645
312,017
335,556
310,381
328,194
356,401
358,246
377,559
399,414
426,508
449,250
475,526
505,919
528,311
Electricity consumption (GWh)
19,932
22,373
25,778
28,474
34,076
39,225
43,897
50,952
53,195
55,961
61,168
65,015
68,827
73,371
77,206
80,705
84,575
89,294
92,815
Sources: Central Bank of Malaysia, 2009; and Ministry of Energy, Green Technology and Water, 2008.32
iii Malaysian ringgit (RM) exchange rate is approximately RM3.052 = US$1.
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3. Green Policies and Incentives
T
he current National Energy Policy (NEP) was formulated in 1979 to provide broad guidelines on long-term energy objectives and strategies to ensure efficient, secure and environmentally sustainable supplies of energy. The NEP identified three main objectives:
■■
Ensuring the provision of adequate, secure and cost-effective energy supply through developing indigenous non-renewable and RE resources and diversification of supply sources both from within and outside the country;
■■
Promoting efficient utilization of energy and discouraging wasteful and non-productive patterns of energy consumption; and
■■
Minimizing negative impact on the environment imposed by energy production, transportation, conversion, utilization and consumption.
The National Depletion Policy (NDP) and Four-Fuel Diversification Policy (4FDP) were formulated to support those objectives.33 The NDP 1980 was introduced to safeguard the exploitation of natural oil reserves because of the rapid increase in the domestic production of crude oil. As a result of this policy, the total production of crude oil is currently limited to about 650,000 bbl/day.34 The 4FDP 1981 was introduced to utilize non-oil domestic energy resources, improve the country’s energy independence and reduce foreign exchange costs. It aimed for an increase of gas, hydro and coal from the domestic resources. The 4FDP reduced the dependence on oil for electricity from 87.9 percent in 1980 to two percent in 2009.
Table 2: Promotion of Investment Act, 1986 ■■
Pioneer Status – revenue-based incentive to companies proposing to generate RE or undertake EE initiatives that grants a fiveyear exemption from income tax on up to 70% of the applicant-company’s statutory income
■■
Or ITA – capital-based incentive that allows a deduction of 60% of qualifying capital expenditure against a maximum of 70% of the company’s statutory income, for five years from the “date of approval”
In 1986 the Government introduced the Promotion of Investment Act, which provides a number of incentives for alternative energy supply including renewables. This Act provides two major incentives including granting “pioSource: Government of Malaysia, 1986.35 neer status” and tax allowances for capital investments in RE and energy efficiency (EE) initiatives.
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Green Investment Climate Country Profile - Malaysia
The 4FDP was revised again in 2000 with the announcement of the Five-Fuel Diversification Strategy (5FDS). As part of the 8th MP, the 5FP added RE as the fifth fuel and set a target of five percent in the country’s total electricity generation by 2005.
Table 3: Incentives for 8th Malaysian Plan ■■
Companies that undertake forest plantation projects or energy conservation measures or use energy from renewable biomass, mini-hydro or solar are eligible for Pioneer Status with a tax exemption of 100% of the statutory income for 10 years; and
In 2002, the Government adopted the National ■■ ITA of 100% on the qualifying capital Policy on Environment (NPE) to support the susexpenditure incurred within five years, which tainable development objectives of the 8th MP. can be offset against 100% of the statutory This policy integrates three elements of sustainincome for each year of assessment. Higher able development: (i) economic development; exemptions or allowances if the activities take (ii) social and cultural development; and (iii) place in “promoted areas”. environmental conservation. The policy focused Source: Prime Minister of Malaysia, 2005.36 on effective management of natural resources and the environment, prevention and control of pollution, and strengthening institutional capacity and awareness on environmental issues. The commitment to clean development was reinforced by the ratification of the Kyoto Protocol on September 4, 2002. As a developing country, Malaysia was not required to make concrete commitments towards reducing greenhouse gas (GHG) emissions. However, as a party to the Kyoto Protocol, Malaysia could voluntarily participate in the Clean Development Mechanism (CDM) and benefit from investments in the GHG emission reduction projects. For this purpose, the National CDM guidelines were approved by the National Council for Clean Development Mechanism (NCCDM) on August 15, 2003. Performance in RE development during the 8th MP 2001-2005 period was disappointing. While renewables were expected to grow to five percent (600 MW) in the country’s total electricity generation, Malaysia achieved an increase equal to less than one percent (12 MW) by the end of 2005.37 Despite various incentives offered by the Government, only two biomass plants were commissioned under the Small Renewable Energy Power Program (SREP).38 This could have been improved if the Government had obligated utilities to buy RE and as well as offered incentives for improving the financial viability of the projects. Despite the slow progress, the Government perseTable 4: Incentives for Biofuel Policy, 2006 vered with attempts to increase the utilization of Biodiesel is included in the list of products/ RE under the 9th MP 2006-2010. The 9th MP set a activities that are encouraged under the Promonew SREP target of 350 MW of RE electricity gention of Investments Act 1986. Biodiesel projects eration from biomass, biogas, municipal waste, are therefore eligible to be considered for: solar and mini-hydro. The plan promoted the use ■■ Pioneer Status of biomass resources from oil palm, wood, and rice husks residue for development of biomass ■■ ITA co-generation systems and electricity generation. Source: Center for International Forestry Research, 2011.39 The National Biofuel Policy (NBP) and the National Green Technology Policy (NGTP) were launched under the 9th MP to further support RE development.40
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The NBP 2006 aimed to reduce the country’s dependency on fossil fuels and to promote demand for palm oil. This policy promoted the use of biofuels by blending processed palm oil (five percent) with petroleum diesel (95 percent) and by giving incentives for the installation of biodiesel pumps at fueling stations. The NGTP 2009 aimed to provide an enabling environment for green technology development. This included the establishment of effective fiscal and financial mechanisms to support the growth of green industries. The policy also aimed to establish cohesion between different agencies by coordinating ministries, agencies, the private sector and key stakeholders to promote innovation in green energy technology. Recognizing the harmful effects of fossil fuels on the environment, in 2009 the Government also adopted the National Climate Change Policy (NCCP). NCCP aimed at: ■■ ■■ ■■
Streamlining and coordinating existing legislation and policies; Facilitating the implementation of adaptation and mitigation measures; and Identifying options and strategies to achieve a low-carbon economy.
In 2010, the Ministry of Table 5: National RE Policy and Action Plan 2010 Targets Energy, Green Technology Share Annual RE Annual and Water (KeTTHA) Year Cum. total of REiv generation CO2 avoidintroduced the National ending RE (MW) capacity (GWh) RE mix ance (ton) Renewable Energy Policy 2011 219 1% 1,230 1% 848,493 and Action Plan (NREPAP). 2015 985 6% 5,385 5% 3,715,415 The policy seeks to: (i) 2020 2,080 11% 11,246 9% 7,759,474 enhance the use of indig2030 4,000 17% 17,232 12% 11,889,887 enous RE sources to con2050 21,370 73% 44,208 24% 30,503,589 tribute to energy security; (ii) increase the share of RE Source: Sustainable Energy Authority Malaysia, 2009.41 in the energy mix; (iii) support the expansion of a local RE manufacturing sector; (iv) ensure reasonable RE generation costs; and (v) protect the environment. Table 6: Expected Impact of National RE Policy and Action Plan by year 2020 ■■
Minimum RM2.1 billion savings of external cost to mitigate CO2 emissions (total 42 Mtoe avoided from 2011 to 2020, on the basis of RM50 per ton of external cost)
■■
Minimum RM19 billion of loan values for RE projects, which will provide local banks with new sources of revenues (at 80% debt financing for RE projects)
■■
Minimum RM70 billion of RE business revenues generated from RE power plants operation, which can generate tax income of minimum RM1.75 billion to the Government
■■
50,000 jobs created to construct, operate and maintain RE power plants (on the basis of 15-30 job per MW)
Sources: Renewable and Sustainable Energy Reviews, 2011; and Sustainable Energy Authority Malaysia, 2009.42 iv Biomass is included in the RE definition.
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Green Investment Climate Country Profile - Malaysia
Despite these efforts, by the end of the 9th MP, the RE contribution towards the country’s total electricity generation increased to only 56.7 MW.44 Several factors contributed to the disappointing results, including: (i) policy inconsistencies; (ii) mixed signals to investors; (iii) lack of a robust and long-term orientation; (iv) non-competitive tariffs; and (v) lack of mandatory requirements for utilities to buy RE.
Table 7: Tax Incentives in 10th Malaysia Plan ■■
Tax breaks for buildings and designs that are environmentally sustainable
■■
Double tax deduction and tax benefits granted for green technology R&D
■■
Tax deferrals
■■
Tax holidays
■■
Reduction of levies (income or VAT) on capital investments in RE
Under the 10th MP 2011-2015, Malaysia is again ramping up work to increase the share of RE in Sources: Maybank, 2010; and PricewaterhouseCoopers, the country’s energy mix. This plan emphasizes 2012.43 the use of green technology through the NGTP as well as the new Renewable Energy Act. The new Renewable Energy Act regulates the establishment and implementation of a feed-in tariffs (FiTs) mechanism to catalyze RE investment. The FiTs mechanism is managed and administered by the Sustainable Energy Development Authority of Malaysia (SEDA). The new FiTs were launched through the Renewable Energy Act, in December 2011. As of September 2012, a total capacity of 238 MW had obtained FiTs approval and a total of 75.5 MW had been successfully installed and commissioned. The Government also intends to address market failures, end policy inconsistencies, and establish a competitive tariff scheme to reverse the previous disappointing results.45 The RE Policies will soon be complemented by the National Energy Efficiency
Table 8: FiTs in Malaysia, 2012 RE utilization Years RM/kWh Degressionv Biogas <4 MW 16 0.32 0.50% >4 MW < 10 MW 16 0.30 0.50% >10 MW < 30 MW 16 0.28 0.50% Bonus for gas engine > 40% efficiency 16 0.02 0.50% Bonus for local manufacturer 16 0.01 0.50% Bonus for landfill or sewage gas 16 0.08 0.50% Mini-hydro <10 MW 21 0.24 0.00% >10 MW < 30 MW 21 0.23 0.00% Solar PV <4 kW 21 1.23 8.00% >4 kW < 24 kW 21 1.20 8.00% >24 kW < 72 kW 21 1.18 8.00% >72 kW < 1000 kW 21 1.14 8.00% >1 MW < 10 MW 21 0.95 8.00% >10 MW < 30 MW 21 0.85 8.00% Bonus for rooftop 21 0.26 8.00% Bonus for BIPV 21 0.25 8.00% Bonus for local modules 21 0.03 8.00% Bonus for local inverters 21 0.01 8.00% Biomass <10 MW 16 0.31 0.50% >10 MW < 20 MW 16 0.29 0.50% >20 MW < 30 MW 16 0.27 0.50% Bonus for gasification 16 0.02 0.50% Bonus for steam generation > 14% efficiency 16 0.01 0.50% Bonus for local manufacturer 16 0.01 0.50% Bonus for MSW 16 0.10 1.80% Source: Sustainable Energy Authority Malaysia, 2012.46
v Degression is a mechanism according to which the price (or tariff) ratchets down over time. The World Bank – AusAID
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Master Plan (NEEMP), through which the Government is planning to implement well-managed EE programs.vi The plan has an overall target to reduce the electricity consumption by 10 percent by 2020.47 Table 9: National Energy Efficiency Master Plan 2020 Targets
In 2008, the Government began reforms to wind down energy sub■■ Reduce electricity consumption by 10% sidies by shifting to cash rebates, windfall taxes and expansion of ■■ Total reduction over plan period is about 70 million tCO2e the social safety net. Subsidies ■■ 85 TWh accumulated savings on electricity and petroleum had ■■ 3 GW plant capacity savings grown to approximately four per cent of GDP or US$14 billion Sources: Asia-Pacific Economic Cooperation, 2011; and Sustainable Energy during the period of rising oil 48 Authority Malaysia, 2010. prices in the late 2000s. Further cuts to gasoline, diesel and liquefied petroleum gas (LPG) subsidies were made in July 2010.49 The Private Finance Initiatives Program is an important component of the 9th MP for achieving the green energy targets of the country. The public-private partnership (PPP) model has been applied to a wide range of public projects, including power generation. For the rolling plan of 2011-2012, in addition to conventionally procured development projects which were allocated RM99 billion, 52 projects worth RM63 billion were conceived. Apart from budgetary consideration, PPPs are viewed as an avenue for private sector innovation and efficiency. They are also a way to promote shared responsibility and accountability in the provision of public services as well as achieve optimal utilization of the nation’s resources. The foreign direct investment (FDI) is a key driver underlying the strong growth of the Malaysian economy. Policy reforms, including the introduction of the Investment Incentives Act 1968, the establishment of free trade zones in the early 1970s, the provision of export incentives and the acceleration of an open policy in the 1980s led to a surge of FDI in the late 1980s. The Government introduced more liberal incentives, including allowing a larger percentage of foreign equity ownership. This allowed FDI to grow at an annual average rate of 38.7 percent between 1986 and 1996. The FDI has recently turned negative because of competition from China and other countries in Southeast Asia. Despite this trend, given the well-educated workforce with strong foreign-language skills and good infrastructure (including the transport system), Malaysia remains an attractive investment destination in Southeast Asia. Malaysia’s natural endowments, together with its strong human resource skills, provide an opportunity for the Government to shift the FDI focus to more strategic sectors, such as RE.
vi The EE programs will be finalized by the end of 2013.
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4. Green Programs and Institutions The Malaysia Building Integrated Photovoltaic (MBIPV) program was launched in 2005 as a part of the 9th MP with an objective to increase installed Building Integrated Photovoltaic (BIPV) capacity by 330 percent as well as reduce unit costs by 20 percent by 2010. By December 2009, cumulative grid-connected BIPV capacity increased from 468 kW to 1,416 kW or 203 percent and the unit cost of photovoltaics (PV) declined 40 percent. However, this reduction was more due to a general decrease in PV costs globally. Since the implementation of BIPV program, a total of 1,070 tons of CO2 equivalent GHG emissions have been avoided.50 The Centre for Education and Training in Renewable Energy and Energy Efficiency (CETREE) was launched in 2000 to increase the awareness on developing RE and share knowledge â&#x20AC;&#x201C; the critical elements to promote large-scale implementation of RE. The CETREE introduced the concepts of RE and EE into the curricular activities of schools and universities. In August 2006, three competitions emphasizing RE and EE were organized under the collaboration of CETREE and the Ministry of Education. The competitions featured solar cars, solar cookers, and EE beach houses. As of 2011, 8,260 students and 1,714 teachers and lecturers visited CETREE, along with a general public of 14,109.51 A number of funds and financing schemes were also established in order to support the existing incentives. Under the FiTs system, a Renewable Energy Fund was initiated to harmonize the prices between renewable and non-renewable energy. Consumers that use more electricity than the set minimum point, would have to contribute one percent of their bill towards the RE fund. The collected funds are then used to equalize the price between non-renewable and renewable sources of energy administered by the SEDA.52 Another important initiative in financing RE projects in Malaysia is the Renewable Energy Business Fund (REBF). The objective of the REBF is mainly for a Biomass Generation and Demonstration (BioGen) implementation program to support the financial needs of the Full Scale Model Biomass Power Project. Malaysia Energy Centre (PTM) and Bank Pembangunan Malaysia Berhad (BPMB), formerly Bank Industri & Teknologi Malaysia Berhad, contributed RM28.0 million for the fund. The PTM portion includes a contribution of RM9.2 million from the Global Environment Facility (GEF) and RM5 million from the Malaysian Electricity Supply Industry Trust Account (MESITA).53 The Green Technology Financing Scheme (GTFS) aims to improve the supply and utilization of green technology. The GTFS is a special financing scheme introduced by the Government to support the development of green technology in Malaysia. It was proposed in the 2010 budget with a total financing amount of RM1.5 billion. The GTFS is a soft loan supported by the Government. Under the GTFS, the Government will bear two percent of the total interest rate, and provide a guarantee on 60 percent of the financing amount via the Credit Guarantee Corporation Malaysia Berhad (with the remaining 40 percent financing risk to be borne by participating financial institutions). The scheme is expected to benefit more than 140 companies.54 As of December 2010, 10 green projects worth RM141,902,500 million have been approved for financing. A large pool of funds available under the GTFS scheme will provide the impetus for rapid growth of green technology in the next few years.
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The Renewable Energy and Energy Efficiency Scheme was introduced in two phases in 2006 and 2007. A wide range of financing facilities for RE and EE projects — especially on biomass, biodiesel, mini-hydro, solar, municipal solid waste (MSW) and EE — was introduced. RE and EE Scheme I allows businesses to borrow up to 80 percent of total project costs at attractive interest rates, repayable up to 15 years. Anticipating increased interest in RE projects, the RE and EE Scheme II increased the allocation by RM1 billion. Companies were allowed to borrow up to 85 percent of total project costs with an attractive interest rate, repayable up to 15 years. The Malaysian Energy Efficiency Improvement Program (MEEIP) was established under KeTTHA to assist the industry manage energy more efficiently and choose best practices in equipment and electrical facility maintenance for factories and premises. The Green Technology Action Plan, developed by the Government, seeks to advance the Green Technology Policy. The action plan is divided into two phases. A baseline survey that aims to identify gaps was conducted in the first phase. Started in 2012, the second phase aims to develop a detailed action plan to achieve the goals of the NGTP. The following provides an overview of the organizations that play a crucial role in the formulation and implementation of Malaysia’s Energy Policy: ■■
The Economic Planning Unit, under the Prime Minister’s Department, is responsible for the formulation and evaluation of energy sector policies and strategies and for the preparation of programs and projects to be implemented under the MP.
■■
The main objective of the KeTTHA, formerly known as the Ministry of Energy, Water and Communications, is to facilitate and regulate the growth of industries in sectors (energy, green technology and water) and to ensure the availability of high quality, efficient and safe services at a reasonable price to consumers throughout the country.
■■
The Energy Commission, formerly known as Directorate General of Electricity and Gas was set up in May 2001 as a regulatory body for both gas and electricity supply. It is charged with promoting EE as a part of its responsibility for viable development of the electricity supply industry. The Commission is responsible for issuing directives for EE labeling and has the authority to issue directives to set Minimum Energy Performance Standards for the energy-using equipment.
■■
The National Green Technology and Climate Change Council (MTHPI) conducts the implementation and coordination of policies amongst various stakeholders and beneficiaries. The Commission is chaired by the Prime Minister and its main function is to streamline and coordinate the efforts to drive green technology development amongst the various ministries.
■■
The Malaysia Green Technology Corporation (GreenTech Malaysia) will act as a national energy research center that will coordinate research on energy planning and technological development and demonstration. GreenTech Malaysia aims to be a central hub for establishing the connection between business and research institutions and universities.
■■
The Malaysian Institute of Architects (PAM) endorsed the formation of the new Sustainability Committee that will develop the Green Building Index and set up an accompanying panel for certification and accreditation of green-rated buildings.
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5. Green Regulatory Framework
T
he Malaysian energy sector is regulated through the following laws: (i) the Electricity Supply Act (1990, amended 2011); (ii) the Energy Commission Act 2001; (iii) the Efficient Management of Electrical Energy Regulation 2008; and (iv) the Renewable Energy Act 2010.
The Electricity Supply Act 1990 provides for the establishment of the Department of Electricity Supply. This Act governs the supply of electricity at reasonable prices and the licensing of electrical installations and equipment. The Energy Commission Act 2001 was established to provide the Energy Commission with functions and powers to regulate the energy supply activities in Malaysia. These functions and powers include enforcing the energy supply laws, regulating all matters relating to the electricity supply, promoting the use of RE and conservation of non-renewable energy sources. Under the Efficient Management of Electrical Energy Regulation 2008 any installation with a total electricity consumption of 3 million kWh or more over six consecutive months is required to implement measures to reduce consumption by efficient management. The installation is also required to engage an electrical energy manager who shall: ■■
Audit and analyze the total electrical energy consumption or generation;
■■
Advise on developing and implementing measures to the ensure efficient management of the electrical energy installation;
■■
Monitor effective implementation of the measures;
■■
Supervise the record-keeping on efficient management of electrical energy installation and verify its accuracy; and
■■
Ensure the timely submission of information and reports under the regulations.
The Renewable Energy Act was adopted in 2010 to provide a special tariff system in order to catalyze the generation of RE. The FiTs scheme encourages adoption of RE by bridging the gap between the cost of fossil fuel and renewable sources. The Act envisages that RE capacity in the country will increase from 61.2 MW in 2010 to at least 985 MW by 2015 and 2,080 MW by 2020.55 The objectives of the Act are to: ■■
Increase RE contribution in the national power generation mix;
■■
Facilitate the growth of the RE industry;
■■
Ensure reasonable RE generation costs;
■■
Conserve the environment for future generation; and
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■■
Enhance awareness on the role and importance of RE.
In addition, the MOE should finalize the NEEMP by the end of 2013, with the aim of providing a mechanism for successful implementation of EE measures. The NEEMP is expected to consist of six main thrusts: ■■
Thrust 1: Establish an overall long-term national plan for EE;
■■
Thrust 2: Create legal and regulatory framework for EE;
■■
Thrust 3: Create champion for EE;
■■
Thrust 4: Create adequate and sustained funding mechanism for EE;
■■
Thrust 5: Implement EE programs; and
■■
Thrust 6: Enable commercial finance institutions to support EE.
With regards to the country’s PPP program, Malaysia adopts a centralized approach to implementation. A dedicated unit under the Prime Minister’s Department is entrusted with the responsibility of spearheading the development and execution of PPP projects. While projects may originate from line ministries, state and local authorities or the private sector, the Public-Private Partnership Unit (3PU) is responsible for screening, evaluating, as well as negotiating and structuring the contractual obligations of the projects. Line ministries are responsible for management of PPP contracts. This involves the monitoring of asset development, construction, enforcement of contractual and payment obligations as well as public and community relations. The evaluation of PPP projects is supervised by the PPP Committee, chaired by the Director General of 3PU. Permanent members of the Committee are drawn from the Ministry of Finance (MOF), Attorney General Chambers, Economic Planning Unit, Federal Land Commissioner, and the Valuation and Property Services Department. Representatives of relevant line ministries also participate on the Committee for projects that fall under their jurisdiction. The PPP Guideline issued by the Government provides greater clarity on the types of projects suitable for PPPs, procedures to follow when making proposals, qualifying criteria for bidders of the projects, operating models, payment mechanisms as well as process flow for project approvals. Private participation in infrastructure is further encouraged through a pragmatic approach towards risk allocation. Accordingly, there is no standard or common risk-allocation matrix-framework across all PPP projects or one that is rigid through time. Instead, the prevailing risk and nature of projects are taken into account. For new sectors developed using the PPP approach, the Government does not assume asset construction risks. Instead, the Government assumes the entire or substantial portion of the demand risk by being the off-taker.
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6. Investment Trends and Challenges
F
DI has been an important source of economic growth for Malaysia, bringing in capital investment, technology, and management knowhow.vii The Government has been trying to encourage FDI by streamlining its regulatory framework, and reducing restrictions on foreign investment. Emphasis has been recently given to the services sector, which has been identified as a leading engine of growth.
Figure 3: Global Competitiveness Index Stage of development Transition 1-2
1 Factor driven
2 Efficiency driven
Transition 2-3
3 Innovation driven
Institutions 7 Innovation Business sophistication
6 5 4
Infrastructure Macroeconomic environments
3
Malaysia’s laws governing FDI do not provide 2 Health and general principles and rules for foreign partic1 primary Market size education ipation in local businesses.viii FDI in Malaysia is mainly regulated under the Promotion Higher education Technological of Investment Act 1986, and the Industrial and training readiness Coordination Act 1975.ix The Malaysian Goods market Financial market Industrial Development Authority (MIDA), efficiency development Low market efficiency under Ministry of International Trade and Industry (MITI), is in charge of promoting forMalaysia Efficiency-driven economies eign and local investment, and for evaluating Source: World Economic Forum, 2012.56 applications for tax incentives. As a “one-stop center”, MIDA coordinates with relevant authorities on investment facilitation measures. The 2012-13 Global Competitiveness Report of the World Economic Forum (WEF) ranks Malaysia at 25 among the 144 countries in the world.56 Malaysia retained a high ranking among the Association of Southeast Asian Nations countries, second only to Singapore. Moreover, the country’s stage of development was also upgraded from “efficiency-driven” to “transition towards innovation-driven”.57 Malaysia owes this success to its notable advantages in efficient and competitive markets for goods and services (11th globally), its remarkably supportive financial sector (6th globally), and its business-friendly institutional framework. WEF noted innovation and labor market efficiency as the country’s strengths, where it tops the Global Competitiveness Index rankings. It is also well known for a sophisticated business sector. vii Based on data from 1970 to 2005, a one percentage increase in FDI could lead to real GDP growth increasing by 0.046 percent, and real GNI growth increasing by 0.045 percent. viii Arguably, this had allowed the Government maximum policy and regulatory space to screen and control FDI to suit the economic and industrial needs of the particular time. ix The Promotion of Investment Act was amended in March 2007 to incorporate incentives approved from 2001 to 2007 annual Budgets. The Industrial Coordination Act is currently being amended.
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The PPP program in Malaysia is an important component of the Malaysia Incorporated Concept â&#x20AC;&#x201D; a development approach introduced in 1983. PPP in Malaysia is defined broadly as an arrangement where private sector provides services and invests in infrastructure assets that are traditionally undertaken by the Government.
2.56
2 1.30 1.10
0.99 0.05
US$ billion
0 -2
-2.74
-4
-4.35 -3.99
-6 -6.63
-8 -10
-7.83 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: World Bank, 2012.21
Figure 5: Private Investment in New or Additional RE Capacity (US$ million) 60 50 40 30 20 10
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1
0
20 1
9
20 1
8
20 0
7
20 0
6
20 0
5
Source: World Bank, 2011.58
Figure 6: Breakdown of RE Investments (US$ million) 28.4, 24% n Hydro, Large (>50MW) n Solar, PV n Waste 67.3 56%
Source: World Bank, 2011.58
16
20 0
4
20 0
3
20 0
2
20 0
1
20 0
0
0 20 0
As part of the policy favoring private enterprise and competition, Malaysia aims to shift away from reliance on public investment and towards private participation. In this regard, PPPs provide a great opportunity for the Malaysian Government to initiate this shift through various government programs.
4
20 0
FDI could be an opportunity for Malaysia to expand further on the green energy sector. Building collaborations with multi-national firms will encourage technology and knowledge transfer to local firms in green energy. The Government plans to relax rules governing foreign ownership further in 2012-2016, which will help accelerate inflows. Greater liberalization will be needed, however, in order to attract the large amounts of FDI required to transform Malaysia into green economy.
Figure 4: Malaysia Net FDI Flows, 2002-2011 (current US$)
US$ million
Despite being characterized for its favorable investment environment and openness, Malaysia has experienced negative net FDI flows in recent years. This can be attributed partly to the competition pressures from China and because incentives in Malaysia are being matched by other countries in Southeast Asia. The Government strongly encourages FDI, although it still maintains restrictions or limits on investment in some sectors.
24 20%
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To date, the PPP model has been used on a wide range of public projects including RE projects. The volume of PPP projects is, however, far from its potential. The breakdown of the investments illustrates that the largest amount of investment is in biomass waste followed by small-scale hydroelectric and solar PV facilities. The RE market for Malaysia is showing promising results. However, the development could be constrained by financial, technical, regulatory, institutional and informational barriers, which will need to be addressed. Presently, many green energy projects are implemented with the assistance of grants. This is because new technologies are more expensive and bear additional risk and uncertainty. As such, RE projects generally face difficulties in obtaining financing. The financial community is also not sufficiently knowledgeable of these technologies, creating an additional barrier. Additionally, there is limited local expertise on efficient practices and equipment handling and, specifically in the case of biomass, there is uncertainty in securing long-term biomass supply at stable prices. In order to accelerate investments in RE, subsidies for conventional fuel sources should also be gradually decreased or, at the very least, rebalanced to promote clean-technologies. Further, the efficiency of institutional network on RE could be improved by encouraging joint efforts between governmental agencies and private institutions in exploring viable energy generation options. Such collaborations can also enhance capacity building of key players, such as Governmentâ&#x20AC;&#x2122;s decision-makers, industries and utilities. Finally, lack of information and awareness often create additional impediments. There is a need for governmental agencies to advise the private sector on how to apply for RE incentives as well as to provide more channels for information dissemination.
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7. Concluding Remarks
M
alaysia possesses considerable potential for greening its economy without impeding economic growth or productivity. The country has abundant clean and RE resources, particularly in hydro-power. It is a vibrant, multi-faceted economy, an attractive investment destination, and a great location to conduct business. For more than a decade the Government has expressed its full commitment to develop clean energy resources through a series of national plans. This commitment was reiterated by the Prime Minister of Malaysia, Najib Razak, at the United Nations Climate Change Conference 2009, when he articulated Malaysia’s proposal to reduce its CO2 emissions by 40 percent until 2020. Moreover, Malaysia has expressed a keen desire in becoming an active developer of green technologies. Yet, while gains have been made in the production and use of natural gas, overall progress of cleaner energy development has been disappointing. The share of RE production in TPES has slipped over the years to only five percent. Progress against its own plans has also been disappointing. For example, only 15 percent of the 9th MP RE targets have been achieved. Malaysia’s hydro-electricity potential has been barely realized, and progress in the other technologies including wind, biomass or solar has been slow. Several factors, including fossil fuel subsidies, have contributed to the slowdown in the growth of RE. While fuel subsidies have contributed to Malaysia’s rapid economic prosperity over the last two decades, they have also disadvantaged clean technology development. As such, Malaysia is confronting a fundamental dilemma as a way forward in favoring the continued use of conventional fossil fuels, against fostering the development and use of cleaner technologies. The Government could consider the following in order to accelerate RE investment. First, only 6.4 TWh (12 percent) of the 50.3 TWh of Malaysia’s hydro potential has been realized.59 While in some cases hydropower can compete with polluting technologies, in most cases it is more costly and capital intensive, thus disfavoring its development. A revisit of the risk/responsibility allocation, especially during the construction phase, could unlock more private sector interest. Moreover, FiT levels for hydropower could also be reviewed to ensure that distortions from fossil fuel subsidies are neutralized and that hydro can compete on an equal footing. Further, the Government could review its FiTs levels, which are well below the comparable rates in the region.
Secondly, technical and financial support for clean technologies must be adequate in order to foster greater development and competence. Although, the Government has taken several measures in the 10th MP, the requisite skills and expertise in these areas will inevitably take time to develop fully. While, the Malaysian economy provides significant opportunities for RE technology development, the current knowledge gap and lack of sufficient experience is hindering the ability of the sector to reach the necessary scale internationally. Part of the problem is that business models for these technologies have not yet been adequately developed for the internal markets, which are essential for creating a bridge to the export markets. The greening of the domestic economy will also open up new employment opportunities in non-traditional sectors. However, the business case
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for the internal market requires the review of the incentives structure and possibly greater commitment for domestic RE investment. Finally, Malaysia can also look for opportunities on the demand side. Malaysia’s industrial base can be more energy efficient. The relatively high urbanization rate provides good prospects for reducing energy intensity in the residential and commercial sectors. Recent EE programs have attempted to tap these opportunities, but there is still ample room for improvement. Malaysia’s energy demand has been growing rapidly, particularly in energy-intensive sectors and transport, and growth in these sectors has outstripped GDP growth.60 Greater productivity in energy use can improve the economy’s competitive advantage in the region. The Government additionally could consider a package of financial incentives, as well as mandatory energy consumption reduction targets for high energy users. Concessional finance and other financial incentives for the purchase of low-energy consuming equipment should also be considered.
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8. Summary of Policy Instruments Below is a summary table of renewable energy, energy efficiency and market-based instruments for seven selected East Asia and Pacific countries. China
Korea, Rep. of
Indonesia
Philippines
Tax Incentives
●
●
●
Carbon Tax
●
Capital Subsidy/Grants - RE
●
●
Policy Distortions
●
Feed-in Tariff
●
●
Domestic
●
●
Foreign
●
●
●
●
Renewable Energy
Concessional Financing
Partial Risk Guarantee Renewable Portfolio Standard
Energy Efficiency & Green Tech
Market Based
Malaysia
●
●
●
●
●
●
●
●
●
●
●
●
●
●
● ●
●
●
● ●
●
●
●
●
●
●
●
●
Capital subsidy/Grants - EE
●
●
●
●
●
●
Domestic
●
●
●
●
●
●
Foreign
●
●
●
●
●
●
Concessional Financing
Partial Risk Guarantee
●
Green Labeling
●
Awareness Campaigns
●
●
●
●
CDM
●
●
●
Carbon market
●
●
●
Cap-and-trade scheme
●
●
● Full implementation ● Limited scale and/or early stage implementation ● Existing barriers
20
Vietnam
Tax Incentives
Singapore
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●
Green Investment Climate Country Profile - Malaysia
9. Annex Table of Contents 9.1 Policies, Objectives, and Targets...................................................................................................... 22 9.2 Financial and Economic Instruments............................................................................................... 28 9.3 Programs and Institutions................................................................................................................ 31 9.4 Regulatory Environment.................................................................................................................. 36 9.5 Supplementary Materials................................................................................................................. 39
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9.1 Policies, Objectives and Targets Overarching Policies • Petroleum Development Act • National Petroleum Policy (NPP) • National Energy Policy (NEP) • National Depletion Policy (NDP) • Promotion of Investment Act • Fifth Fuel Policy (5FP) • National Policy on the Environment (NPE) • National Clean Development Mechanism (CDM) • National Biofuel Policy (NBP) • National Green Technology Policy (NGTP) • National Climate Change Policy (NCCP) • 10th Malaysia Plan (MP)
Petroleum Development Act was adopted in 1974. Through the Petroleum Development Act, the Government vested all the petroleum resources of Malaysia to a wholly-owned governmental company called Petroleum National Berhad (PETRONAS). The Petroleum Development Act comes under the purview of the Prime Minister and is responsible for its planning, investment and regulation of all up-stream activities. Downstream activities are regulated by the MITI as well as the Ministry of Domestic Trade and Consumer Affairs (MDTCA). The MITI issues licenses for the processing and refining of petroleum and the manufacture of petrochemical products, while the MDTCA issues licenses for marketing and distributing petroleum products.
National Petroleum Policy (NPP) was formulated in 1975 and aims to regulate the oil and gas industry. The policy’s main goals are: ■■
Subsidizing fuel supplies to make them available at a reasonable price to support national economic objectives, making tapping oil and gas a priority;
■■
Promoting greater Malaysian representation and providing a favorable investment climate, including creating opportunities for downstream industries; and
■■
Creating an optimal social and economic pace of exploration of the country’s endowment of exhaustible oil and gas resources, taking into account the need to conserve these depleting assets and protect the environment.
National Energy Policy (NEP) was adopted in 1979. The main purpose of the Policy is to ensure the availability of the energy supply and that the supplies are reasonably priced to support the
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nation’s economy development. Under this policy, the KeTTHA has identified three principal energy objectives that would be instrumental in guiding the development of its energy sector. Those are: ■■
To ensure the provision of adequate, secure and cost-effective energy supplies through developing indigenous energy resources (both non-renewable and RE), using the least cost options and pursuing a diversification strategy;
■■
To promote the efficient utilization of energy and discourage wasteful and non-productive patterns of energy consumption; and
■■
To minimize the negative impacts of energy production, transportation, conversion, utilization and consumption on the environment.
National Depletion Policy (NDP) was introduced in 1980 to safeguard the exploitation of natural oils reserves because of the rapid increase in the production of crude oil. As a result, the total production of crude oil is currently limited to about 650,000 bbl/day. As such, at the current production rate, proven oil reserves are expected to last another 16 years.
Promotion of Investment Act was introduced in 1986. A company incorporated in Malaysia and engaging in the manufacturing of a “promoted product” or undertaking a “promoted activity” is eligible for either the Pioneer Status or an investment tax allowance (ITA) under the Promotion of Investment Act.61 The general Pioneer Status incentive confers a five-year exemption from income tax on 70 percent of the applicant-company’s statutory income. The ITA incentive allows a deduction of 60 percent of qualifying capital expenditure against a maximum of 70 percent of the company’s statutory income, for five years from the “date of approval”. Pioneer Status is a revenue-based incentive, which is suitable for a company expecting to earn taxable income in the first five years of the manufacturing operation. On the other hand, the ITA is capital expenditure-based, which is suitable for a company expecting to incur large capital expenditure in the first five years and only becoming profitable towards the end of, or after, the five-year period. Income exempted from tax by virtue of Pioneer Status or ITA is credited to an exempt dividend account. First tier shareholders that are Malaysian companies can, in turn, pay tax-free dividends from such dividend income. Companies located in the Eastern Corridor of Peninsular Malaysia and the East Malaysian States of Sabah and Sarawak can claim increased tax exemptions under Pioneer Status or ITA. Likewise, tax exemption of up to 100 percent of statutory income may be granted to manufacturers in specified sectors, including high technology, research and development (R&D), the Multimedia Super Corridor and projects of national strategic importance. The Pioneer Status and ITA incentives are extendable beyond five years, subject to a number of conditions.
Fifth Fuel Policy (5FP) was introduced in 2001. Under the 5FP, introduced by the Government in 2001, RE was identified as the nation’s fifth fuel in addition to coal, gas, hydropower and oil. Under this policy, the Small Renewable Energy Power Program (SREP) was introduced to facilitate smallsized RE power producers.
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National Policy on the Environment (NPE) was adopted in 2002. NPE was designed to ensure economic, social and cultural progress through environmentally sustainable development. Its main strategies focused on: (i) the effective management of natural resources; (ii) the prevention and control of pollution; (iii) the strengthening of the country’s institutional capacity, education and awareness; and (iv) the formulation of action and implementation plans.
National Clean Development Mechanism (CDM) guidelines were approved by the NCCDM in 2003. According to the guidelines, CDM projects must comply with the sustainable development policies of the Government and the project must fulfill all of the following conditions underlined by the CDM Executive Board: (i) implementation of CDM projects must involve participation between Malaysia and an Annex 1 party or parties; (ii) participation must be voluntary; (iii) the benefits related to mitigation of climate change must be real, measurable and long-term; (iv) reductions in emissions must be additional to any that would occur in the absence of the certified project activity; (v) the project must provide technology transfer benefits and/or improvement in technology; and (vi) the project must bring direct benefits towards achieving sustainable development. National Biofuel Policy (NBP) was launched in 2006 to support the 5FP and it is aimed to reduce the country’s dependency on depleting fossil fuels, and promoting the demand for palm oil as a source of RE. Five key thrusts includes: (i) transport; (ii) industry; (iii) technologies; (iv) export; and (v) cleaner environment.62 The NBP 2006 highlights are: ■■
Producing a biodiesel fuel blend of five percent processed palm oil and 95 percent petroleum diesel;
■■
Encouraging the use of biofuel by giving incentives for providing biodiesel pumps at fueling stations;
■■
Establishing industry standard for biodiesel quality under Standards and Industrial Research Institute of Malaysia (SIRIM); and
■■
Setting up of a palm oil biodiesel plant.63
National Green Technology Policy (NGTP) was adopted in 2009. The policy: (i) recognizes that green technology could be the new economic driver for growth, as it offers enormous opportunities and immense potential for economic regeneration, innovation and wealth creation; (ii) is built on the four core pillars of energy, the environment, the economy and the society; (iii) aims to reduce the rate of energy use, yet increases economic growth and facilitate the growth of the green technology industry and increases its contribution to the national economy; (iv) enhances Malaysia’s global competitiveness in the green technology development race; (v) ensures sustainable development and conserves the environment; and (vi) improves public education and awareness on green technology and encourage its widespread use. Also, the Policy covers the following four main areas: ■■
Energy — the NGTP Policy will encourage the deployment of green technologies in power generation and in energy supply-side and demand-side management.
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■■
Buildings — the NGTP Policy will encourage the adoption of green technologies in the construction, management, maintenance and demolition of buildings.
■■
Water and Waste Management — the NGTP Policy will encourage the utilization of green technologies in the management and use of water resources, wastewater treatment, solid waste and sanitary landfill.
■■
Transport — the NGTP Policy will encourage the adoption of green technologies in transportation infrastructure and vehicles, with a special focus on biofuels and public road transport.
National Climate Change Policy (NCCP) was adopted in 2009. The NCCP aims to: (i) streamline and coordinate existing legislation and policies; (ii) establish an inter-ministerial and cross-sectoral committee to drive and facilitate implementation of adaptation and mitigation measures; and (iii) identify options and strategies to achieve a low-carbon economy. 10th Malaysia Plan (MP), 2011-2015 includes initiatives to finance and promote sustainability measures, such as: (i) introducing a FiTs to help finance the cost of generating power from RE sources; (ii) promoting projects eligible for carbon credits; and (iii) promoting funding for green technology investments. Under the 10th MP, the Government has introduced the Awareness, Faculty, Finance, Infrastructure, Research and Marketing (AFFIRM) framework to create a comprehensive ecosystem for environmental sustainability: ■■
Awareness — the Government will raise awareness that environmental sustainability is a shared responsibility involving co-operative efforts with the private sector and civil society.
■■
Faculty — the Government will introduce a system of grading and certifying competent personnel in the green technology sector.
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Financial Incentives — the Government is providing effective financial incentives for businesses to explore green technologies and adopt green practices with a fund of RM1.5 billion. The 2011 budget also included incentives, such as tax deductions for contributions towards environmental funds and tax breaks for environmentally-sustainable buildings and designs.
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Infrastructure — the Government will initiate green townships in Putrajaya and Cyberjaya with guidelines and rating scales based on their carbon footprint. The introduction of these guidelines will be implemented in other green townships across the country.
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Research — the Government will enhance research, development and commercialization efforts of green technologies through local research centers and industries, and will encourage partnerships with foreign institutions, such as universities or multi-national companies.
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Marketing — the Government is developing an eco-labeling scheme so that local products can be internationally recognized as green and successfully exported.x This labeling program will also be critical in securing buy-in from the public in supporting the green economy.
The two main areas of environmental focus under the 10th MP are: (i) developing a road map for climate-resilient growth; and (ii) enhancing conservation of the nation’s ecological assets. x More information on eco-labeling scheme is available in the Environmental Law.
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Renewable Energy Policies • National Renewable Energy Policy and Action Plan (NREPAP) • Renewable Energy Act 2011 (Act 725)
National Renewable Energy Policy and Action Plan (NREPAP) was adopted in 2010. This plan is a result of a study to overcome the main obstacles hindering the growth of RE in the country. The NREPAP included the introduction of the Renewable Energy Act in 2011.
Renewable Energy Act 2011 (Act 725) provides a mandatory requirement for the utilities to accept and buy RE power. The Renewable Energy Act together with the country’s FiTs system were enforced in 2011. Malaysia plans to have at least five percent of its energy resources from RE by 2015. Within this context, Malaysia endeavors to become one of the global hubs for solar energy. There are already three global manufacturers of solar PV systems in Malaysia to serve the global market. Malaysia’s aspiration is to increase its market share for PV manufacturing to 17 percent of world production by year 2020, second only to China. On biomass, Malaysia expects to increase power generation from incineration and methane production. Five bio-oil plants will be constructed over the next five years and the first in Lahad Datu, Sabah will be built at a cost of approximately RM124 million. Hydropower will continue to feature prominently in the country’s energy plans and five dams with a total capacity of 5 GW have been identified for future development.
Energy Efficiency Policies • National Energy Efficiency Master Plan (NEEMP)
National Energy Efficiency Master Plan (NEEMP) is a policy through which the Government has put in place a well-managed strategy and programs for EE development. The strategies under the plan will be focused on the industrial, commercial and residential sectors. The NEEMP is expected to consist of six main thrusts: ■■
Thrust 1: Establish an overall long-term national plan for EE;
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Thrust 2: Create legal and regulatory framework for EE;
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Thrust 3: Create champion for EE;
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Thrust 4: Create adequate and sustained funding mechanism for EE;
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Thrust 5: Implement EE programs; and
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Thrust 6: Enable commercial finance institutions to support EE.
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Environmental Laws Information Availability • Eco-labeling Scheme
Eco-labeling Scheme is one of the most important governmental initiatives supporting sustainable development in Malaysia. Under the marketing framework of AFFIRM in the 10th MP, the KeTTHA, together with the SIRIM, will develop a national eco-labeling scheme and standards for products and services that matches international standards. This will in turn support the Government’s green procurement initiative as well as assist local manufacturers to export their products. Increased labeling of environmentally friendly goods and services, such as Energy Efficiency Star Rating, Low Carbon Footprint products and the use of the Green Building Index will increase Malaysia’s competitiveness.
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9.2 Financial and Economic Instruments Fiscal Incentives and Direct Subsidies • Pioneer Status • Investment Tax Allowance (ITA) • Tax Exemptions from Payment of Import Duty and/or Sales Tax • Tax and Stamp Duty Exemption • 10th Malaysia Plan (MP) Tax Incentives and Subsidies • National Petroleum Policy (NPP) Subsidies
Pioneer Status granted under the Promotion of Investment Act 1986 to companies proposing to generate RE or undertake EE initiatives, the general Pioneer Status incentive confers a five-year exemption from income tax on 70 percent of the applicant-company’s statutory income.
Investment Tax Allowance (ITA) is granted under the Promotion of Investment Act 1986 to companies proposing to generate RE or undertake EE initiatives. The ITA incentive allows a deduction of 60 percent of qualifying capital expenditure against a maximum of 70 percent of the company’s statutory income, for five years from the “date of approval”.
Tax Exemptions from Payment of Import Duty and/or Sales Tax refers to equipment purchased from local manufacturers; which in that case is provided a sales tax exemption. Import duty and sales tax exemptions are available on EE equipment, such as high efficiency motors and insulation materials.
Tax and Stamp Duty Exemption is provided for Green Building Initiative (GBI) certified property.64 10th Malaysia Plan (MP) Tax Incentives are included in the Government new budget. Hence, the Government under 10th MP provides a number of tax incentives to home owners as well as for green technologies research.xi The following range of tax deductions is available: (i) tax breaks for buildings and designs that are environmentally sustainable; (ii) double tax deduction and tax benefits for green technology R&D; (iii) tax deferrals; (iv) tax holidays; and (v) reduction of levies (income or VAT) where buyers purchasing buildings with Green Building Index certificates from developers are given stamp duty exemption on instruments of transfer of ownership. The exemption amount is equivalent to the additional cost incurred in obtaining the GBI certificates. This exemption is given to buyers who execute sales and purchase agreements from October 24, 2009 until December 31, 2014.
xi Such governmental incentives have encouraged some local companies to invest in the development of green technology. An example is Megafirst Corporation who has developed a project to produce green construction material locally and have planned to invest up to RM150 million in the project.
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National Petroleum Policy (NPP) is a mechanism that provides the Government with indirect subsidization of petroleum and petroleum-based products since its inception in 1975.65 The mechanism was then strengthen in 1982. The Government derived revenue from the sale of petroleum products when the market price remained below the fixed retail price. However, subsequently the world market prices of petroleum rose, which in turn has increased the importance of the NPP. Malaysia has been subsidizing liquefied natural gas since January 1990, diesel since October 1999 and petrol since June 2005. In the 2012 budget, the Government allocated RM17 billion for subsidies on petrol, diesel and LPG compared with RM15 billion in 2011. These subsidies deliver a 30-35 percent discount of the market price for petrol and diesel and a 40-45 percent for LPG. PETRONAS contributes significant revenue to the Government through annual income taxes. The income tax revenue from PETRONAS has been reinvested partly as direct subsidies for petroleum and partly for the development of RE technologies. This includes the GTFS as well as previous government-initiated RE technology initiatives. Policies introduced after the NPP illustrate the Government’s effort in adopting alternative and RE technologies.
Financial Measures • Feed-in Tariffs (FiTs) Program • Renewable Energy Business Fund (REBF) • Green Technology Financing Scheme (GTFS) • Renewable Energy and Energy Efficiency Scheme
Feed-in Tariffs (FiTs) Program aims to achieve 2,000 MW of RE by 2020 and 4,000 MW by 2030. Under the Renewable Energy Power Purchase Agreement (REPPA), the ceiling price agreed upon by the Tenaga Nasional Berhad (TNB) for all RE grid-connected projects ranged from RM0.14 to RM0.17/kWh. However, the tariff is not high enough to attract investors or project developers. Consequently, in September 2006 the Government increased the tariff for biomass and biogas projects to RM0.19/kWh and in August 2007 it was subsequently adjusted to RM0.21/kWh. However, the tariff for other RE resources, such as hydro power and solar power remains at RM0.17/kWh.
Renewable Energy Business Fund (REBF) is expected to give better opportunities to project developers and financial institutions towards developing and financing RE in the country. The total size of the fund is RM28.0 million, which is equally contributed by PTM and BPMB. The PTM’s share of the fund is comprised from GEF (RM9.2 million) and MESITA (RM5 million) contributions.
Green Technology Financing Scheme (GTFS) with US$500 million has been launched to provide soft loans to companies that supply and utilize green technologies. The Government bears two percent of the total interest rate and provides a guarantee of 60 percent of the total financing, while banking institutions guarantee the remaining 40 percent.
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Table 10: Green Technology Financing Features Financing Size
Producers of Green Technology Maximum RM50 million
User of Green Technology Maximum RM10 million
Financing Tenure Eligibility Criteria
Up to 15 years Legally registered Malaysian-owned Company (at least 51%) in all economic sectors
Up to 10 years Legally registered Malaysian-owned Company (at least 70%) in all economic sectors
Source: Green Technology, 2012.66
Renewable Energy and Energy Efficiency Scheme provides a wide range of financing facilities for RE and EE projects, especially for biomass, biodiesel, mini-hydro, solar, MSW and EE. The RE and EE Scheme I and II were introduced in 2006 and 2007, respectively. The RE and EE Scheme I allowed a business to borrow up to 80 percent of the total project costs (repayable up to 15 years) at an attractive interest rate. The second phase increases the allocation by RM1 billion, with companies allowed to borrow up to 85 percent.
Market-based Mechanisms â&#x20AC;˘ Central Forest Spine
Central Forest Spine (encompasses 4.32 million hectares across Malaysia) will be implemented under the 10th MP in the bid to offset carbon and protect biodiversity and habitats.
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9.3 Programs and Institutions Programs67 • Green Building Index (GBI) • Adaptation Strategies • Greenhouse Gas (GHG) Emissions Reduction • Small Renewable Energy Power Program (SREP) • Malaysian Energy Efficiency Improvement Program (MEEIP) • Biomass Power Generation and Demonstration (BioGen) Project • Malaysia Building Integrated Photovoltaic (MBIPV) Technology Application • Green Technology Action Plan • Electric Vehicle Infrastructure Roadmap • Green Jobs • International Green Tech and Eco Products Exhibition and Conference Malaysia (IGEM) • BioXcell Ecosystem Industrial Park • Waste Exchange Program • Green Township
Green Building Index (GBI) includes six main criteria for the evaluation of residential and commercial buildings. The criteria encompasses: (i) EE; (ii) indoor environmental quality; (iii) sustainable site management and planning; (iv) materials and resources; (v) water efficiency; and (vi) innovation. The Government is currently drafting a similar standard for green buildings, including an index for public sector buildings. There are already more than 40 pilot sites currently under construction, including the Prime Minister’s office complex in Putrajaya.
Adaptation Strategies support the creation of stronger incentives for investments in RE, which include the introduction of a one percent contribution from electricity consumers, except those consuming less than 300 kWh/month. The RE Fund is utilized to: (i) bear the cost of FiTs; (ii) promote EE; (iii) improve solid waste management; (iv) conserve forests; and (v) reduce emissions to improve air quality.
Greenhouse Gas (GHG) Emissions Reduction is another important sustainable development initiative. The Government pledged a voluntary reduction of up to 40 percent in emissions intensity of GDP by 2020 compared to 2005 levels, conditional on receiving the transfer of technology and adequate and effective levels of financing.
Small Renewable Energy Power Program (SREP) is designed to fast-track RE power generation development in Malaysia. The SREP program permits power generated from renewable resources
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to be sold through Malaysia’s grid system. The SREP developers can sell power to utilities through the REPPA. The REPPA allows RE power sales for up to 21 years. However, RE power purchase agreements for a RE installations are limited to a net export capacity of up to 10 MW.
Malaysian Energy Efficiency Improvement Program (MEEIP) is coordinated by the KeTTHA, while the Malaysian Energy Centre is the implementing agency providing the industry with guidelines to manage their electricity more efficiently. The project was extended from 2006 to 2007 to implement additional activities, including an energy audit on three additional energy-intensive sectors, namely: plastics, oleochemicals and petroleum. The EE and conservation guidelines that were jointly developed with the Energy Commission and Malaysian Energy Centre were completed in 2006 and launched in 2007. The guidelines are intended to make energy management more efficient and implement best practices in equipment and electrical facility maintenance. Under the energy audit program, the MEEIP hopes to conduct an analysis on the audit carried out by energy service companies in the textile and plastics sectors to further increase the efficiency of energy usage in the industry sector.
Biomass Power Generation and Demonstration (BioGen) Project was introduced in 2002 to promote and demonstrate biomass and biogas grid-connected power generation projects and reduce GHG emissions by utilizing excess oil palm biomass residues. The project is designed to: (i) facilitate development of the grid connected biomass-fueled small power systems; (ii) disseminate awareness information in palm oil industry; (iii) provide building and technical assistance in policy formulation; and (iv) provide financial facility assistance through favorable bank loans and tax exemptions. A significant BioGen project is the first 14 MW power plant in Tawau, Sabah which used oil palm residues (empty fruit bunch, fiber and shell) to successfully mitigate 40,000-50,000 tons of CO2 in 2004.
Malaysia Building Integrated Photovoltaic (MBIPV) Technology Application was a five-year project launched in July 2005. The primary objective was to lower GHG emission from the country’s electricity sector by reducing the long-term cost of BIPV technology in the Malaysian market and to create a sustainable BIPV market. The energy generated by the project is expected to avoid 65,100 tons of CO2 emissions from the country’s power sector. The MBIPV program Suria 1000 obtained a great success. The Suria 1000 program instruments provided direct opportunities to the public and industry to be involved in RE initiatives and environmental protection. As of December 2009, the cumulative grid connected PV capacity in Malaysia totaled 1,416 kWp, an increase of 203 percent compared to 468 kWp connected in 2005. With the implementation of the BIPV, 1,070 tons of CO2 equivalent have been avoided.
Green Technology Action Plan is divided into two phases. The first phase is the baseline survey (June 2010-June 2011) while the second phase, which started early in 2012, will develop a detailed action plan. The baseline study focuses on six identified sectors, namely: (i) energy; (ii) buildings; (iii) transportation; (iv) water and waste management; (v) manufacturing; and (vi) information communication technology. The study aimed to identify the status application of green technology in Malaysia with an emphasis on gap analysis and how to fill these gaps. The second phase aims to design the Low Carbon Economy Action Plan to achieve the goals of the NGTP. 32
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Electric Vehicle Infrastructure Roadmap is a fundamental document to enable electric vehicle pilot demonstration projects to be carried out. As a part of this initiative, KeTTHA was responsible in preparing the Infrastructure Development Long-term Plan for Electric Vehicles. The KeTTHA appointed GreenTech Malaysia to facilitate the preparation of the Electric Vehicle Infrastructure Roadmap. GreenTech Malaysia, together with TNB Research, has defined seven key areas for the overall development of electric vehicles: (i) institutional framework; (ii) resources; (iii) technology; (iv) industry performance matrices; (v) value chain; (vi) market & industry development; and (vii) demonstration/pilot project. Based on these seven key areas, the KeTTHA, GreenTech Malaysia and the Malaysian Automotive Institute convened the First Electric Vehicle Roundtable Discussion in December 2010. The program sought feedback and input from stakeholders consisting of representatives from the Government and agencies and representatives of related industries as well manufacturers of electric vehicles. This input was used to prepare the initial strategic plan for the Electric Vehicle Infrastructure Roadmap. The second phase of the Electric Vehicle Infrastructure Roadmap is the implementation of an electric vehicle pilot project. The KeTTHA, in collaboration with the MITI, has been working with Proton to run the Fleet Program Test Vehicle (FTV) in Putrajaya and Cyberjaya in 2011. Implementation of the FTV will help to ensure that the electric vehicle infrastructure roadmap is comprehensive and available country-wide. This program is a step towards the wider promotion and introduction of electric vehicles. The third phase of the electric vehicle infrastructure roadmap will involve the preparation of the overall electric vehicles roadmap which will include all seven key areas listed in the preparation of the framework roadmap. Output and outcomes from the third phase will determine the implementation for the development of the electric vehicle roadmap at the national level.
Green Jobs is an initiative established by
Table 11: National Target for Green Jobs per GDP/GNI
the KeTTHA which has been working with Parameter Year 2020 Year 2025 the Department of Skill Development and No. of Green Jobs 304,968 495,364 the Ministry of Human Resources (MOHR) National GDP (RM million) 67,332 125,406.9 to develop the occupational analysis (OA) National GNI (RM million) 65,992.7 122,908.5 and the National Competency Standard Sources: Green Technology, 2012; and Ministry of Energy, Green (NCS) on green technology. The OA and Technology and Water, 2012.68 NCS documents were approved by MOHR in 2010. The OA is a systematic process to collect information on important tasks from specified work. The NCS was developed to list the generic competencies of green jobs.
International Green Tech and Eco Products Exhibition and Conference Malaysia (IGEM) is an annual event which has been organized by the KeTTHA since 2010. It is important for the Governmentâ&#x20AC;&#x2122;s initiatives in green growth, as it brings together key players from the green industry, including buyers, sellers and investors from around the world to explore trade and collaboration opportunities.
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BioXcell Ecosystem Industrial Park is a premier biotechnology research park and ecosystem facility. The park will be operated by the BioCorp/UEM. COX Architecture and FAA Arkiteks prepared a master plan for the proposed BioXcell Ecosystem Industrial Park in Nusa Jaya. The master plan proposes a manufacturing and workplace environment which combines the best of contemporary business park attributes with the functional and operational needs of a well-planned industrial park.
Waste Exchange Program is led by Cypark Resources Bhd, an environmental technology and engineering firm, which plans to invest RM500 million to convert 16 landfills into RE parks following the official opening of the country’s first RE park in Negeri Sembilan. The RE park in Pajam is capable of generating 10 MW of electricity with the integration of three potential resources available at the landfills including solar, landfill gas (biogas) and waste (biocell). Green Township is a program for the development of green cities in Malaysia. The KeTTHA and GreenTech Malaysia have agreed for Putrajaya and Cyberjaya to become the two pilots for the Green Township project. A Green Township Coordinating Committee was established to coordinate the development of the Putrajaya and Cyberjaya townships.
Institutions • Ministry of Energy, Green Technology and Water (KeTTHA) • Malaysia Green Technology Corporations (GreenTech Malaysia) • Centre for Education and Training in Renewable Energy and Energy Efficiency (CETREE) • Tenaga Nasional Berhad Research • Malaysian Institute of Architects (PAM)
Ministry of Energy, Green Technology and Water (KeTTHA) was established in 2009. One of the primary objectives of the new ministry was to promote high impact R&D for green technologies in Malaysia. The KeTTHA is currently working with the MOF to develop a mechanism for green procurement to be implemented by governmental agencies. The KeTTHA is also developing standards, certifications and labeling mechanisms, including green procurement manuals and procedures in association with the SIRIM. These will enable government departments and private sector to undertake green procurement. Malaysia Green Technology Corporations (GreenTech Malaysia) was formerly known as the PTM. The rationale behind PTM’s establishment was to fulfill the need for a national energy research center that will co-ordinate energy planning, research, development and demonstration in the energy sector. This co-ordination is necessary due to the long lead time required for energy projects to come on stream. GreenTech Malaysia aims to become a one-stop focal point for linkages with universities, research institutions, industries and other various national and international organizations on energy issues.
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Centre for Education and Training in Renewable Energy and Energy Efficiency (CETREE) was established by the Government to promote RE and EE for professionals, tertiary institutions and schools in Malaysia. The establishment of CETREE is in line with the strategic thrusts of the KeTTHA. To date, the CETREE has been making progress with the creation of RE-powered van and bus technology.
Tenaga Nasional Berhad Research (TNBR) acts as the in-house solution provider for TNB (a stateowned electricity utility company). The institution provides a centralized, one-stop center for technical solutions and innovation. TNB Research has been working closely with various governmental agencies on a number of advanced research projects and is positioning its parent company and the Government to be early adopters of promising technologies.
Malaysian Institute of Architects (PAM) is the national professional institute representing architects in Malaysia. In August 2008, the PAM Council endorsed the formation of the new Sustainability Committee to set-up the GBI and the accompanying panel for certification and accreditation of green-rated buildings. The GBI was later adopted by the construction industry and the Government.
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9.4 Regulatory Environment Procedures and Mechanisms • Environmental Quality Act • Standard Specifications
Environmental Quality Act was adopted in 1974. The Environmental Quality Act and its accompanying regulations call for Environmental Impact Assessment (EIA), project siting evaluation, pollution control, monitoring, and self-enforcement. Industrial activities are required to obtain the following approvals from the Director General of Department of Environment (DOEN) prior to project implementation. ■■
EIA for Prescribed Activities — potential investors should examine whether an EIA is required for their industrial proposal according to the Prescribed Activity list under the Environmental Quality Order 2000.
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Site suitability evaluation for Non-Prescribed Activities — all potential sites for the establishment of a new industrial activity are evaluated based on the compatibility of the project to the structure or local plans, surrounding land use, provision of set-backs or buffer zones, the capacity of the area to receive additional pollution load and waste disposal requirements.
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Written permission is required for any activity that will result in a new source of effluent or discharge as stipulated under Regulation 4, Environmental Quality (Sewage and Industrial Effluents) Regulations 1979.
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Written approval is required for any new installation (including incinerators), resisting or alteration of fuel burning equipment, chimney or near dwelling area into which air impurities may be discharged as detailed in Regulations 4, 36 and 38 of the Environmental Quality (Clean Air) Regulations 1978.
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Applicants are required to obtain a license to occupy the premise after these requirements have been fulfilled.
Ozone-depleting substances (ODS) are controlled by the introduction of the Environmental Quality (Refrigerant Management) Regulations 1999 and the Environmental Quality (Halon Management) Regulations 1999. ODS are categorized as environmental hazardous with the enactment of these regulations. In 2006, Malaysia developed a comprehensive set of legal provisions related to the management of toxic and hazardous wastes. These regulations were based on the cradle to grave principle. The Environmental Quality (Scheduled Wastes) Regulations came into force in August 2005 to replace the previous enacted regulations of 1989.
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Standard Specifications do not exist at a national level in Malaysia. Natural green product and service policies have not yet been established and therefore binding green standards cannot be imposed on all industries. The current standards are mostly developed by independent bodies; they are voluntary and have a market-based approach. These standards are being adopted by innovative industry leaders who are aware of the need to incorporate such practices in their organization in order to continue to be competitive in their respective industries.
Regulatory Agencies • National Green Technology and Climate Change Council (MTHPI) • Department of Environment (DOEN) • Energy Commission of Malaysia • Sustainable Energy Development Authority of Malaysia (SEDA) • Green Building Index Accreditation Panel (GBIAP) • Malaysian Industrial Development Authority (MIDA)
National Green Technology and Climate Change Council (MTHPI) chaired by the Prime Minister, held its first meeting in January 2010. The main function of this council is to streamline and coordinate the efforts to promote green technology amongst the various ministries. Under the Council, eight working committees have been established, namely: (i) Human Capital; (ii) Industrial; (iii) Research and Innovation; (iv) Promotion and Public Awareness; (v) Transportation; (vi) Green Neighborhood; (vii) Green Growth; and (viii) Climate Adaptation.
Department of Environment (DOEN) is the regulating agency that administers the Environmental Quality Act. An Environmental Quality Council was established in April 1977 with representatives from various industries, non-governmental organizations and government departments and other agencies in order to advise the Minister on the implementation of the Environmental Quality Act.
Energy Commission of Malaysia is a statutory body responsible for regulating the energy sector, particularly the electricity supply and piped gas supply industries in Peninsular Malaysia and Sabah. The Energy Commission ensures that the supply of electricity and piped gas to consumers is secure, reliable, safe and reasonably priced.
Sustainable Energy Development Authority of Malaysia (SEDA) is a statutory body formed under the Sustainable Energy Development Authority Act 2011 (Act 726). The key role of SEDA is to administer and manage the implementation of the FiTs mechanism which is mandated under the Renewable Energy Act 2011 (Act 725). In September 2011, the SEDA was made operational to oversee all aspects relating to sustainable energy and to facilitate the development of the RE industry. By 2020, the policy is expected to have the following impact: ■■
A minimum of RM2.1 billion savings to mitigate CO2 emissions (total 42 million tons avoided from 2011 to 2020, on the basis of RM50 per tons of external cost);
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A minimum of RM19 billion for loans to RE projects, which will provide local banks with new sources of revenues (80 percent debt financing for RE projects);
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A minimum of RM70 billion of RE business revenues generated from RE power plants operation, which in turn can generate a minimum tax income for the Government of RM1.75 billion; and
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Close to 50,000 jobs created to construct, operate and maintain RE power plants (on the basis of 15-30 job per MW).
Green Building Index Accreditation Panel (GBIAP) is an independent non-governmental committee consisting of professionals from the PAM and the Association of Consulting Engineers Malaysian, which oversees the implementation of GBI.
Malaysian Industrial Development Authority (MIDA) oversees the application of incentives for RE, EE and green buildings in coordination with other relevant agencies. Any tax-related incentives are regulated by the Inland Revenue Board of Malaysia (LHDN). Documents for such incentives must be kept for possible future audits by the LHDN.
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9.5 Supplementary Materials Petroleum Subsidies in Malaysia Table 12: National Petroleum Subsidies, 2001-2012 Year 2001
Subsidy (RM billion) 2.40
Tax Exemption (RM billion) 5.08
Total (RM billion) 7.48
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
0.92 1.82 4.79 7.85 7.59 7.41 2.72 17.91 9.61 10.26 NA
3.31 4.76 7.15 8.16 7.28 8.77 15.38 5.59 NA 5.64 NA
4.23 6.58 11.94 16.01 14.67 16.18 18.10 23.50 NA 15.9 17.0
Source: Authors, 2012.xii
Project Application Status under Green Technology Financing Scheme Table 13: Green Projects Application Status as of 2012 Year Project Certification (Technical) Completed project applications under evaluation Certified green projects Rejected applications Financing Applications Approved green project for financing Approved green technology value for financing Balance of green technology value for financing
No. of Projects 12 68 14 10 RM141.9 million RM1.358 billion
Source: Authors, 2012.xiii
xii Authors compilation based upon the data acquired from the Malaysian GTFS Program data. xiii Authors compilation based upon the data acquired from “Malaysia’s Strategic Green Initiatives Report”.
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Initiatives of Local Companies ■■
Close cooperation is underway between Modenas and Proton in the development of electric motorbikes and vehicles. Modenas has already unveiled its electric motorbike at the IGEM 2010, while Proton is now working on a prototype.
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DIGI has developed a “Deep Green” program as part of its Corporate Social Responsibility strategy where old equipment is swapped for newer, and more energy efficient ones. In addition, DIGI has implemented a “Mangrove-saving Project” designed to preserve mangrove forests in Kuala Selangor.
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Sime Darby has implemented a “Plant a Tree Program”.
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Canon Malaysia has promoted its “Canon Goes Green Campaign”.
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Shell Malaysia has offered grants up to RM300,000 for sponsorship of sustainability projects for forest and marine conservation programs. The company is also involved in environment awareness, conservation and preservation.
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YTL Group of Companies is actively involved in environment awareness, conservation and preservation.
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Panasonic Malaysia has promoted inverter technology in a positive contribution to the green culture.
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HP Malaysia has conducted a similar program through its green products, services and operations strategy.
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Malaysia Airlines is adopting green management strategies for its fleet of commercial aircraft and has introduced a carbon-offsetting scheme in response to local and international carbon emissions reduction performance targets.
Sustainable Energy Development Authority of Malaysia’s Functions SEDA has all the functions conferred to it under the Renewable Energy Act 2011 and other sustainable energy laws as well as the following functions: ■■
To advise the Minister and relevant governmental entities on all matters relating to sustainable energy, including recommendations on policies, laws and actions to be applied to promote sustainable energy.
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To promote and implement the national policy objectives for RE.
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To promote, stimulate, facilitate and develop sustainable energy.
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To implement, manage, monitor and review the FiTs system including carrying out investigations, collect, record and maintain data and statistics concerning the FiTs system, and to provide such data information and statistics to the Minister as may be required.
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To implement sustainable energy laws and to recommend reform to such laws to the Government.
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To promote private sector investment in the sustainable energy sector including a recommendation to the relevant government entities, incentives in relation to taxes, customs and excise duties and other fiscal incentives applicable to such investment.
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To carry out or arrange for the conduct of research, assessment, studies and advisory services, collate, analyze and publish information, statistics and factors influencing or relevant to the development of sustainable energy and to disseminate such relevant information, statistics and factors to government entities, the public and investors or potential investors investing in sustainable energy.
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To conduct, promote and support research and innovation activities relating to sustainable energy.
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To conduct, promote and support training or other programs relating to the development of human resources and capacity building in the sustainable energy sector.
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To implement measures to promote public participation and to improve public awareness on sustainable energy.
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To act as a focal point on matters relating to sustainable energy and on climate change.
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10. References 1
World Bank Data Bank. “GDP (current US$).” Accessed July 21, 2013. http://data.worldbank.org/indicator/ NY.GDP.MKTP.CD.
2
World Bank Data Bank. “Population, total.” Accessed July 21, 2013. http://data.worldbank.org/indicator/ SP.POP.TOTL.
3
World Bank Data Bank. “Urban population (% of total).” Accessed July 21, 2013. http://data.worldbank.org/ indicator/SP.URB.TOTL.IN.ZS.
4
International Monetary Fund. “World Economic Outlook Database 2011.” Accessed July 21, 2013. https:// www.imf.org/external/pubs/ft/weo/2011/01/weodata/weoselco.aspx?g=2001&sg=All+countries.
5
Economist Intelligence Unit. “EIU Country Data.” Accessed July 21, 2013. http://www.eiu.com/site_info. asp?info_name=EIUcountryData&=entr.
6
World Bank Data Bank. “Inflation, consumer prices (annual %).” Accessed July 21, 2013. http://data. worldbank.org/indicator/FP.CPI.TOTL.ZG.
7
Central Intelligence Agency. “GDP Composition by Sector.” Accessed July 21, 2013. https://www.cia.gov/ library/publications/the-world-factbook/fields/2012.html#rp.
8
International Energy Agency. “Statistics and Balances 2009.” Accessed July 21, 2013. https://www.iea.org/ stats/.
9
Adapted from:
International Energy Agency. “Statistics and Balances 2009.” Accessed July 21, 2013. https://www.iea.org/ stats/. U.S. Energy Information Administration. “Countries Data.” Accessed July 21, 2013. http://www.eia.gov/ countries/data.cfm. World Bank. “Winds of Change: East Asia’s Sustainable Energy Future.” Accessed July 23, 2013. http:// siteresources.worldbank.org/INTEASTASIAPACIFIC/Resources/226262-1271320774648/windsofchange_ fullreport.pdf. World Bank Data Bank. “Energy imports, net (% of energy use).” Accessed July 23, 2013. http://data. worldbank.org/indicator/EG.IMP.CONS.ZS. 10
Adapted from:
Indriyanto, Asclepias R., Nasrullah Salim, Fabby Tumiwa, Tri Mumpuni et al. “Electricity Governance in Indonesia: Assessment Report.” World Resources Institute, 2007. Accessed July 23, 2013. http://pdf.wri.org/ egi_report_indonesia.pdf. International Energy Agency. “Access to Electricity 2011.” Accessed July 21, 2013. http://www. worldenergyoutlook.org/resources/energydevelopment/accesstoelectricity/.
World Bank Data Bank. “Access to electricity (% of population).” Accessed July 23, 2013. http://data. worldbank.org/indicator/EG.ELC.ACCS.ZS.
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11
World Bank Data Bank. “Electric power transmission and distribution losses (% of output).” Accessed July 21, 2013. http://data.worldbank.org/indicator/EG.ELC.LOSS.ZS.
12
Adapted from:
Asia-Pacific Economic Cooperation. “Energy Overview 2012.” Accessed July 23, 2013. http://publications. apec.org/publication-detail.php?pub_id=1432. Energdata. “Energy intensity of GDP at constant purchasing power parities.” Accessed July 21, 2013. http:// yearbook.enerdata.net/energy-intensity-GDP-by-region.html. 13
Adapted from:
International Energy Agency. “Statistics and Balances 2009.” Accessed July 21, 2013. https://www.iea.org/ stats/. Intergovernmental Panel on Climate Change. “Revised 1996 Intergovernmental Panel on Climate Change’s National Guidelines.” Accessed August 1, 2013. http://www.ipcc-nggip.iges.or.jp/public/gl/invs1.html. 14
Adapted from:
Energy Market Authority of Singapore. “Singapore Energy Statistics, 2012.” Accessed July 21, 2013. http:// www.ema.gov.sg/media/files/publications/EMA_SES_2012_Final.pdf. Maurer, Luiz T., and Luiz A. Barroso. Electricity Auctions: An Overview of Efficient Practices. Washington D.C.: International Bank for Reconstruction and Development/ World Bank, 2011. Accessed July 23, 2013. http://www.ifc.org/wps/wcm/connect/8a92fa004aabaa73977bd79e0dc67fc6/ Electricity+and+Demand+Side+Auctions.pdf?MOD=AJPERES. Perusahaan Listrik Negara. “Indonesian Electricity Tariff.” Accessed July 23, 2013. http://www.pln.co.id/ eng/?p=534. Lee, Seung-Hoon. “Electricity in Korea.” Asia-Pacific Economic Cooperation, 2011. Accessed July 23, 2013. http://mddb.apec.org/Documents/2011/SOM/SYM/11_som_sym1_009.pdf. Wu, Yanrui, Xunpeng Shi, Fukunari Kimura et al. Energy Market Integration in East Asia: Theories, Electricity Sector and Subsidies. Jakarta: Economic Research Institute for ASEAN and Eastern Asia, 2012. Accessed July 23, 2013. http://www.eria.org/RPR-2011-17.pdf. 15
Adapted from:
Organization for Economic Co-operation and Development. “Energy Statistics of Non-OECD Countries (2012).” Accessed July 23, 2013. http://www.oecd-ilibrary.org/energy/energy-statistics-of-non-oecdcountries_19962851-en. U.S. Energy Information Administration. “Countries Data.” Accessed July 21, 2013. http://www.eia.gov/ countries/data.cfm. 16
Adapted from:
International Energy Agency. “Statistics and Balances 2009.” Accessed July 21, 2013. https://www.iea.org/ stats/. Organization for Economic Co-operation and Development. “Energy Statistics of Non-OECD Countries (2012).” Accessed July 23, 2013. http://www.oecd-ilibrary.org/energy/energy-statistics-of-non-oecdcountries_19962851-en.
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Green Infrastructure Finance
17
Organization for Economic Co-operation and Development. “Energy Statistics of Non-OECD Countries (2012).” Accessed July 23, 2013. http://www.oecd-ilibrary.org/energy/energy-statistics-of-non-oecdcountries_19962851-en.
18
Standard & Poor’s Rating Services. “Sovereigns Rating List.” Accessed July 21, 2013. http://www. standardandpoors.com/ratings/sovereigns/ratings-list/en/us.
19
World Bank. “Doing Business Economy Rankings.” Accessed July 21, 2013. http://www.doingbusiness.org/ rankings.
20
Transparency International. “Corruption Perceptions Index 2011.” Accessed July 21, 2013. http://www. transparency.org/cpi2011/results.
21
Adapted from:
World Bank Data Bank. “Foreign direct investment, net inflows (% of GDP).” Accessed July 23, 2013. http:// data.worldbank.org/indicator/BX.KLT.DINV.WD.GD.ZS. World Bank Data Bank. “Foreign direct investment, net outflows (% of GDP).” Accessed July 23, 2013. http://data.worldbank.org/indicator/BM.KLT.DINV.GD.ZS. 22
World Bank. “Private Participation in Infrastructure Database - Sector Data Snapshot.” Accessed July 21, 2013. http://ppi.worldbank.org/explore/ppi_exploreSector.aspx?sectorID=2.
23
World Bank Data Bank. “Lending interest rate (%).” Accessed July 23, 2013. http://data.worldbank.org/ indicator/FR.INR.LEND.
24
World Bank Data Bank. “Interest rate spread (lending rate minus deposit rate, %).” Accessed July 23, 2013. http://data.worldbank.org/indicator/FR.INR.LNDP.
25
World Bank Data Bank. “Liquid assets to deposits and short term funding (%).” Accessed July 23, 2013. http://data.worldbank.org/indicator/GFDD.SI.06.
26
Central Intelligence Agency Factbook. “Country: Malaysia.” Accessed August 16, 2013. https://www.cia.gov/ library/publications/the-world-factbook/geos/my.html.
27
International Energy Agency. “Share of total primary energy supply (2009): Malaysia.” Accessed August 23, 2013. http://www.iea.org/stats/pdf_graphs/MYTPESPI.pdf.
28
International Energy Agency. “Electricity generation by fuel (2009): Malaysia.” Accessed August 16, 2013. http://www.iea.org/stats/pdf_graphs/MYELEC.pdf.
29
International Energy Agency. “2009 Energy Balance for Malaysia.” Accessed August 16, 2013. http://www. iea.org/stats/balancetable.asp?COUNTRY_CODE=MY.
30
Ministry of Natural Resources and Environment of Malaysia. “Media and Publication.” Accessed August 19, 2013. http://www.nre.gov.my/English/MediaCentre/Pages/default.aspx.
Adapted from:
31
International Energy Agency. “CO2 Emissions from Fuel Combustion, 2012.” Accessed August 19, 2013. http://www.iea.org/co2highlights/co2highlights.pdf.
Sustainable Energy Development Authority Malaysia. “Renewable Energy Development and FiT Implementation in Malaysia.” Accessed August 23, 2013. http://eeas.europa.eu/delegations/malaysia/ documents/press_corner/all_news/2012/160512_fp7seda_en.pdf.
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Adapted from:
32
Central Bank of Malaysia. “Monthly Statistical Bulletin- July 2009.” Accessed August 19, 2013. http://www. bnm.gov.my/index.php?ch=116&pg=352&ac=4. Ministry of Energy, Green Technology and Water of Malaysia. “National Energy Balance 2007.” Accessed August 19, 2013. http://www.kettha.gov.my/en. Jalal, Thahirah Syed, and Pat Bodger. “National Energy Policies and the Electricity Sector in Malaysia.” Proceedings of ICEE 2009 3rd International Conference on Energy and Environment, Malacca 2009. Accessed August 21, 2013. http://webcache.googleusercontent.com/search?q=cache:SXyrULXPioUJ:www. researchgate.net/publication/224107968_National_Energy_Policies_and_the_electricity_sector_in_Malaysia/ file/9fcfd5092d8c6dc61f.pdf+malysia+National+Depletion+Policy&cd=2&hl=en&ct=clnk&gl=us.
33
Ministry of Energy, Green Technology and Water of Malaysia. “Energy Programs/ Projects.” Accessed August 19, 2013. http://www.kettha.gov.my/en.
34
Government of Malaysia. “Act 327 - Promotion of Investment (1986).” Accessed August 19, 2013. http:// www.agc.gov.my/Akta/Vol.%207/Act%20327.pdf.
35
Prime Minister of Malaysia. “Eighth Malaysia Plan, 2001-2005.” Accessed August 19, 2013. http://www.epu. gov.my/en/eighth-malaysia-plan-2001-2005.
36
Nippon Koei Co., Ltd and ORIX Corporation. “Study on the Solar Photovoltaic Power Generation Projects in the Federation of Malaysia.” Accessed September 12, 2013. http://www.jetro.go.jp/jetro/activities/ contribution/oda/model_study/earth_infra/pdf/h23_saitaku_15e.pdf.
37
Mustapa, S. I., L. Y. Peng, and A. H. Hashim. “Issues and Challenges of Renewable Energy Development: A Malaysian Experience.” IEEE (2010): 1-6.
38
Chin, Melissa. “Biofuels in Malaysia: An analysis of the legal and institutional framework.” Center for International Forestry Research, 2011. Accessed August 19, 2013. http://www.cifor.org/publications/pdf_files/ WPapers/WP64CIFOR.pdf.
39
Hashim, Haslenda, and Wai Shin Ho. “Renewable energy policies and initiatives for a sustainable energy future in Malaysia.” Renewable and Sustainable Energy Reviews 15, no. 9 (December 2011): 4780-4787.
40
Sustainable Energy Authority Malaysia. “National Renewable Energy Policy and Action Plan (2009).” Accessed August 19, 2013. http://seda.gov.my/go-home. php?omaneg=00010100000001010101000100001000000000000000000000&s=31.
41
Adapted from:
42
Hashim, Haslenda, and Wai Shin Ho. “Renewable energy policies and initiatives for a sustainable energy future in Malaysia.” Renewable and Sustainable Energy Reviews 15, no. 9 (December 2011): 4780-4787. Accessed August 19, 2013. http://www.sciencedirect.com/science/article/pii/S1364032111003182. Sustainable Energy Authority Malaysia. “National Renewable Energy Policy and Action Plan (2009).” Accessed August 19, 2013. http://seda.gov.my/go-home. php?omaneg=00010100000001010101000100001000000000000000000000&s=31. Adapted from:
43
Maybank. “10th Malaysia Plan (2011-2015).” Accessed August 19, 2013. http://www.btimes.com.my/Current_ News/BTIMES/Econ2007_pdf/10th%20Malaysia%20Plan%202011-2015.
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Green Infrastructure Finance
PricewaterhouseCoopers. “Asia Pacific Tax Notes: Malaysia.” Accessed August 19, 2013. http://www.pwchk. com/webmedia/doc/634747683539805077_aptn_jun2012_my.pdf. Hasan, Ahmad Fauzi. “Issues, Challanges and Priorities in Malaysia.” Energy Commission of Malaysia, 2009. Accessed September 12, 2013. http://www.erc.or.th/ERCWeb/Upload/Document/11.00-12.30%201Ahmad%20 Fauzi%20Hasan%20%28Malaysia%29.pdf.
44
Malek, Badriyah Abdul. “Renewable Energy Development in Malaysia: Overview of Renewable Energy Policy.” Sustainable Energy Authority Malaysia, 2011. Accessed August 19, 2013. http://ensearch.org/wpcontent/uploads/2011/11/HERE1.pdf.
45
Sustainable Energy Authority Malaysia. “FiT Dashboard.” Accessed August 19, 2013. http://seda.gov.my/.
46
The Institute for Energy Economics Japan. “The 2nd ASEAN Energy Demand Outlook.” Accessed August 19, 2013. http://www.energycommunity.org/documents/SecondASEANEnergyOutlook.pdf.
47
Adapted from:
48
Asia-Pacific Economic Cooperation. “Peer Review on Energy Efficiency in Malaysia.” Accessed August 19, 2013. http://www.ewg.apec.org/documents/9b_Malaysia%20PREE%20Report_Final%20Draft.pdf. Sustainable Energy Authority Malaysia. “National Renewable Energy Policy and Action Plan (2009).” Accessed August 19, 2013. http://seda.gov.my/go-home. php?omaneg=00010100000001010101000100001000000000000000000000&s=31. United Nations Economic and Social Commission for Asia and Pacific. “Low Carbon Green Growth Roadmap for Asia and the Pacific Fact Sheet.” Accessed August 19, 2013. http://www.unescap.org/esd/environment/ lcgg/documents/roadmap/case_study_fact_sheets/Fact%20Sheets/FS-Subsidy-reforms.pdf.
49
Adapted from:
50
Hashim, Haslenda, and Wai Shin Ho. “Renewable energy policies and initiatives for a sustainable energy future in Malaysia.” Renewable and Sustainable Energy Reviews 15, no. 9 (December 2011): 4780-4787. Accessed August 19, 2013. http://www.sciencedirect.com/science/article/pii/S1364032111003182. Ministry of Energy, Green Technology and Water of Malaysia. “Solar Energy.” Accessed August 19, 2013. http://www.kettha.gov.my/en/content/solar-energy. Ministry of Energy, Green Technology and Water of Malaysia. “Small Renewable Energy Power Programme.” Accessed August 19, 2013. http://www.kettha.gov.my/en/content/small-renewable-energypower-programme-srep.
51
Lim, C.H., E. Salleh, and P. Jones. “Renewable energy policy and initiatives in Malaysia.” International Journal on Sustainable Tropical Design Research & Practice 1 (December 2006): 33-40.
52
Green Tech Malaysia. “About us.” Accessed August 19, 2013. http://www.greentechmalaysia.my/Pages/ pages.aspx?View=AboutUs#second.
53
Green Tech Malaysia. “Green Technology.” Accessed August 19, 2013. http://www.greentechmalaysia.my/ GreenTechnology.aspx.
54
Ministry of Energy, Green Technology and Water of Malaysia. “Handbook on the Malaysian FiT for the Promotion of Renewable Energy.” Accessed August 19, 2013. http://www.mbipv.net.my/dload/FiT%20 Handbook%20English.pdf.
55
46
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Green Investment Climate Country Profile - Malaysia
Schwab, Klaus. “Global Competitiveness Index.” World Economic Forum, 2012. Accessed July 23, 2013. http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdf.
56
Business Times Malaysia. “Malaysia drops in competitiveness report.” Accessed August 19, 2013. http://www. btimes.com.my/articles/20120905161909/Article.
57
World Bank. “Private Participation in Renewable Energy Database.” Accessed July 30, 2013. http://ppi-re. worldbank.org/Data.
58
Adapted from:
59
Bin Othman, Zainal Abidin. “The Future of Hydropower in Malaysia.” SMEC (Malaysia), 2005. Accessed August 20, 2013. http://dspace.unimap.edu.my/dspace/bitstream/123456789/13823/1/The%20Future%20 of%20Hydropower%20in%20Malaysia.pdf. International Energy Agency. “Key World Energy Statistics 2012.” Accessed August 20, 2013. http://www.iea. org/publications/freepublications/publication/kwes.pdf. Asia-Pacific Economic Cooperation. “Peer Review on Energy Efficiency in Malaysia.” Accessed August 19, 2013. http://www.ewg.apec.org/documents/9b_Malaysia%20PREE%20Report_Final%20Draft.pdf.
60
Strategy Coordination and Support Group. “Upfront Tax Planning.” Accessed August 20, 2013. http://www. scsg.com.my/html/services_tax_advisory3.htm.
61
Ministry of National Resources and Environment of Malaysia. “Second National Communication to the UNFCCC.” Accessed August 20, 2013. http://www.nre.gov.my/Malay/Alam-Sekitar/Documents/Penerbitan/ SECOND%20NATIONAL%20COMMUNICATION%20TO%20THE%20UNFCCC%20(NC2).pdf.
62
Chua, Shing Chyi. “Review on Malaysia’s national energy developments: Key policies, agencies, programmes and international involvements.” Renewable and Sustainable Energy Reviews 14, no. 9 (December 2010): 2916-2925. Accessed August 20, 2013. http://www.sciencedirect.com/science/journal/13640321/14.
63
Green Building Index. “What and Why?.” Accessed August 21, 2013. http://www.greenbuildingindex.org/ why-green-buildings.html.
64
Cheok, Cheong Kee. “Missing the Point: Malaysia’s Debate on Fuel Price Subsidies.” Ekonomika, 2009. Accessed August 22, 2013. http://www.pem.org.my/doc/Ekonomika_%28Jan-Mar09%29.pdf.
65
Green Technology Malaysia. “GTFS Guideline.” Accessed August 22, 2013. http://www.gtfs.my/page/gtfsguideline.
66
Ministry of National Resources and Environment of Malaysia. “Malaysia’s Strategic Green Initiatives.” Accessed August 22, 2013. http://www.doe.gov.my/portal/wp-content/files-attachment/Publication%20-%20 Penerbitan/04.%20Periodic%20Publication%20-%20Penerbitan%20Berkala%20/Impak/2010/Impak%20 2010%20Bil%203.pdf.
67
Green Technology Malaysia. “Green Technology Future Opportunities in Malaysia.” Accessed August 22, 2013. http://malaysia-europeforum.com/download/vienna-series/Dr%20Nazily%20Slide.pdf.
68
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I
n July 2012, the Green Infrastructure Finance Framework Report was published to address the constraints in financing green infrastructure and to develop a new PPP-based approach to accelerate investments in lowemission technologies. The approach calls for assessing the â&#x20AC;&#x153;Green Investment Climateâ&#x20AC;? of a given country in order to develop country-specific recommendations for policy and incentive programs as well as other measures which can be introduced in order to further promote green growth in an economy. This report includes one of the first Green Investment Country Profiles completed for the East Asia and Pacific Region as part of bringing the approach closer to operational status. The initial countries include China, Philippines, Vietnam, Malaysia, Indonesia, Singapore and South Korea. The assessment involves not only the green policy and incentives environment, but also the countryâ&#x20AC;&#x2122;s overall natural resource endowment of fossil and renewable energy, its industrial development strategy in addition to general business indicators and other considerations, such as electricity prices, the capacity of the financial sector to mobilize long-term domestic financing, as well as their overall regulatory and legal capacity to implement PPPs. The country profiles provide a general understanding of the attractiveness, prevailing trends, strengths, and other aspects affecting the ability of the country to leverage its green growth potential.
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