Hydrogen’s adaptability and potential to drastically cut greenhouse gas emissions have made it a pivotal element in the quest for an alternative fuel of the future. As a clean energy carrier, hydrogen can be sourced from renewables, nuclear, and fossil fuels with carbon capture, emitting only water vapor when used in fuel cells.

This makes hydrogen essential for decarbonising sectors where electrification is challenging, such as heavy industry, shipping, and aviation. Leveraging its geographical advantages and renewable resources, Malaysia aspires to become the first hydrogen-driven economy in Southeast Asia.

Hydrogen as an alternative fuel of the future

 Hydrogen is the most abundant substance in the universe. It is also light, can be stored, and does not generate any pollutant emissions by itself. This makes it the perfect candidate for a clean fuel of the future. “Green” hydrogen refers to hydrogen produced with very low or zero carbon emissions using processes like electrolysis.

Hydrogen’s versatility and efficiency make it an attractive option for a host of industries, especially high emitters of greenhouse gases like transportation or manufacturing. Indeed, the global hydrogen market is projected to reach $201 billion by 2025, up from $135 billion in 2020, driven by increasing investments and supportive policies.

Major economies have already started implementing national policies and investment frameworks to accelerate hydrogen adoption, making it a key part of their net-zero strategies. The European Union’s Green Deal for instance aims to install 40 gigawatts (GW) of renewable hydrogen electrolysers by 2030.

Meanwhile, Japan, South Korea, and China are at the forefront of hydrogen technology development and deployment in the Asia-Pacific (APAC) region, with Japan planning to have 800,000 hydrogen fuel cell vehicles on the road by 2030, and South Korea targeting 6.2 million hydrogen fuel cell vehicles by 2040.

Countries worldwide are also forming strategic trade partnerships to advance hydrogen technology transfer, facilitate market access, and develop robust hydrogen supply chains. For instance, the EU has signed agreements with countries like Australia and Chile for boosting its hydrogen imports.

Although there has been mounting interest in hydrogen in recent years, much work is still needed to unlock its potential. Total hydrogen demand needs to increase fivehold between now and 2050 and installed production capacity for green hydrogen needs to increase 75-fold between now and 2030 to keep global warming under 1.5° Celsius.

Accelerating  Malaysia’s pathway to net-zero with hydrogen in the mix

Zooming into Malaysia, the nation is committed to achieve its net-zero aspiration through strategic policies including The New Industrial Master Plan (NIMP) 2030 and the National Energy Transition Roadmap (NETR). Both plans are expected to accelerate the country’s transition to a low-carbon economy with a net zero aspiration by 2050, and open large investment opportunities.

The Ministry of National Resources and Environmental Sustainability is also , expected to be launched in September this year. The bill seeks to accommodate various mechanisms needed to reduce the country’s emissions, such as carbon pricing.

What’s more, the country’s abundance  in renewable resources, such as solar, wind, and hydro, offer a strong foundation for green hydrogen production. Through the its first low-carbon hydrogen hub by 2030, with plans for additional hubs by 2050.

This is part of a broader strategy to achieve 70% renewable energy capacity by 2050, positioning Malaysia as a leader in the regional and global green hydrogen market. Catalyst projects outlined under the NETR include the decarbonisation of Tenaga Nasional Berhad (TNB)’s generation plants by co-firing of hydrogen and ammonia.

Following the launch of the NETR, the further outlines specific plans for green hydrogen production in Malaysia, aimed at both local consumption and export markets including China, Japan, South Korea, and Singapore.

The recently formed Ministry of Energy Transition and Water Transformation (PETRA) will collaborate extensively with both the public and private sectors to propel the goals set forth in the HETR as the implementing agency. This includes governmental bodies like the Energy Commission (ST) and the Sustainable Energy Development Authority (SEDA).

Nonetheless, the HETR also acknowledges several challenges in developing a hydrogen economy across the value chain – from unsustainable renewable feedstock as a source for hydrogen production, to the high investment costs involved in adopting green technology into the existing processes for extracting hydrogen.

To address these challenges, the HETR takes a phased approach in transitioning to a hydrogen-powered economy – outlining initiatives to be achieved in the short, mid, and long-terms. Beginning with hydrogen production cost,  hydrogen or hydrogen produced using fossil fuels will be gradually phased out in the short-term.

As a result, blue hydrogen, or hydrogen produced from natural gas but utilising carbon capture and storage (CCUS) technologies will see an increase in price with limited availability of natural gas in the medium term. That said, it will serve as an important transitionary fuel while the production of truly ‘green’ hydrogen is being scaled up.

Finally, the long-term strategic approach will seek to make green hydrogen more price-competitive by increasing the targeted conversion efficiency of renewable technologies across the hydrogen value chain. This would eventually lead to a gradual reduction of green hydrogen prices, which in turn drives widespread adoption across industries.

Unlocking hydrogen’s benefits for people and planet

The development of Malaysia’s hydrogen economy under the aggressive route taken by the HETR would achieve a maximum 10% reduction in greenhouse gas emissions (GHG) by 2050. This is a drastic acceleration of the nation’s net-zero transition compared to the business-as-usual scenario of 1.57% reduction in GHG by 2050 without hydrogen.

Not only will hydrogen fast-track Malaysia’s clean energy transition, it will also unlock significant economic benefits along the short, medium, and long-terms – starting with capturing 10% of APAC’s total hydrogen demand with revenues of RM20 billion, to becoming a major exporter in the region with revenues of up to RM408 billion.

All these revenues reflect the benefits of infrastructure development for export, utilisation in domestic sectors, and opens a new platform for job creation. The HETR estimates the creation of over 228,000 green jobs by the year 2050, which is approximately 60,000 more jobs creation compared to the baseline scenario.

That said, hydrogen as a fuel source is still in its infancy in Malaysia – with high initial investment costs and difficulties related to hydrogen transportation and storage. Cross-sectoral collaboration between all players in the hydrogen value chain will be critical to address the gaps and build a sustainable hydrogen ecosystem in Malaysia.

Pioneering the way to unlock hydrogen’s benefits, the state of Sarawak has formed several partnerships for green hydrogen projects worth a total of US$4.2 billion. SEDC Energy, a subsidiary of the Sarawak Economic Development Corporation, sealed a deal with two Japanese companies last year to jointly develop a clean hydrogen supply chain.

More recently, SEDC Energy signed an agreement with clean energy solutions provider, Gentari through its subsidiary Gentari Hydrogen, for the joint development of a centralised hydrogen production hub to be known as the Sarawak H2 Hub. The hub will serve as the sole supplier of green hydrogen for downstream facilities in the Bintulu area.

With Sarawak’s green hydrogen ventures making significant strides, it is well placed to lead Malaysia’s accelerated transition to a net-zero carbon economy. In the long-term, the development of Malaysia’s hydrogen economy will ultimately create a high-skilled workforce and a progressive, inclusive society as envisioned under Malaysia MADANI.

Paving the way for a hydrogen-powered future

 In the future, hydrogen will be an essential energy carrier made safely from renewable energy sources with virtually no pollution. But before it can assume a more significant role, there is a need to address the high costs of building new facilities and systems to accommodate the widespread distribution and use of hydrogen across industries.

Malaysia’s ambitious plans outlined in both the NETR and HETR reflect a pragmatic and comprehensive approach to develop a robust hydrogen ecosystem in Malaysia. With the right implementation, backed by a robust incentive framework, and strong private buy-in, the country is posed to ride the hydrogen wave into a more sustainable future for all.