Malaysia has set an ambitious target to achieve net-zero as early as 2050, reducing carbon emissions intensity of its GDP up to 45% by 2030. This vision calls for a rapid transformation of the country’s energy landscape, as outlined by the National Energy Transition Roadmap’s (NETR) accelerated target of reaching 70% renewable energy (RE) capacity by 2050. 

This will require a ‘whole-of-society’ approach to address critical gaps in policy, funding, and literacy and create a more enabling environment for widespread decarbonisation

More recently, the new and expanded allocations announced under Budget 2025 further reinforce the government’s commitment to lead on environmental stewardship. Nonetheless, with renewables today accounting only for about 5% of Malaysia’s electricity generation capacity, there is still a long way to go on our net-zero journey. 

Despite making notable progress in recent years, more needs to be done for Malaysia to achieve the pace needed to realise its net-zero ambition. This will require a ‘whole-of-society’ approach to address critical gaps in policy, funding, and literacy and create a more enabling environment for widespread decarbonisation. 

 Streamlining energy policies and regulations 

The 12th Malaysia Plan, 2021-2025, first set out Malaysia’s national aspirations to achieve carbon neutrality as early as 2050. Meanwhile, the National Energy Policy (NEP) 2022-2040 and Malaysian Renewable Energy Roadmap (MyRER) laid the groundwork for ensuring the energy transition remains fair and inclusive for all Malaysians. 

Finally, the National Energy Transition Roadmap (NETR) launched last year has set the nation off on a transformational journey with the rollout of key infrastructure initiatives. While the NETR highlights the investments required for infrastructure, there is opportunity to enhance clarity around the broader strategy for integrating more RE into the energy mix.    

In some areas, bridging the gap between policy design with its communication and implementation could further encourage widespread RE adoption. This includes addressing uncertainties around reforms of the Malaysia electricity supply industry, third-party access framework, as well as the future of the Net Energy Metering (NEM) mechanism.  

Moreover, the role of decarbonisation enablers like battery storage and carbon capture, utilisation and storage (CCUS) technologies are difficult to ascertain given their commercial use is relatively nascent. New rules need to be created to spur the adoption of the latest green technologies, along with regulatory frameworks to overcome intermittency concerns.  

To enable more proactive planning backed by effective implementation, the government should also consider clarifying targets for future regulations and RE capacity addition. These should be complemented with short, medium, and long-term implementation plans, with clearly defined milestones especially for the highest-emitting sectors.  

Accelerating clean energy financing 

Securing the long-term gains to be achieved by implementing clean energy infrastructure and technologies also hinges on higher levels of upfront investment today. In fact, Malaysia will need RM637 billion in green investments until 2050 to achieve its target of 70% renewables from the current 25% in its installed capacity mix.  

Nonetheless, a working group at the World Economic Forum (WEF) found that discrepancies across various policies like the National Energy Policy (NEP), Malaysia Renewable Energy Roadmap (MyRER), and 12th Malaysia Plan – tend to create complexity for investors and project developers in designing investment plans and project pipelines.  

This highlights the need for greater coordination in energy policy making so that multiple planning bodies are able to issue coordinated plans across key industries – backed by proactive, consistent, and effective implementation. For instance, this can be achieved by defining the roles of various agencies at both federal and state levels to enhance investment certainty. 

On top of policy enablers, there are also non-policy solutions that Malaysia can explore to scale clean energy investments. Tenaga Nasional Berhad (TNB) recently became the first utility in ASEAN to establish a Transition Finance Framework for issuing green, social and sustainability debt instruments to fund its investments in low-carbon transition activities. 

Other innovative solutions that can fast-track the flow of clean energy investments include Renewable Energy Zones (REZ) that concentrate on RE projects and demand, thereby boosting the commercial feasibility of grid investments. Indeed, Malaysia’s first REZ – and ASEAN’s largest – will be piloted by a group of Malaysian partners led by Khazanah Nasional Berhad. 

Promoting pathways to energy education 

Beyond policies and funding for green infrastructure, a comprehensive understanding of the energy system that permeates all levels of society is key for achieving a successful energy transition. Without new habits and routines to conserve energy or galvanising public support for cleaner tech, climate progress will likely occur far more slowly than what is needed. 

Which is why effective energy education is paramount for driving the comprehensive changes needed to achieve Malaysia’s net-zero aspirations. In fact, with sustainability efforts poised to transform industries globally – energy knowledge and literacy will become a critical skill to thrive in the workplace of the future.  

Beyond policies and funding for green infrastructure, a comprehensive understanding of the energy system that permeates all levels of society is key for achieving a successful energy transition

Initiatives like the Malaysia Energy Literacy Program (MELP) represent a step in the right direction towards developing a new generation of energy-sensitive Malaysians. Nonetheless, there is a need for more comprehensive energy education in the public education system to prepare for future talent as well as sustainability demands.  

While energy education begins as early as primary school in Malaysia, learning modules and methods should be updated to become more engaging and student-centered. An integrated instructional approach to STEM learning is critical to enhance students’ capability to make sense of how energy applies to various aspects of their daily lives.  

There should also be a stronger focus on leveraging AI and other digital technologies to overcome traditional educational barriers, while boosting engagement with students. Educational reforms to promote greater energy awareness and knowledge should be aligned with broader developmental plans for creating a clean energy workforce.  

Supercharging collaboration in the race to net-zero 

Achieving Malaysia’s ambitious net-zero targets will require a coordinated approach that not only tackles policy and regulatory challenges, but also fosters investment and public education. The nation can set the stage for a transformative energy landscape by prioritising consistent policy execution, innovative financing, and future-ready energy education. 

Ultimately, turning Malaysia’s net-zero vision into reality will require collaborative efforts from the government, private sector, as well as Malaysians themselves. Leading by example, the nation can become a regional clean power hub that further inspires a virtuous cycle of clean energy collaboration and partnerships in the broader ASEAN region.