by ASILA JALIL / graphic by MZUKRI MOHAMAD
THE Malaysian government needs to make a bolder stance on its push towards a green economy to help make the transition process of the domestic market more sustainable.
Maybank Kim Eng head of regional equity research Anand Pathmakanthan said the government has to move beyond the tension it has between its dependence on “old industries” and the future.
“For electric vehicle (EV) as an example, we are still struggling to come up with a roadmap. There are so many conflicting interests in terms of fossil fuel and internal combustion engines (ICE) vehicles,” he said yesterday during a conference hosted by the research firm titled “Maybank Kim Eng and Asean Exchanges — Beyond the Pandemic Crisis”.
He was responding to a question on the future of EV in the country as Indonesia is putting massive efforts to produce EV in nine years, while putting an end to the use of ICE for vehicles altogether in the next 15 years.
He said there are various issues surrounding sustainability efforts that Putrajaya has to tackle but it should still generate plans to break the existing tension and come up with a blueprint to move forward.
Anand added that there’s no signal the nation is transitioning into EV when the country’s economic backbone is still fossil fuel-based as it is reliant on Petroliam Nasional Bhd.
“The government has to break those tensions, we have to be bolder. Not everyone can win from transitioning, there will be losers.
“The important point is to transition because if we do not do it, we risk being locked out of the global supply chain. It is not just about domestic regulation, we have to keep up with international regulation if we want other markets to remain open to us,” he said.
He noted many of Malaysia’s industries are still involved in “brown field” industries that are viewed as harmful to the environment.
To ensure transitions can take place within the industries involved, he said banks, the government and regulators should come together and provide incentives and assistance for the industries to invest and transition to a more “green” economy.
Financial institutions can provide advisory and capital to industry players to make the required changes as a huge amount of money will be required by industries to go green, he said.
“We do have real problems in Malaysia in terms of its huge dependence on industries which are dirty and require transition but the solution does not only rely on one authority driving it,” he said.
As a signatory to the Paris Agreement, Malaysia is committed to putting in efforts to reduce greenhouse gases by 45% by 2030.
Recently, the Minister of Energy and Natural Resources Datuk Seri Dr Shamsul Anuar Nasarah said Malaysia plans to increase the share of renewable energy (RE) in its installed capacity to 31% in 2025 and a further 40% in 2035 under its power generation plan.
The minister noted more than 7,000 megawatt of coal based power plant’s power purchase agreements (PPAs) in the country will expire by 2033 and be replaced mostly by gas and RE-based PPAs which would help lower Malaysia’s carbon emission levels.
As the transition takes place, he said the ministry would not discount the option of extending the operation of coal based power plants despite having no plans on building new ones.