Malaysia missing better rules, green energy to attract investment

Free Malaysia Today

05-05-2025

Asia Zero Emission Community ambassador Takio Yamada said Malaysia needs to adopt a joint carbon credit system to accelerate green investments.
KUALA LUMPUR : Malaysia must improve in several areas to attract more high-value investments, according to Takio Yamada, ambassador of the Asia Zero Emission Community (Azec).
Azec, comprising 11 member countries across the Asia-Pacific, including Japan, is dedicated to enhancing regional cooperation to achieve carbon neutrality and net-zero emissions.
In an interview with FMT, Yamada said while Malaysia's strong physical infrastructure was a key attraction for investors, the slow pace of its green reforms remains a concern for many.
'New measures have to be introduced to accelerate investment. A joint carbon credit system is one of them,' he said.
In 2011, Japan established the Joint Crediting Mechanism (JCM) to promote decarbonising technologies through investments by Japanese entities, with the goal of reducing greenhouse gas emission while supporting sustainable development in partner countries.
As of 2025, JCM has partnerships with 29 countries. Although Malaysia is not currently a signatory, reports indicate that it is actively exploring a bilateral partnership agreement with Japan.
Given the rapid expansion in high-tech industry investments in Malaysia, Yamada said there was a need to enhance the country's infrastructure to support sufficient green energy supply.
While Malaysia aims to achieve 70% renewable energy capacity by 2050, as of 2023, renewables made up only 23% of its total power generation mix.
'Ensuring there is sufficient infrastructure to support green energy supply will definitely help Malaysia invite new technology-oriented and high-value investment from abroad.
'Japan wishes to cooperate with Malaysia in improving these areas,' he said.
Malaysia, a longstanding energy partner of Japan
Yamada also highlighted the longstanding energy partnership between Malaysia and Japan, particularly on liquefied natural gas (LNG).
'But that's not the only thing that we can do together. There are many opportunities we can explore to develop green energy supply capacity in Malaysia,' he said.
Malaysia is one of Japan's key suppliers of LNG, providing 10.2 million tonnes or 15.8% of Japan's total LNG imports in 2023.
Much of this supply comes from Sabah and Sarawak, with the latter playing an increasingly strategic role in supporting Japan's energy needs.
Sarawak has launched the Sarawak Gas Roadmap to transform the state into a regional energy powerhouse, leveraging its natural gas reserves to foster low-carbon industrialisation and meet global energy transition demands.
Additionally, SEDC Energy Sdn Bhd, in collaboration with Japan's Sumitomo Corp and Eneos Corp, is spearheading the H2ornbill Project, which aims to produce 90,000 tonnes of green hydrogen annually.