The energy transition may have been a familiar phrase to Malaysia’s policymakers and leaders of large energy companies for years now but the country’s broader workforce still knows worryingly little about the topic, say those on the ground.
Discussions about how workers will be affected by the energy transition, including potential job losses or new skill requirements, are not happening at a grassroots level, said Sivaranjani Manickam, general secretary of the Malaysian Socialist Party and representative of the Government Contract Workers Network.
“Whenever we talk to workers about environmental issues, awareness is very low. To be very honest, discussions about the energy transition have not happened,” she said.
Instead, workers have been more concerned about economic issues such as wages, Manickam told Eco-Business at the recent launch of a report on the just energy transition in Peninsular Malaysia.
The report, produced by environmental non-profit Klima Action Malaysia, highlighted that there is minimum to no awareness of the energy transition among trade unions in the country. This is unsurprising given the low rate of unionisation in Malaysia, said Adrian Pereira, executive director of social justice non-profit North-South Initiative. Only about 6 per cent of the country’s workforce is unionised, out of a total labour force of 17.05 million people in 2024.
But “if unions are weak and disorganised, they would hesitate to talk about global issues such as a just energy transition as they don’t have the leadership nor capacity” to initiate such conversations, Pereira said.
The report highlighted that workers most at risk from the energy transition are those in emissions-intensive industries, such coal, oil and gas, steel and cement, as well as those further down the value chain. These include sectors such as petrol and diesel-dependent automotives, chemicals, construction, manufacturing and agriculture.
Sivaranjani Manickam, general secretary of the Malaysian Socialist Party and representative of the Government Contract Workers Network, said that discussions about the energy transition are not happening at a grassroots level. Image: Klima Action Malaysia
Coincidentally, Malaysia’s national oil company Petronas announced earlier this month that it would restructure its workforce this year, with details about the affected personnel to be announced in the second half of the year. The company’s chief executive officer Tengku Muhammad Taufik described the exercise as a “rightsizing” of its workforce and not a retrenchment, but said that some employees would be deployed to new roles while others are displaced.
“This is to ensure the survival of Petronas in the coming decades,” said Taufik. “If we don’t do it now, there will be no Petronas in 10 years.”
The restructuring is mainly expected to affect those in administrative roles, which currently total up to 16,000 Petronas employees against its full workforce of almost 53,000 people, he added.
While those on the front lines of oil and gas exploration and production do not appear to be affected this year, government officials have acknowledged that the country’s gas reserves are rapidly shrinking.
Minister of economy Rafizi Ramli said that the reserves of Peninsula Malaysia and Sabah have shrunk at rates of 7 per cent and 4 per cent annually, although Sarawak, which makes up nearly 60 percent of the country’s total gas reserves, still has a stable supply.
On the other hand, Petronas foresees an urgent demand for skilled manpower in the decommissioning of old oil rigs. In its recent 2025 to 2027 activity outlook for the country’s oil and gas sector, Petronas said that it will require up to 25,000 workers in early 2026 and 2027 to service approximately 50 turnarounds, in which oil rigs are closed for maintenance, inspection and repairs, and shutdowns across Malaysia.
“The dynamic and resource-intensive work will require skilled labour…in trades like mechanical fitters, scaffolders and welders,” it said. However, the sector is currently facing a significant shortage of skilled manpower, as there is a “noticeable gap between the skills required by the industry and the skills possessed by the available workforce.”
New energy, new jobs?
Malaysia’s National Energy Transition Roadmap (NETR), published in 2022, estimates that a successful energy transition would generate 310,000 jobs in the country by 2050. However, it is unclear whether these new jobs would offset the loss of fossil fuel jobs, nor whether they would be high-skilled jobs that command the same income levels.
“When we think about the job creation aspect of the energy transition, [policymakers] always seem to highlight the total number of jobs that will be created. But are these high quality jobs with decent pay and good working conditions?” questioned Aznita Pharmy, lead researcher for KAMY’s report.
The NETR acknowledged that there would be a decline in jobs in “non-green areas” but did not offer any estimates of how many workers would be affected. According to Malaysia’s Department of Statistics, the energy sector accounted for around 4 million people or a quarter of the country’s total workforce in 2019.
Data from Malaysia’s oil and gas services and equipment (OGSE) industry states that there are 59,000 “core talents” employed across some 4,000 companies in the sector. However, while the industry’s 2021 to 2030 blueprint for talent development prioritises retaining skilled workers, promoting career progression and expanding engineering courses, it does not mention the energy transition.
KAMY’s report also highlighted the challenges in replacing jobs in fossil-fuel dependent sectors with those in cleaner energy, citing disparities in geographic location and skill transferability as challenges. “Many workers may require reskilling, as some existing skills are not transferable, and there is a risk of new green jobs being low-wage and low-skill.”
This is apparent in the current income disparity between solar power and oil and gas workers, as workers in the solar industry typically earn less than their peers in oil and gas, said Hakim Albaswary, chief strategy officer at Singaporean renewables firm Bright Spots Energy.
“The difference between [wages across] the two sectors comes down to the margins,” he told Eco-Business, with the oil and gas sector able to secure as much as three times the profit margins of solar power. A recent study showed that solar generation in Peninsular Malaysia cost 53 per cent less than fossil fuels in 2023.
“As a result, if you were to normalise the work across the board, you would find that working in solar versus oil and gas is less profitable for almost everyone in the value chain,” said Hakim.
However, renewable energy is increasingly creating more jobs globally with better job security, he pointed out. Data from the United States Department of Energy in 2024 showed that clean energy is driving job growth in the country’s energy sector at a rate of 12.8 per cent since 2020.
National assessment, upskilling needed
Malaysia’s 2022 to 2040 National Energy Plan called for strategic workforce planning and future-proofing of skills to be conducted across the energy sector’s workforce, with initiatives such as academic and technical training as well “as sub-sector specific packages to support the equitable and smooth transition of workforce in line with the energy transition.”
However, KAMY’s report pointed out that there is currently no baseline assessment of how the energy transition will impact Malaysia’s workers, especially beyond the fossil fuel industry. It recommends that the relevant government agencies conduct an in-depth assessment of the energy transition’s impact, prioritising sectors and communities most directly affected.
“The assessment should look at the impact of these job losses on local communities, especially those that heavily rely on fossil fuel jobs,” said KAMY researcher Aznita. “There have been good assessments on AI and on the green skills sector, but these could be strengthened further by incorporating business and human rights principles (into the assessment methodology).”
Aznita Pharmy, a researcher with environmental non-profit Klima Action Malaysia, said that Malaysia’s energy transition must account for whether new jobs in renewable energy are high quality jobs. Image: Klima Action Malaysia
Worker representative Manickam added that it is crucial for workers to be better informed of how the energy transition will affect their jobs. Without proper awareness and education on the changes to their job scopes caused by the energy transition, there are likely to be more disputes over labour contracts.
“There needs to be an avenue for us to discuss this at the grassroots level, with workers all across the country,” said Manickam.
Beyond public awareness, skills development policies should also be reviewed to support the relevant training, capacity building and curricula relevant to the energy transition, said KAMY’s report.
Among the government agencies that could support this initiative is the Human Resources Development Corp (HRDC), a government agency that manages the country’s Human Resources Development Fund (HRDF). Malaysian employers are required to contribute 1 per cent of each employee’s monthly salary to the fund, which can then be drawn on for certified training programmes.
“We have employers contributing to HRDF, but will employers be prioritising the use of these funds for reskilling or upskilling (due to the energy transition)?” asked Manickam.
According to HRDC’s 2023 annual report, renewable energy was one of nine focus areas as part of the training agency’s signature programmes but it is unclear what skills are being offered under these programmes.
Meanwhile, universities also have a critical role to play in building skills and capabilities related to the energy transition. “Institutions like ours are training the next generation of renewable and clean energy experts through specialised programmes,” said Dr Norasikin Ahmad Ludin, deputy director of the Solar Energy Research Institute (SERI) at the National University of Malaysia. For instance, SERI offers masters of science and doctorate programmes in renewable energy as well as certification courses related to the clean energy industry.
Universities also play a crucial role as research and development centres for renewable energy policies and technologies, said Norasikin, speaking at a seminar on accelerating the energy transition in Southeast Asia, hosted by the recently formed Southeast Asia Energy Transition Coalition. The coalition, initiated by Indonesian think tank Institute for Essential Services Reform, includes research centres such as SERI, the Institute of Energy Policy and Research at Malaysia’s Tenaga Nasional University, the Philippines’ Institute for Climate and Sustainable Cities and the Institute for Envrionment and Sustainability at the National University of Singapore.
Besides conducting data-driven research to better monitor the performance and impact of the country’s energy and climate policies, research centres require greater support and funding to develop more efficient energy technologies, she said.
“For example, we are currently in the first generation of solar photovoltaic panels, which are silicon-based panels. But the next generation of solar panels is still under research and it’s crucial for us to scale up,” said Norasikin. Perovskite-based solar panels, for instance, are much more environmentally friendly as new methods make these panels fully recyclable, but conducting research has been challenging globally due to inadequate investments and other challenges, she said.
“We need to partner with the industry and link (them) to our masters and PhD programmes, as well as for technology innovation and testing, so that we can develop projects that are relevant to industry,” she said.
