There are hopes that new energy efficiency regulations in Malaysia will finally lead to meaningful and measurable decreases in electricity usage and hold consumers accountable.
The nation implemented its Energy Efficiency and Conservation Act (EECA) on 1 January 2025 to reduce energy usage among large energy consumers, including those in the commercial and industrial sectors. This will require large office buildings, for example, to meet specific building energy intensity standards and be subject to energy audits if they fail to meet requirements.
The EECA is the latest regulatory push within Malaysia that aims to help the nation meet its net zero ambition by 2050 and follows a raft of other climate-focused measures announced in recent years.
For instance, it comes after the National Energy Transition Roadmap (NETR), which was announced in full in 2023, outlining plans for the country to achieve 31 per cent renewable energy in its energy mix by this year, 40 per cent by 2035, and 70 per cent by 2050.
Another widely anticipated piece of legislation is Malaysia’s Climate Change Bill, which, once introduced later this year, will aim to provide a legal framework for climate action, including carbon pricing and emissions reduction strategies.
While these regulations signal progress in the nation’s journey towards decarbonisation and emission reductions, such policies also put the onus on businesses to comply and, in doing so, seek solutions, notes Wilson Puon, head of integrated clean energy solutions, Ditrolic Energy, an integrated energy company specialising in renewable energy solutions.
“It is a combination of global pressures, regulatory frameworks, and consumer expectations,” Puon said, referring to factors that are leading to increased urgency concerning decarbonisation in Malaysia.
Decarbonisation challenges
It can be argued that the country’s rising energy consumption is another factor driving Malaysia’s decarbonisation push.
The nation’s energy usage has increased by nearly 20 per cent in the last decade, rising from roughly 124 terawatt hours (TWh) in 2014 to around 148 TWh in 2024. Energy consumption is projected to reach 220 TWh by 2033.
For context, one TWh is enough to power approximately 100 million homes for one hour.
Malaysia is also still largely reliant on fossil fuels for energy, which comprise more than 75 per cent of its energy mix. The country’s industrial sector accounts for around 50 per cent of all electricity use, with the commercial and residential sectors responsible for the other half.
This may be why Puon is seeing growing interest in renewable energy solutions from more companies in Malaysia.
“Businesses are increasingly investing in solar panels and solar photovoltaic (PV) systems, as well as other forms of renewable energy to power their operations. [We are also seeing] manufacturing companies in Malaysia using solar energy to offset their electricity consumption,” he said.
This demand is also leading some businesses to ensure their value chain commits to the same low-carbon values.
“In terms of sustainable supply chain practices, companies are working with suppliers to ensure that products are created with a lower carbon footprint, which is currently a trend and a demand. [Vendors] may have to [undergo] sustainability assessments,” Puon added.
This can be a challenge as many vendors, which are small- to medium-sized enterprises (SMEs), lack the resources to decarbonise their processes to maintain operations with larger companies.
Despite comprising more than 90 per cent of all businesses in Malaysia and contributing almost 40 per cent to the nation’s economy, SMEs often lack access to the same capital that multinational corporations have to decarbonise.
Instead of waiting for SMEs to slowly catch up, organisations should consider taking the lead in communicating and sharing best practices with their vendors, he adds.
“For instance, companies could establish workshops or collaborative platforms to train supply chain partners on sustainability measures and address knowledge gaps,” Puon noted.
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A radical change is needed, starting with the transition to renewable energy. This requires significantly increasing investment in solar and other renewable resources.
Wilson Puon, head of integrated clean energy solutions, Ditrolic Energy
Increased demand
Consumer demand for companies that prioritise sustainability is also pushing businesses to meet more stringent requirements.
For example, one Malaysia-based retail shopping mall, The Exchange TRX, notes that having sustainability-focused features is proving to be a “key differentiator” among tenants and patrons.
“Tenants today seek more than just prime location and aesthetic appeal; they value spaces that align with their corporate sustainability commitments. Consumers are [also] more environmentally conscious and increasingly choose destinations that align with their values,” a spokesperson from The Exchange TRX told Eco-Business.
The mall was built with a handful of features to reduce waste, the spokesperson added, such as water efficiency and energy saving features and sustainable materials.
Tools to help
There are, however, still numerous challenges that companies in Malaysia face in fully decarbonising their operations and achieving net zero amid increasing regulation and consumer expectations.
With many companies unsure of where to start or how to measure their carbon emissions while increasing their reliance on renewable forms of energy, businesses should make use of tools to help, Puon says.
One such platform is EnerLoop by Ditrolic Energy, which is a software and hardware platform designed to help businesses manage energy usage and emissions. It includes features such as solar power integration; renewable energy purchasing options, energy management systems, and carbon tracking capabilities, to name a few.
The platform, Puon explains, can be viewed as a tool to first introduce companies to renewable energy solutions – be they generated on-site or off-site. The tool can also formulate a short- and long-term decarbonisation roadmap.
For instance, one of the platform’s functions, called CarbonTrack, can be integrated within existing energy systems to provide companies with a view of their energy usage and emissions. The tool can then provide reports and energy efficiency recommendations.
“[CarbonTrack] is a carbon management system that involves downstream operations, helping clients achieve their key performance indicators. This software enables us to build a roadmap for customers, outlining how they can meet their goals. Following this, we provide solutions such as solar PV systems and renewable energy certificates (RECs),” Puon said.
CarbonTrack is one function within integrated energy company Ditrolic Energy’s EnerLoop tool, allowing businesses to track and manage their carbon emissions. Image: Ditrolic Energy
Part of the solution
Another function of EnerLoop, called EnerRec, allows companies to purchase RECs.
Ditrolic Energy, however, is also cognisant of the potential greenwashing risks that are associated with providing RECs to help other companies offset their emissions, notes Puon.
He emphasises that the RECs provided are the result of the renewable energy that is directly “generated” from Ditrolic Energy and must also be certified by a certification system called International Renewable Energy Certificate or I-REC, which is regulated by The International Tracking Standard Foundation, a non-profit.
“Before we can sell RECs to our clients, we must ensure the reliability and authenticity of the source. We register our REC generation with I-REC, where we first submit extensive documentation and proof,” explained Puon.
I-REC, he adds, reviews their documentation, which includes location details of the solar plant generating the clean energy, supporting invoices, and ownership proofs of the plant.
The company must also demonstrate a proper system for monitoring monthly energy generation and its accuracy.
“All our customers who purchase these RECs receive an I-REC certificate, which is an internationally recognised certificate. This process also helps to prevent greenwashing,” added Puon.
The Exchange TRX reported that it offset 8,800 tonnes of carbon from its electricity consumption through RECs acquired from Ditrolic Energy in November 2024.
The Exchange TRX spokesperson noted that while RECs are a “valuable tool” for supporting clean energy, businesses must integrate them into a broader sustainability strategy rather than use them to justify business-as-usual energy consumption.
“RECs are just one part of our sustainability efforts. We continue to focus on reducing overall energy consumption through efficient building design, smart energy systems, and optimised operational practices,” The Exchange TRX representative told Eco-Business, in a response to a question on the responsible use of RECs.
“Lowering energy demand remains the most effective long-term solution, and RECs ‘complement’ these initiatives rather than replace them.”
Diversified energy sources
While it may be several years before Malaysia tips the balance away from fossil fuels in favour of renewable energy, companies that start now will be in a better position when the time comes, Puon notes.
“In my opinion, a radical change is needed, starting with the transition to renewable energy. This requires significantly increasing investment in solar and other renewable resources,” he said.
While solar power should be harnessed “more aggressively” since the country experiences a tropical climate, year-round hot weather and abundant sunshine, Malaysia also needs to modernise its power grid and expand its use of other solutions if it genuinely seeks to meet its 2050 net zero goals, concludes Puon.
“Apart from solar, we need to explore other renewables such as biomass, geothermal, and hydro power, for example. We have to diversify our renewable energy sources,” he added.
