Creating a sustainable economy that places renewable and clean energy front and centre is the primary focus of governments in various countries — this is doubly so for businesses and those keen on shifting to reneable and green energy concepts. Malaysia is one of the few in Southeast Asia that is at the forefront as it reaffirms its hard push on this sustainable trend during the Budget 2024 reading.
The biggest indicator is the various financing, investment, and fulfilling the long-term goals of fully adopting green-based and renewable energy best practices; becoming truly carbon-neutral; amd being aligned to the very global-focused environmental, sustainability, and governance (ESG) trends.
During the recent tabling of Budget 2024, Malaysia Prime Minister Anwar Ibrahim revealed many allocations that aspires to implement and achieve Malaysia’s long-term environment-focused and sustainability goals.
Of the various allocations that have been designated for this growth trend, the National Energy Transition Roadmap (NETR) — the largest and most critical green-related initiative — had received RM2 billion (~USD) in support financing. The other large allocation is part of RM20 billion (~USD) for guaranteed loans that will support small- and medium-sized enterprises (SMEs) that are involved with the green economy.
It is clear that the government of the day is ready to invest heavily on sustainable and eco-friendly efforts. Beyond the NETR, other allocations from Budget 2024 include:
- Financial institutions to allocate RM200 billion in loans to support industries with their push for reduced carbon emissions
- Providing RM20 billion in guaranteed loans for SMEs who are involved with the green economy, technology, and halal sectors
- Offering a RM2,400 cash rebate to those with less than RM120,000/annum income to get an electric-powered motorcycle
- Extending RM2,500 (~USD) tax exemption for electric vehicles (EVs)
- Installing solar panels on all federal government buildings with support from Tenaga Nasional Berhad (TNB) and GENTARI
- Securing a RM170 million investment from TNB, GENTARI, and Tesla Malaysia to deploy 180 EV charging stations across the country
2024 will be the year Malaysia makes that big push to become a green economy driver for the region. While there is a lot more ground to cover, this is a good first step with. Some within the tech and research quarters have already welcomed this move.
“We welcome the focus on sustainability in Budget 2024, that establishes measures aligned with NETR targets, such as funding to facilitate energy transition, enhancements to the Corporate Green Power Programme and incentives for companies that invest in Measurement, Reporting and Verification (MRV) related to development of carbon projects. As an organization that is committed to be carbon negative by 2030 and remove all of our historical emissions by 2050, we are aligned with efforts to drive sustainable practices and encourage concrete steps toward achieving national sustainability targets,” wrote K. Raman, Managing Director, Microsoft Malaysia.
For Jagdev Singh, Tax Leader, PwC Malaysia, he lauded how the ESG agenda remains a core focus for Budget 2024. The proposal to extend the application for Green Technology incentives until December 31 2026, including new scopes of research into that, providing tax relief and financing support for EVs, and introducing tax deductions for EV-rentals — all of them are highly welcomed as they are necessary to ensure Malaysia remains on the path towards becoming net-zero before 2050.
While Budget 2024 places maximum emphasis on ESG, green technology, and renewable energy, more can be done and many are anticipating updates and new programmes to come online once the NETR fully rolls out.