In 2022, Malaysia emitted 250 million tonnes of CO2e which represents 0.69% share of the global GHG emissions of 36,000 million tonnes of CO2e, said RHB Research in the recent Regional Thematic Report.
At COP27, former US Vice President Al Gore launched a database that provides emissions data, based on satellites measuring real emissions. It shows 56 million tonnes of CO2e in 2021, representing emissions from 79,800 physical assets.
In its 2022 annual report, Bank Negara Malaysia said that Malaysia targets to become a net zero greenhouse gas emissions nation as early as 2050 and carbon accounting is a critical enabler for transition.
Measuring the amount of carbon dioxide, and its equivalent, emitted by businesses from direct and indirect activities allows for credible monitoring, reporting and verification of greenhouse gas emissions.
The report provides the paths to implement a national CO2 accounting framework. For financial institutions, mandatory disclosure based on the Task Force On Climate-related Financial Disclosure will commence from 2024 onwards.
Broader mandates that also include other entities to measure and disclose their carbon emissions would complement these efforts in ensuring that commitments are turned into action.
“Companies in Malaysia are increasingly adopting net zero targets. We make the case that net zero targets make sense more at a country level, instead of a corporate level. Nevertheless it will be worth monitoring the evolution of a company’s Scope 1, 2, and 3 emissions over time which is exactly what we intend to do,” said RHB.
As an example, from its press release on 9 Mar, Pos Malaysia targets net zero carbon emissions by 2050. For those companies that did not yet issue such specific targets, the fact that a company which operates in Malaysia, it is implied such a company also has to conform to carbon neutrality by or before 2050.
However, there is a significant variation among these targets, because they can:
i. Cover different scopes of emissions or include some or all of the value chain and different types of emissions.
ii. Focus on differing or multiple time frames.
iii. Rely on offsets.
Emission trajectories can be used to assess the required reductions to reach a stated goal and compare the pathways implied by corporate commitments, policies, or individual assets.
In a theoretical model where a company’s emissions would have a linear decrease from 2020 to 2050, it means the particular company would have to reduce its emissions by 3.33% every year.
While for the first years a company could purchase carbon offsets for the quantity of CO2 to be reduced, eventually it would have to invest in a technology which would reduce emissions significantly. These are significant costs to be incurred in the future.
A 2023 report by the International Renewable Energy Agency (IRENA) on Malaysia’s energy transition outlook estimates that investments totalling up to USD415 billion will be required until 2050 in IRENA’s 1.5-Scenario.
Much of the additional investment, up to 40%, will be needed to build renewable power capacity, 33% will be in grids and flexibility, and the remainder will be distributed across end-use sectors to increase energy efficiency, scale up EV charging infrastructure and support green hydrogen.
