Malaysia’s Pursuit Of Energy Transition In The Transportation Sector

By: Eur Ing Hong Wai Onn

As one of the world’s top 25 emitters, alongside G7 nations, the EU, and China, Malaysia’s commitment to achieving net-zero emissions by 2050 reflects its dedication to combating climate change and transitioning to cleaner energy sources. The government has launched various initiatives to pave the way for a sustainable future, including the Twelfth Malaysia Plan (2021-2025) and the National Energy Policy (2022-2040), with the National Energy Transition Roadmap guiding Malaysia forward in this transformative journey.

In the midst of these endeavours, the transportation sector, which ranks as the second-largest consumer of energy, emerges as a focal point, acknowledged for its crucial contribution to achieving net-zero emissions. Electric vehicles (EVs) emerge as a promising solution to curb carbon emissions within this sector. While the government’s efforts to promote EV adoption are commendable, addressing pressing concerns and exploring complementary solution are essential to ensure the success of this transition.

Challenges on the Road to EV Adoption

Firstly, while EVs are frequently commended for their environmental advantages, notably in significantly reducing carbon emissions when powered by renewable electricity sources compared to traditional petrol or diesel vehicles, it’s crucial to recognize that Malaysia’s energy generation does not solely depend on renewable sources. Data from the International Energy Agency, an autonomous intergovernmental organization based in Paris, reveals that approximately 80% of the total electricity generation in 2021 came from a combination of coal and natural gas. Despite plans by the Malaysian government to increase renewable energy production, renewables currently contribute less than one-fifth of electricity generation in Malaysia. Therefore, the environmental advantages of EVs may be limited by the dependence on non-renewable energy sources for electricity generation.

Additionally, the affordability factor remains a significant hurdle to widespread EV adoption, especially among lower-income households. While the government’s incentives to promote EV adoption in Malaysia, such as tax exemptions on road tax and import duties, are commendable, the high initial costs of EVs present challenges for many Malaysians aspiring to transition to cleaner transportation options. Despite the availability of EVs from some Asian countries, with prices starting as low as RM 120,000, they remain out of reach for many. This issue is particularly critical considering that more than half of monthly household incomes in the country are less than the mean of RM 8,479 in 2022.

Furthermore, the insufficient presence of EV charging infrastructure, especially in rural regions, poses a significant barrier to adoption. Although the government has outlined plans, under the Low Carbon Mobility Blueprint (2021-2030), to establish more EV charging stations nationwide, addressing this issue will take time and effort. This challenge becomes particularly pronounced during festive seasons when urban residents return to their hometowns, often spanning 500 to 600 kilometers round trip, emphasizing the need for accessible charging facilities nationwide. While short-term solutions such as careful travel planning and ensuring EVs are fully charged before departure or installing additional chargers at homes in hometowns are feasible, they come with added mental stress and expenses.

Second-generation Bioethanol as a Complementary Solution

In light of these challenges, second-generation bioethanol presents itself as a feasible complementary solution to hasten Malaysia’s energy transition. Unlike EVs, which currently rely on non-renewable electricity sources, second-generation bioethanol is a renewable fuel derived from agricultural biomass. This alternative not only reduces greenhouse gas emissions by more than 80% compared to conventional gasoline but also offers a higher-octane number, providing enhanced blending properties for improved engine performance.

With its plentiful agricultural biomass resources, Malaysia is primed to leverage second-generation bioethanol production. For example, the palm oil industry alone generated approximately 16 million tonnes of dry weight biomass in 2022. If half of this biomass had been allocated for bioethanol production, it would have translated to around 10% of the Malaysia’s gasoline consumption in 2022. So, by leveraging the country’s abundant biomass resources and implementing supportive policies and incentives, Malaysia can fully tap into the potential of second-generation bioethanol as a clean and sustainable transportation fuel.

It’s reasonable to argue that second-generation bioethanol hasn’t received much attention in the past due to its relatively high production costs. However, with the government’s intention to progressively decrease petrol subsidies, second-generation bioethanol could become more competitive in terms of pricing compared to traditional fossil gasoline. Based on a study conducted by the author, the production cost of second-generation bioethanol is estimated to range from RM 2 to 4 per liter. While this is slightly higher than the current heavily subsidized gasoline price, it is anticipated to align with it once the subsidy is reduced, especially considering the economy of scale if we begin now.

It’s noteworthy that second-generation bioethanol is not a novel concept in the region. Mandate implemented in other country, such as the Philippines, has demonstrated success, with bioethanol blends set at 10%. This direction has not only decreased carbon emissions but also fostered economic growth and generated new employment opportunities in the agricultural and renewable energy sectors.

A Dual Strategy for the Future

In conclusion, it’s imperative to recognize that while the EV strategy can yield positive results in the short term, particularly with many EV manufacturers vying for market share, it’s equally vital to strike a balance between short-term gains and long-term benefits, especially concerning carbon emissions on the path to achieving net-zero emissions.

Second-generation bioethanol should not be viewed as redundant to EV efforts but rather as a complementary solution in Malaysia’s transition journey. Malaysia must adopt a dual strategy that incorporates both EVs and bioethanol to effectively address the nation’s energy needs. By adopting this twin approach, Malaysia can cater to the diverse needs of its population while expediting progress towards achieving net-zero emissions.

The author is a chartered engineer and chartered environmentalist, is a Fellow of the Institution of Chemical Engineers, the Royal Society of Chemistry, and the Malaysian Institute of Management. He is also the author of “A Chemical Engineer in the Palm Oil Milling Industry”

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