The upcoming Budget 2026 announcement, scheduled later today, should focus on accelerating Malaysia’s green and digital transformation through stronger policy continuity, targeted incentives and renewed public–private collaboration, Schneider Electric Malaysia Country President Eugene Quah said.
He said that as Malaysia deepens its transition toward a digital economy, businesses face persistent challenges such as high upfront investment costs, talent shortages and uneven access to financing, obstacles that risk slowing progress toward sustainability and competitiveness.
“Budget 2026 is an opportunity to sustain momentum in digital energy management by extending and enhancing existing green incentives. Without consistent policy support, Malaysia risks losing pace in its energy transition and industrial automation goals,” Quah said to BusinessToday.
As such, he urged the government to extend the Green Technology Financing Scheme beyond its 2025 expiry, renew the Energy Audit Conditional Grant and expand tax incentives such as the Green Investment Tax Allowance and Green Income Tax Exemption to help more companies invest in energy-efficient retrofits and low-carbon technologies.
Driving Sustainable Data Infrastructure
Meanwhile, as Malaysia positions itself as a regional data centre hub, Quah said sustainability must underpin growth in this high-energy sector. He proposed targeted incentives for data centres that adopt energy- and water-efficient designs, renewable energy sourcing and advanced cooling systems.
“Artificial intelligence (AI) and cloud growth will make data centres the backbone of Malaysia’s digital economy. To ensure this growth is sustainable, investment incentives must reward measurable environmental performance,” he said.
He cited collaborative innovation such as the Centre for Offshore Energy project — integrating offshore wind, solar and wave energy — as examples of how renewable power and storage solutions could be embedded into future data centre infrastructure.
On the other hand, Quah said AI adoption in energy management and automation remains uneven, especially among the small and medium enterprises hindered by budget and capability constraints.
“Targeted grants and tax deductions can help smaller firms overcome initial investment hurdles,” he said, adding that better promotion and accessibility of existing incentives would accelerate AI uptake and improve long-term operational sustainability.
Collaboration for Future-Ready Talent
Quah shared that partnership with local universities to strengthen links between academia and industry through joint training and research programmes are essential to equip Malaysia’s workforce with the skills needed for the digital and automation era.
“Building future-ready cities and industries requires connecting vision with expertise, policy with purpose. Sustainability will only succeed if government, academia and industry move in tandem,” he said.
Looking ahead, Quah said Budget 2026 must reinforce Malaysia’s position as a regional leader in sustainable digital transformation, where AI, energy efficiency and green infrastructure drive both economic growth and decarbonisation.
“The choices we make now will determine whether Malaysia leads in creating an inclusive, sustainable digital economy or risks falling behind,” he said.
