Green Technology

In line with Malaysia’s aim to become an inclusive and sustainable advanced nation by 2020, Green Technology (GT) has been identified as one of the drivers of the future economy for the nation that would contribute to the overall Green Growth and Sustainable Development. Under the National Green Technology Policy, the cross-sectoral GT focuses on four sectors namely energy, building, waste management and transportation.

Renewable Energy

Malaysia is emphasizing greater importance for Renewable Energy (RE) generation through specifically formulated policies and initiatives to spur the growth of the sector as a major step towards green economy. Other than the Feed-in-Tariff (FiT) mechanism, the Net Energy Metering (NEM) and Large Scale Solar (LSS) Photovoltaic plant schemes were introduced in 2016 to boost RE generation. NEM benefits users in terms of savings in electricity bill through lower electricity usage and energy credit from solar power generation while LSS allows developers to produce renewable energy in larger capacities.

In 2018, a total of 175 projects in renewable energy with total investments of RM3.0 billion were approved incentives. Out of the total, RM2.848 billion (95.4%) were from domestic investments and RM138 million (4.6%) were from foreign investments. These projects are expected to create 547 employment opportunities in this sub-sector.

The approved investments include 161 projects (RM2.5 billion) that will generate energy from solar power, 10 projects (RM182.3 million) from biogas, 3 projects (RM320.7 million) from mini-hydro and 1 project (RM24 million) from biomass as the sources of energy generation.

Energy Efficiency/Energy Conservation

As price of energy steadily increases over the years, there is a need to adopt energy efficiency measures to ensure productive use of energy and minimize waste. The use and adoption of energy efficiency systems and technology is encouraged through introduction of incentives and import duty exemptions on qualified machines and components. Consecutively, energy efficiency activities also open up opportunities for energy service companies (ESCOs) to provide energy efficiency services to potential clients.

In 2018, a total of 53 projects in energy efficiency/energy conservation with total investments of RM139.1 million were approved incentives. Investments were mainly from domestic sources i.e. RM125.6 million meanwhile RM13.5 million were from foreign sources. These investments are expected to provide 111 employment opportunities in the sub-sector.

Green Technology Incentive

Under the provision of Budget 2014, tax incentives for Green Technology in the form of Green Investment Tax Allowance (ITA) for the purchase of green technology assets and Income Tax Exemption (ITE) on the use of green technology services and system were introduced to further strengthen the development of green technology.

Application for incentive is to be submitted to MIDA for green technology projects and services, and to Malaysian Green Technology Corporation (MGTC) for purchase of green technology assets as listed in MyHijau Directory, by 31 December 2020. Projects which qualify for this incentive are renewable energy; energy efficiency; integrated waste management and green building / green data centre. In addition, eligible services activities include system integration of renewable energy; energy services; services related to green building / green data centre; green certification of products, equipment & building; and green township.

Source:MIDA Investment Performance Report 2018


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Last Updated : Tuesday 7th April 2020