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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 2019, a total of 350 projects in renewable energy with total investments of RM3.78 billion were approved incentives. Out of the total, 88.5 per cent was contributed by domestic investments and 11.5 per cent by foreign investments. Solar energy projects made up the bulk with 330 projects amounting to RM2.10 billion comprising of 314 solar self-consumption projects worth RM413.35 million and 16 large scale solar projects valued at RM1.69 billion. In that period, six mini-hydro projects worth RM1.52 billion were also approved, while the remaining approved projects were made up of 13 biogas projects worth RM149.33 million, and one biomass project worth RM6.58 million. These projects are expected to create 761 employment opportunities in this sub-sector.

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 2019, a total of 75 projects in energy efficiency/energy conservation with total investments of RM536.44 million were approved incentives. Investments were mainly from domestic sources i.e. RM168.86 million meanwhile RM367.58 million were from foreign sources. These investments are expected to provide 148 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 2019

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Last Updated : Tuesday 7th July 2020