A journal assignment for the subject 'Sustainable Development Policy', Master of Public Policy, University Malaya

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MASTER OF PUBLIC POLICY
INTERNATIONAL INSTITUTE OF
PUBLIC POLICY AND MANAGEMENT (INPUMA)
UNIVERSITY OF MALAYA
KUALA LUMPUR
ASSIGNMENT 2
PREPARED BY:
MOHD HASIM UJANG (ZGA110011)
Submitted to: Dr. Sumiyani Yusoff
ZIGP 6308: SUSTAINABLE DEVELOPMENT POLICY
“Analysis of National Strategies for Sustainable Development: Challenges,
Approaches and Innovation”
Date: 10/6/2013

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Introduction – What is Sustainable Development?
The UN’s Report of the World Commission on Environment and Development defines
Sustainable Development as a mode of human development that aims to use resources to
satisfy the needs of current generation without compromising the needs for future
generations1
. In other words, the concept seeks to achieve a balanced development whereby
the society can progress at an acceptable pace without causing severe resource depletion and
environmental degradation.
The concept’s history can be traced back to year 1798 when Thomas Robert Malthus
published his work entitled An Essay on the Principle of Population whereby he asserted
that the global population will face widespread starvation and severe environmental
degradation if there is no action taken to check the exponential nature of population growth
which contributes much to the problem of resource scarcity and strains the global food
production that only grows at an arithmetic pace2
. Since then, the concept of Sustainable
development has grown out of academic literature into a universally accepted principle that
guides future developments as shown by various international declarations and resolutions
that has been ratified by many countries.
Objectives
This paper aims to present a short study on the challenges of sustainable developments as
well as the past and current initiatives and commitments that Malaysia has undertaken to
achieve sustainable development. The paper seeks to explain the challenges encountered, the
approaches that were adopted and the innovations that were produced by/within the country
to achieve Sustainable Development. However this paper does not attempt to provide any
assessment on the success or failure of Malaysia’s national strategies for Sustainable

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Development which would require a higher level of analysis and a more complete research
project.
Background – Why Malaysia must work to achieve Sustainable Development
Malaysia is a party to numerous international environmental agreements and treaties that
include among others matters relating to Biodiversity, Climate Change, Climate Change-
Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea,
Marine Life Conservation, Ozone Layer Protection, Ship Pollution, Tropical Timber 83,
Tropical Timber 94 and Wetlands3
. Most importantly, Malaysia must commit to the
declarations stated in Agenda 21 of the UN Conference on Environment and Development
1992. The Agenda 21 emphasizes a balanced development that equally takes into account
social, economic and environmental aspects. As such Malaysia is not exempted from
initiating and stepping up efforts towards Sustainable Development in order to comply with
the various guidelines and criteria that are set out in these international instruments.
Furthermore, Malaysian leaders have realized earlier that preservation of biodiversity and
natural resources are very critical for sustainability and the survival of Malaysian society for
generations to come. For example, other than being a party to the various international
environmental agreements, Malaysia has also endorsed the proposal to set up the World
Environment Organization (WEO). Hence, the government feels obliged to undertake
necessary measures to achieve sustainable developments although critics might argue that
such government efforts are still not enough or worse, a mere lip service.
Furthermore, a number of national and state-based NGO’s have been championing
environmental issues in Malaysia and they have raised quite a number of valid issues and
arguments which the government felt compelled to address. Cases in point were the
resistance against Pahang-located Lynas Advanced Material Plan (LAMP) Project by anti-

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Lynas group plus similar resistances against a coal-based power plant project at Darvel Bay,
Lahad Datu Sabah by Sabah Environmental Protection Association (SEPA) and a property
development project at Bukit Kiara Kuala Lumpur which has been objected by concerned
citizens’ group. Such movements and issues have been very noteworthy in creating public
awareness regarding various environmental issues and the government are obliged to take
these issues into account and honour its commitment towards Sustainable Development.
Malaysia – Overall Strategies for Sustainable Development
The International Institute for Sustainable Development (IISD) produced a report4
in 2004
which presented case studies of national strategies for Sustainable Development conducted in
19 countries in Europe, South America, North America, Asia and African Continent.
Although Malaysia was not covered in the report, the four-part strategic management model
that was used to assess national strategies for Sustainable Development is particularly useful
for the purpose of this paper. The strategic management model is illustrated below:

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Based on the strategic management model illustrated above, the Malaysian national strategies
for Sustainable Development can be explained in four parts: leadership & planning,
implementation & challenges, learning, monitoring & adaptation, and conclusion.
Leadership and Planning
Leadership tiers and institutional setups
In Malaysia, the leadership institutions to devise and implement national strategies for
sustainable development can be divided into 3 tiers based on the chain of command and the
flow of instructions, reports and feedbacks. The first tier is the Cabinet, headed by the Prime
Minister who discuss, deliberate and approve major economic and social policies. The second
tier institution is the bureaucracy (civil service) that comprised of government ministries and
agencies whose roles and functions relates to the different aspects of sustainable
developments. The bureaucracy routinely advises the Cabinet via policy papers and various
drafts of master plans and legal acts, however a sizable chunk of policy formulation and
initiatives came out of a top-down directives or instructions given by the Cabinet to the
bureaucracy, such as during the Prime Ministership of Tun Dr. Mahathir Mohamad. Also
included in the second tier are the military, the police and the legal entities that administers
justice in the country (the courts and the Attorney General’s Chambers) because they are part
of the civil service and the appointment of key personnel in these institutions are largely
decided by the Prime Minister who heads the Cabinet.
The third tier leadership institutions in the formulation and execution of sustainable
development strategies are the state governments and industry leaders who helm major
corporations that exert huge influence in various economic sectors such as energy,
telecommunication, commodity plantation, transport, hospitality, agriculture and food
production. Except for the state governments, the third tier leadership institutions are not

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mandated to comply strictly to the guidelines and directives from the first and second tier
institutions, except where there are compelling laws and regulations that specify otherwise.
All three tiers of leadership institutions for sustainable development in Malaysia are bound by
the Constitution, and its consequent laws, which are deliberated, reviewed, amended and
approved by the Parliament.
The role of leaderships in incorporating SD as an agenda in national development plans
Judging from the initiatives and strategies carried out to achieve sustainable development
thus far, it can be arguably stated that the country’s leadership has been able to provide policy
directions and visions towards the achievement of sustainable development in Malaysia as
can be seen from the numerous national development plans launched since the New
Economic Policy (1970 – 1990) and Second Malaysia Plan (1971-1975). For example, the
New Economic Policy and Second Malaysia Plan that was launched by the second Prime
Minister Tun Abdul Razak emphasized the necessity to address the current (prevailing) needs
of Malaysian society at that time by initiating measures to eradicate poverty, restructure the
society to eliminate the identification of race based on vocation/economic function and to
bring the interracial economic gap closer by increasing the bumiputera equity in the
economy. Both policies also recognized the necessity to meet the needs of future generation
by stimulating and maintaining robust economic growth plus fostering and maintaining
national unity through the introduction of a revised education curriculum and redistribution of
economic resources via affirmative actions.
In addition, the National Petroleum Development Act and National Petroleum Policy (1975)5
which was also administered during this time aimed ‘to ensure optimal use of petroleum
resources and regulation of ownership, management and operation, and economic, social, and
environmental safeguards in the exploitation of petroleum due to fast growing petroleum

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industry in Malaysia’ (Dr. Tan Ching Sin, Dr. Leong Yow Peng, Suhaida Mohd Sood, 2011).
Three prominent leaders from different tiers contributed to the drafting, finalizing and tabling
of these laws and policies for approval in the Parliament and the Cabinet; the then Prime
Minister, Tun Abdul Razak Hussein, the then Chairman and CEO of Petroliam Nasional
Berhad (Petronas) Tengku Razaleigh Hamzah and the then Solicitor General of Malaysia,
Tun Mohd Salleh Abas.
The third Prime Minister, Tun Hussein Onn consolidated the efforts to foster national unity
by establishing the ‘community watch’ (Rukun Tetangga), a program that aims to enhance
communal interactions through harmonious efforts to prevent crimes and vandalism within
local communities. Whereas the 4th
Prime Minister, Tun Dr. Mahathir Mohamad launched
Vision 2020 that was meant to provide direction for Malaysia to become a developed nation
by year 2020. Under this policy, a progressive society with equitable economic distribution
and united in diversity with high inter-cultural tolerance have been envisaged. Unfortunately,
there was no mention about environmental emphasis in this policy. Ever since Vision was
launched in 1991, the government has been seen to be giving much more focus on economic
and social development aspects with considerably little focus given on environmental aspects.
However, the existing frameworks to safeguard environmental aspects alongside national
development remained in force such as the Environmental Quality Act 1974 and the various
states’ laws that require Environmental Impact Assessment (EIA) to be carried out before any
development project is deemed fit for execution. The government’s commitment towards
sustainable development was also amplified in February 2008 when the Sarawak Corridor of
Renewable Energy (SCORE) was launched. SCORE is an ambitious project to develop an
industrial cluster with intensive usage of renewable energy sourced from hydropower. The
project was launched by the 5th
Prime Minister, Tun Abdullah Ahmad Badawi and the current
Prime Minister Datuk Seri Mohd Najib Tun Abdul Razak has continued to attract foreign

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investments to expand the project further in order to benefit the economic development and
renewable energy sector.
Besides this project, the government also adopted another form of sustainable development,
the Sustainable Forest Management (SFM) or simply ‘sustainable forestry’. SFM is
essentially the management of forests according to the principles of sustainable development
to fulfil current needs and demands without compromising the needs of future generation. It
involves conservation of forest reserves alongside selective extraction of timbers to minimize
damage on the forest then followed by replanting/rehabilitation efforts to replenish the felled
trees. The cycle of logging and replanting is then repeated all over again at a sustainable pace
that ensures the continuity of timber resources over generations. In Malaysia, the SFM
initiative has been implemented in huge scales in the states of Sabah, Sarawak, Pahang,
Kelantan, Terengganu, Johor, Selangor, Kedah and Perak6
.
Implementation & Challenges
To facilitate discussion in this section, the paper is focusing on two main initiatives under
national strategy for sustainable development, which are the Sustainable Forestry
Management (SFM) with sustainable logging practices and Energy Policy.
Sustainable Forestry Management with sustainable logging practices7,8
Malaysia is committed towards SFM and sustainable logging practices in order to fulfil the
objective set out by the International Tropical Timber Organization (ITTO) which is ‘to
implement a strategy for achieving exports of tropical timber and timber products from
sustainably managed sources8
. As of 2007, a total of 19.42 million hectares of Malaysian land
are covered with rainforests with significant portions located in Sarawak (9.24 million
hectares), Sabah (4.3 million hectares) and entire Peninsular (5.88 million hectares). Out of

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these forest areas, 74% (14.29 million hectares) have been gazetted as Permanent Reserve
Forests (PRFs) under the National Forestry Act 1984 plus various states enactments and
ordinances. Another 1.83 million hectares outside of these PRFs has been designated as
National Parks and Wildlife Sanctuaries under various legislations. These parks and
sanctuaries together with the PRFs are forests that are to be maintained in perpetuity by law.
Hence, Malaysia is committed to preserve its vast forest reserves over generations which
stood at 59% of its total land area.
Picture 1: forest coverages in Peninsular Malaysia in description. Source: Wan Razali W.M.
(2012).

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Picture 2: forest coverage in Sabah shown by classification. Source: Wan Razali W.M.
(2012).
Picture 3: forest coverage in Sarawak shown by classification. Source: Wan Razali W.M.
(2012).

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Nevertheless, logging activities are still permitted within the gazetted forest reserves (other
than National Parks and Sanctuaries) via licensing and regulations. A total 78% of the PRFs
(11.18 million hectares) have been designated as production forests which can be
commercially harvested for timbers on a predetermined rotational cycle. The remaining 22%
of the PRFs (3.11 million hectares) has been designated as protection forests that cannot be
harvested. In 2006, the International Food and Agricultural Organization (FAO) estimated the
value Malaysia’s timber export to worth USD 3.53 billions, about 4% of GDP at that time.
However the level of national timber production has been declining due to the successful
implementation of SFM.
Picture 4: picture diagram showing how controlled logging by rotational cycle is carried out
in natural forest reserves. Source: Wan Razali W.M. (2012).
The National Forestry Council (NFC) that was established in 1972 is mainly responsible for
common approach in forestry management. The NFC has been at the helm of policy
harmonization between federal and state governments to ensure the continuity of SFM.

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The NFC is chaired by the Deputy Prime Minister and its membership comprises the Chief
Ministers of the 13 states, along with representation by the heads of all forestry departments
in Peninsular Malaysia, Sabah and Sarawak as well as relevant Federal Ministers responsible
for Natural Resources and the Environment, Finance, Trade, Agriculture and Agro-based
Industries, Plantation industries and Commodities, Science, Technology and Innovations.
In 1978, the NFC introduced the National Forestry Policy (NFP) with two main objectives:
a. To conserve and manage the nation’s forests based on the principles of sustainable
management.
b. To protect the environment, to conserve biological diversity, genetic resources and to
enhance research and education
The NFP was revised in 1992 to address the requirements of SFM in greater depths to include
pertinent matters such as conservation of biological diversity, sustainability and recognition
of the role of local communities in forest development. The revised provisions of NFP
reflected Malaysia’s adherence to the commitments of the United Nations Conference on
Environment and Development (UNCED) on SFM including:
a. Conservation for biological diversity. This commitment has been made through
various gazetting and protection of forests and marine parks that has been identified
as very rich in bio-diversity. Malaysia has no less than 44 conservation parks and
wildlife reserves that include the famous Danum Valley Conservation Area, Maliau
Basin Conservation Area, Krau Wildlife Reserve, Tun Sakaran Marine Park, the
strategic Coral Triangle at Darvel Bay, and many others.

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b. International technical collaboration aimed at fostering closer international co-
operation in the quest to achieve SFM. This commitment is met through continuous
cooperation between international organizations such as World Wildlife Federation
(WWF)9
and UN Development Program (UNDP).
c. The involvement of local communities, especially those living near forest fringes in
agro-forestry through the planting of forest fruit trees to conserve forest resources.
This commitment is fulfilled through the engagement of Orang Asli (Aborigines)
community in SFM in Peninsular Malaysia by the Orang Asli Development
Department (JAKOA) and the engagement of local communities in East Malaysia
such as Iban, Dayak and Orang Sungai via forestry departments of Sabah and
Sarawak.
d. The development of additional forest recreation facilities for eco-tourism. This
commitment is fulfilled by the creation of various national and state parks that are
open for tourism and bio-diversity related researches such as the Mount Kinabalu
Park and Mulu National Park.
e. The establishment of forest plantations, including high-quality timber plantations,
with the active participation of the private sector. This commitment is met with forest
plantation efforts that have been carried out by various corporations and state-owned
companies such as Malaysian Timber Corporation (MTC), Sarawak Timber Industry
Development Corporation (STID) and Sabah Softwood Berhad. High quality timber
plantations have been planted in several locations throughout Malaysia and as of
2009, a total of 310,000 hectares of plantation forests have been established10
. More
recent reports further indicated that Sarawak alone has created a total of 262,686

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hectares of plantation forests out of 1.3 million hectares of land that have been
designated for such purpose.
To further realize the objectives of SFM under ITTO, Malaysia employed two main strategies
for timber production that is able to cater for current socio-economic needs and
simultaneously preserve timber resources for future generation. The two main strategies are
controlled logging from natural forests and harvested logging from mature plantation forests.
Under the Third Industrial Master Plan and National Timber Policy that government
introduced in 2009, the timber-based industry including exports of timber-based products
(sawn timber, furniture and panel products) is set to grow at 6.4% annually to achieve total
export earning of RM53 billion by year 2020.
The increasing production shortfall from natural forests needs to be addressed via plantation
forests to keep track on this target. Thus, the government launched aggressive forest
plantation efforts at a rate of 25,000 hectares per annum to increase production of logs from
plantation forest from 3.3 million cubic metres in 2010 to 16.7 million cubic metres by 2020,
an increase of 400% over 10 years (The Star, 18th
October 2011)10
. Furthermore, based on
reports from MTC, developing vast areas of well-managed forest plantations for harvesting is
financially more attractive than just implementing SFM per se without forest plantation
efforts. This is because under SFM, logging in natural forests is strictly regulated and only
specific numbers and sizes of trees can be harvested, which usually comes to 7-12 trees per
hectare only (see picture 4).
Moreover, a 25 to 30 years gap is required to allow sufficient regeneration of natural forests
before the next round of harvesting is allowed. The government also has to limit the volume
of timber that can be extracted annually and this severely constrains the growth of timber
industry against the targets set out under the National Timber Policy and Third Industrial
Master Plan. On the other hand, trees in well-managed plantation forests grow much faster

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and give higher yields compared to natural forests due to selective breeding efforts. Thus the
“return of investment” period is considerably reduced down to between 7 – 12 years only as
opposed to 25 – 30 years regeneration for natural forests. This makes forest plantations a
more productive option as opposed to logging in natural forests.
With respect to challenges, there have been concerns that the forest plantation efforts have
been increasingly carried out in gazetted PRFs in a manner that totally replaces the rich bio-
diversity natural forests with low bio-diversity ‘farmed’ forests. Another concern is regarding
illegal logging activities and timber smuggling across borders that threaten to undermine the
efforts of SFM. In this respect, the enforcement, forestry and timber authorities have been
working hard to curb log smuggling activities and to find suitable lands for forest replanting
not within the gazetted PRFs. Malaysia also enforced strict logging practices whereby
production forests are given various certifications under local and international bodies such as
Malaysian Timber Certification Council (MTCC) and Program for Endorsement of Forest
Certification (PEFC). Under these certification programs, trees that are meant to be logged
are tagged and listed in inventories, making them easily identifiable and be traced back to
their original stumps even after the logs have been cut off and transported for export.
Another challenge is the occasional negative portrayal of Malaysian forestry management
whereby the authorities have been allegedly too lax to an extent that rampant deforestation is
happening beyond control. This allegation has been taken seriously by the government which
then responded by stepping up forest monitoring efforts via remote sensing technology and
satellite imaging11,12
. Furthermore, despite such criticism, Malaysia was ranked at number 38
out of 146 countries in Environmental Sustainability Index Study in 2005 by Yale University,
USA. In addition, a follow-up study in 2006 ranked Malaysia at ninth among 133 countries in
terms of efforts taken to reduce environmental stress on human health and protecting

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ecosystem vitality. These rankings demostrate the relative success of Malaysia’s
environmental management practices that includes SFM.
Energy Policy and sustainable energy management via energy efficiency efforts and
renewable energy
Although modern energy used has been introduced in Malaysia since 1895 – 190013
, a truly
cohesive and centralized energy policy for Malaysian did not begin until 1975 when the
government introduced the National Petroleum Policy. This was then followed by a series of
energy-related policies and acts, each with specific objectives as shown in the following
table:
Table 1: energy-related policies and acts in Malaysia
Policy/Act Key Objectives
National Petroleum
Policy (1975)
Introduced to ensure optimal use of petroleum resources and
regulation of ownership, management and operation, and economic,
social, and environmental safeguards in the exploitation of
petroleum due to fast growing petroleum industry in Malaysia.
National Energy
Policy
(1979)
Formulated with broad guidelines on long-term energy objectives
and strategies to ensure efficient, secure and environmentally
sustainable supplies of energy. It has Three main objectives:
Supply objective: To ensure the provision of adequate, secure, and
cost-effective energy supplies through developing indigenous
energy resources both non-renewable and renewable energy
resources using the least cost options and diversification of supply
sources both from within and outside the country.
Utilization objective: To promote the efficient utilization of
energy and to discourage wasteful and non-productive patterns of
energy consumption.
Environment objective: To minimize the negative impacts of
energy production, transportation, conversion, utilization and
consumption on the environment.
National Depletion
Policy (1980)
Introduced to safeguard against over exploitation of oil and gas
reserves. Thus, it is production control policy.

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Four Fuel
Diversification
Policy (1981)
Fuel diversification was designed to avoid over-dependence on oil
as main energy supply and aimed at placing increased emphasis on
gas, hydro and coal in the energy mix.
Electricity Supply Act
(1990)
Regulates the licensing of electricity generation, transmission and
distribution.
Gas Supply Act
(1993)
Regulates the licensing of the supply of gas to consumers through
pipelines, prices, the control of gas supply pipelines, installations
and appliances as well as safety.
Five Fuel
Diversification
Policy (2001)
Introduced in recognition of the potential of biomass, biogas,
municipal waste, solar and mini hydro as potential renewable
energy resources for electricity generation, SREP.
Energy Commission
Act
(2001)
The Energy Commission (or Suruhanjaya Tenaga) was established
to provide technical and performance regulation for the electricity
and piped gas supply industries, as the safety regulator for
electricity and piped gas and to advise the government on matters
relating to electricity and piped gas supply including energy
efficiency and renewable energy issues.
The Electricity Supply Act 1990 and Gas Supply Act 1993 have
both been amended to allow the Energy Commission to take over
these responsibilities.
National Biofuel
Policy
(2006)
Supports the five fuels diversification policy. Aimed at reducing
the country’s dependence on depleting fossil fuels.
Promoting the demand for palm oil. Five key thrusts: transport,
industry, technologies, export and cleaner environment. Highlights:
- Producing a biodiesel fuel blend of 5% processed palm oil with
95% petroleum diesel
- Encouraging the use of biofuel by giving incentives for providing
biodiesel pumps at fuelling stations.
- Establishing industry standard for biodiesel quality under
Standards and Industrial Research Institute of Malaysia (SIRIM).
- Setting up of a palm oil biodiesel plant.
The National Green
Technology Policy
(2009)
Intensification of Green Technology research and innovation
towards commercialization.
Strong promotion and public awareness of Green Technology.
Promotion of Green Building Index.
Promotion of application of RE in commercial and residential
buildings such as PV, rainwater harvesting and phasing out of
incandescent lights.

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National Policy on
Climate Change
(2009)
ST5-P2: Consolidate the energy policy incorporating management
practices that enhances renewable energy (RE) and energy
efficiency (EE).
KA19 - ST5 : Promote RE and EE for power generation through:
- Burden sharing between government and power producers;
- Establishment of EE and RE targets/standards;
- Inclusion of RE in generation mix by power producers; and
- Promotion of RE generation by small and independent developers
including local communities.
Source: Dr. Tan Ching Sin, Dr. Long Yow Peng, Suhaida Mohd Sood (2011)14
The government has initiated measures to pursue the objectives of sustainable energy
management by improving energy efficiency at 3 major segments of energy users (demand
side); the industry, commercial and residential sector.
The Malaysian Industrial Energy Efficiency Improvement Project (MIEEIP) from 2000-2007
that was funded by United Nation Development Program (UNDP), Global Environmental
Facility (GEF), private sector and the government has identified eight industrial sectors, with
strong potential to promote and improve energy efficiency. The 8 industrial sectors are
production of cement, ceramic, food, glass, iron & steel, pulp & paper, rubber and wood. The
aim of MIEEIP is to improve energy efficiency in Malaysia’s industrial sector by:
1. Identifying and reducing barriers to the usage of efficient energy for industrial purposes;
2. Stimulating the implementation of energy efficiency improvement projects in the
identified industries;
3. Promoting capacity and expertise building of local energy efficiency experts and
consultants; and

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4. Helping the authorities to develop a legal basis for improving energy efficiency. This can
be achieved by gradual legislation of laws and policies that compel the use of energy-
efficient machines and methods in the identified industries.
Eight (8) major programmes have been identified to help promote efficient use of energy in
the industrial sector as outline in Table 2.
Table 2: 8 programs under the MIEEIP
Program Description
1. Energy-use
Benchmarking
Programme
Creation of data collection and database system for energy
benchmarking set up. Benchmarking will help to educate industries
on energy use reporting and awareness for continuous improvement.
2. Energy Audits
Programme
Assessing current practice in energy auditing and to develop
standardized energy audit tools and procedures. By 2007, 54 factories
from various sub-sectors of industries have been audited.
3. Energy Rating
Programme
Dissemination of information to increase awareness and encourage
the use of energy efficient equipment through energy rating
programmes such as refrigerator, fan, etc.
4. Energy
efficiency
Promotion
Programme
Provision of user-friendly mechanisms to access and retrieve relevant
information. A collection of techniques and technologies applications
database on the successful energy efficiency applications in their
energy saving efforts are being documented and disseminated to
encourage participation through the Federation of Malaysian
Manufacturers (FMM).
Newsletter, conferences, workshops, seminars and website are to be
used as media for information dissemination.
5. Energy Service
Companies
(ESCOs)
Support
Programme
Educating ESCOs in identifying feasible projects, technical know-
how and increasing the number of full-time professional energy
auditors.
6. Energy
Technology
Several demonstrations projects with proven technologies can be
developed, implemented and monitored in selected sub-sectors of

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Demonstration
Programme
industry. Substantial benefits can be shown by demonstrating actual
application and not necessarily costly. These involves feasibility
studies of the system, the engineering design, installation, operation,
monitoring and evaluation of the energy technology demonstration
programmes.
7. Local Energy
Efficient
Equipment
Manufacturing
Support
Programme
Provision of training, technical assistance and financial incentives to
encourage and assist local equipment manufacturers to the selected
manufacturers production such as fans, blowers, boilers, motor
rewinding and industrial kilns.
8. Financial
Institutional
Participation
Programme
Demonstration of the technical and financial viability of energy
efficiency measures, energy saving potential and the corresponding
potential for GHG emissions reduction will help to train local
banking and financial institutions to fund energy efficiency projects
in industry.
Source: Dr. Tan Ching Sin, Dr. Long Yow Peng, Suhaida Mohd Sood (2011)14
Several guidelines have also been produced from the outcomes of the MIEEIP program. The
Energy Efficiency and Conservation Guidelines for Malaysian Industries Part 1: Electrical
Energy use Equipment has been produced to encourage industries to adopt energy efficiency
practices and improving their energy utilization for common equipments such as fans,
motors, pumps, chillers, transformers and air compressors. In addition, The Industrial Energy
Audit Guidelines shall be used as a reference material by energy consulting firms in their
audit services to industries. There are 54 energy audits in the eight industrial sub sectors
under MIEEIP.
Furthermore, The Efficient Management of Electrical Energy Regulations 2008 under the
Electricity Supply Act has been enforced whereby any installation which consumes more
than 3 million kWh of electricity over a period of six months will be required to engage an
electrical energy manager. The energy manager will be responsible for analyzing the total

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consumption of the electrical use, to advise on the development and implementation of
measures to ensure efficient energy management as well as to monitor the effectiveness of the
measures that has been already taken. The energy manager is also responsible to produce bi-
annual energy report to the building’s management which in turn must be submitted to the
National Energy Commission.
For commercial sector, the government of Malaysia has taken several efforts to promote
energy efficiency through the demonstration of Low Energy Office (LEO) building of the
Ministry of Energy, Green Technology and Water in 2004 and also the Green Energy Office
(GEO) of Malaysia Green Technology Corporation (MGTC) in 2008, formerly known as
Pusat Tenaga Nasional (PTM). The government hope that these demonstration buildings
would encourage private sector to design and construct low energy buildings throughout the
country. A green building rating tool called the Green Building Index (GBI) has been also
introduced for all types of buildings to further encourage the construction of green buildings.
The government is also planning to incorporate The Code of Practice on the Use of
Renewable Energy and Energy Efficiency in Non-Residential Buildings under MS 1525:2001
into the amendments to the Uniform Building By-Laws (UBBL) for all building in Malaysia.
Besides a handbook titled ‘Fiscal Incentives for Renewable Energy and Energy Efficiency in
Malaysia’ has been published by Government of Malaysia to offer attractive incentives to
encourage the generation of renewable energy and adoption of energy efficiency initiatives as
well as for the improvement of Power Quality (PQ) amongst energy producers and users in
Malaysia. The incentives offered include; Pioneer Status (PS), Investment Tax Allowance
(ITA), Duty Import Exemption and Sales Tax Exemption on machinery, equipment,
materials, spare parts and consumables plus Tax & Stamp Duty Exemption for GBI certified
property. These incentives are provided for industrial and commercial companies who are

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practicing measures to achieve energy efficiency in their premises. However this handbook
does not address fiscal incentives for the transport sector.
In terms of residential energy use, one particular incentive that the government has launched
in 2005 was the ‘star-energy label’ whereby domestic electrical appliances such as
refrigerators, air-conditioners, water heater and so on are given 1 to 5 star labels15
. A label of
5 stars denotes highest energy efficiency whereas a label of 1 star denotes lowest energy
efficiency (sample picture shown below). However until today, such implementation of
product labelling has not been made compulsory for all manufacturers and there are still huge
number of electrical appliances without energy efficiency rating being sold to consumers
nationwide. Thus, the usage of energy efficient appliances are still very low among
Malaysian residents with majority households still using unrated appliances in terms of
energy efficiency.
Figure 5: sample of star labelling for domestic electrical appliances issued by the Energy
Commission
In terms of renewable energy, the government has launched the Sarawak Corridor for
Renewable Energy (SCORE) to stimulate the usage of renewable energy in industries such as

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manufacturing and agriculture. In addition, Malaysian Cabinet has approved the National
Renewable Energy Policy & Action Plan on 2nd
April 2010. The policy states that it aims to
“enhance the utilization of indigenous renewable energy resources to contribute towards
national electricity supply security and sustainable socio-economic development”16
. Under
this policy, 5 types of indigenous renewable energies have been identified for development;
solar energy, energy generated from solid wastes, mini hydro, biogas and biomass16
.
To achieve the stated objectives under this policy, the Renewable Energy Act 2011 has been
legislated to provide for the establishment and implementation of a special tariff system that
primarily aims to catalyze the generation of renewable energy and to provide for related
regulatory matters. The Sustainable Energy Development Authority (SEDA) has been also
established to carry out the following functions17
:
1. To implement, monitor and review the Feed-in Tariff (FiT) system for Independent
Power Producers (IPP) that generate electricity from renewable energy sources. The
agency is tasked to progressively implement FiT system that encourage the growth of
renewable energy’s share of supply in the national power grid from under 6% in 2012 to
at least 73% by 2050.
2. To advise the responsible Minister (Minister of Energy, Green Technology and Water)
plus the government entities on all matters relating to sustainable energy.
3. To enforce sustainable energy laws including Renewable Energy Act 2011 and
recommend necessary reforms to such laws.

24. 24
4. To promote public participation and to improve public awareness on matters relating to
sustainable energy.
5. To carry out and assist researches, assessments, studies advisory services and innovation
activities relevant to the development of sustainable energy.
6. To publish and disseminate such information, statistics and reports to the government
entities, the public, investors and potential investors for the purpose of sustainable energy
development.
To date a total of 109.2 Megawatts of electricity in Malaysia are generated from renewable
energy, out of a total 24,275 Megawatts of total electricity generated18
. These supplies are
currently being generated by 18 renewable energy plants throughout Malaysia as listed in the
appendix. Although the share of renewable energy supply is still relatively very small, the
continuous effort to increase the share of renewable energy supply in the national grid is
currently on-going. Nevertheless, there are a few challenges that should be noted facing the
implementation of renewable energy in Malaysia:
1. The energy supply is still largely dominated by fossil fuels that consist of crude oil
(34.3%), natural gas (43.3%) and coal (20.3%). These fuels (except coal) are heavily
subsidized by the government, making them financially more attractive to be used by the
National Energy Board (TNB) and Independent Power Producers. At the same time,
government is still finding it very difficult to remove fuel subsidies because Malaysian
industry and consumers have been depending heavily on these subsidies for very long
time, making them unable to bear the cost of subsidy removal.

25. 25
2. The existing fossil-fuel based energy supply infrastructures must be phased out in stages
in order to accelerate the growth of renewable energy supplies. This transition
particularly poses tremendous technical, financial and industrial challenges for the
Malaysian energy industry which still relies heavily on conventional fossil-fuel power
generation infrastructure.
3. According to the report by Malaysian Energy Commission19
, Malaysia faces an
oversupply of electrical energy whereby as much as 45% of the electricity generated is
still unused, which has been referred to as ‘reserve margin’. The government has been
working hard to attract huge FDIs to increase national energy use, however so far the
efforts have met only marginal success. With such a huge energy surplus, it is very
difficult to encourage the growth of new independent energy suppliers, whether
renewable or otherwise. Thus, the challenge to increase the share of renewable energy
supply in Malaysia is actually multi-faceted because it involves huge technical,
industrial, policy, financial, social and economic challenges.
Conclusion & Suggestions
National Strategies for Sustainable Development has been marginally successful in terms of
increasing the share of renewable energy supply; but the strategy has been significantly more
successful in initiating and perpetuating a stable and workable model of Sustainable Forest
Management. Although there were criticism regarding rapid deforestation, illegal logging,
unsustainable farming practices and estate management, these problems have been
significantly addressed under the various conservation, rehabilitation and law enforcement
efforts that managed to bring all issues under control.

26. 26
However, meticulous preparation in terms of policy and initiatives must be put in place to
address future challenges. Among others, greater and more effective incentives should be
introduced to encourage best practices in forestry, timber industry and estate management.
For example, companies should be given tax breaks to implement sustainable logging
practices that cause less harm to the environment which entails the use of airborne timber
lifting method and minimize the use of heavy machineries to lessen collateral damage on the
forest. Incentives should be also given to companies or conservationists to replant logged
forests with new trees for future harvesting or for reforestation.
Energy wise, the existing power plants can be retrofitted with more environmentally-friendly
power generators once the old generators reach the end of life cycle. In this respect,
comprehensive and effective incentive mechanism should be crafted and implemented to
encourage the transition from fossil fuel-based power generators to renewable energy-based
technology. Strategic campaign and awareness programs should be carried out to heighten the
sensitivity and propensity towards renewable energy as a credible alternative for non-
renewable sources of energy.

27. 27
References
UN General Assembly 96th Plenary Meeting, Report Num: 42/187, dated 11th December
1987 (http://www.un.org/documents/ga/res/42/ares42-187.htm)
CIA World Factbook accessed on 31st May 2013
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May 2013
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Datuk Loo Took Gee, National Green Technology Policy and its implementation challenges
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Syed Shah Alam (UKM), Nor Asiah Omar (UKM), Mhd. Suhaimi Bin Ahmad (UKM), H.R.
Siddiquei (IIUM) and Sallehuddin Mohd. Nor (UKM); Renewable Energy in Malaysia:
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January 2013 by Macrothink Institute,
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