This article first appeared in Forum, The Edge Malaysia Weekly on November 25, 2024 – December 1, 2024
The climate crisis, once a looming threat, has now become an urgent reality that demands immediate action. The consequences of inaction are becoming increasingly severe, affecting not only our environment but also the global economy and societal well-being. Have we reached a critical juncture, or are we still in denial, clinging to the belief that the climate crisis is a myth?
Climate change impacts in Malaysia
Malaysia is no stranger to rising temperatures, increasingly frequent and intense rainfall and a growing number of flooding events. An unforgettable example unfolded on the night of Dec 17, 2021, as relentless downpour unleashed a month’s worth of rainfall within just 24 hours. While these changes have profound implications for a country’s economy, infrastructure, agriculture and public health, the climate crisis also presents serious social challenges and a higher risk of displacement for communities living in vulnerable areas. Bank Negara Malaysia estimated that between 1998 and 2018, the Malaysian economy sustained total damage of approximately RM8 billion from more than 50 natural disasters caused by climate change. In addition, it is estimated that more than three million Malaysians are affected by this climate crisis, which includes displacement, injury and even death. Moving forward, 10.3% of the total assets of banks and 24.4% of the total assets of insurance companies are potentially at risk due to climate change.
Global pledge on climate action
In response to the alarming rise in global temperatures and the cascading impacts on the environment, nations across the globe have pledged to take bold steps to limit the effects of climate change. The Paris Agreement continues to serve as a guiding framework, where countries have committed to keeping global warming well below 2°C, aiming for 1.5°C. COP28 in Dubai in 2023 played a critical role in reviewing these pledges, addressing gaps and scaling up global ambition to meet the climate challenge. With carbon neutrality goals set for mid-century, many nations are investing heavily in technologies to drive these efforts forward.
Malaysia’s role in tackling climate change
Malaysia, as part of its commitment to the global climate agenda, has shown proactive leadership, particularly through its efforts in carbon management and sustainable development. In alignment with the National Energy Transition Roadmap (NETR), launched during the International Greentech & Eco Products Exhibition and Conference Malaysia (IGEM) 2024, Malaysia reaffirmed its role as a key player in Southeast Asia’s green economy, announcing investments in renewable energy, green financing and carbon capture, usage and storage (CCUS) projects, all of which contribute to its goal of achieving net zero emissions by 2050. By leveraging innovative technologies and regional cooperation, Malaysia continues to balance economic growth with environmental stewardship, making strides in climate mitigation.
Malaysia’s hard-to-abate sectors: A key challenge in reducing GHG emissions
The country’s hard-to-abate industries, such as steel, cement and petrochemicals, play a significant role in the country’s climate crisis due to their high energy consumption and dependence on fossil fuels. These sectors are crucial to the nation’s economic growth but also present substantial challenges when it comes to reducing greenhouse gas (GHG) emissions. Decarbonising these industries is essential in achieving Malaysia’s climate goals, particularly as they continue to drive industrial output while contributing to the nation’s carbon footprint. However, this reliance also presents an opportunity for transformation. The escalating climate crisis emphasises the need for Malaysia to adopt low-carbon solutions that target hard-to-abate sectors, such as CCUS technologies, for cleaner energy transformation.
The NETR and CCUS
Malaysia has been recognised as the best country in Southeast Asia in the Energy Transition Index 2023 by the World Economic Forum. This shows that the country is on the right track to drive our strategic shift and economic restructuring into new growth areas through NETR. The NETR outlines Malaysia’s commitment to achieving net zero GHG emissions in 2050, a goal that aligns with global climate targets. Furthermore, the road map emphasises a shift from fossil fuels to cleaner energy, such as setting a target of 70% renewable energy installed capacity by 2050.
To achieve the net zero emissions goals, the NETR identifies several key energy transition levers, including the deployment of CCUS. It is a cornerstone of the country’s strategy to decarbonise its energy and hard-to-abate sectors, offering a cost-effective pathway to achieving net zero emissions while sustaining a low carbon economy. By capturing CO2 at its source, converting it into useful products, or storing it deep underground, CCUS prevents harmful emissions from entering the atmosphere. Furthermore, implementing CCUS can significantly reduce decarbonisation costs, potentially saving US$120 million (RM535 million) to US$130 million cumulatively by 2050. This presents a more affordable alternative to other solutions such as green hydrogen and renewable energy, ensuring that key industries remain competitive and sustainable in the long run as the nation transitions away from fossil fuels.
However, it is essential to note that CCUS is not a mechanism to prolong the use of fossil fuels. According to findings from the Intergovernmental Panel on Climate Change (IPCC), CCUS plays a critical role in achieving climate targets. The IPCC also asserts that without the deployment of CCUS, significant reductions in emissions from hard to abate sectors would be unachievable, making it impossible to keep global warming within the targets set by the Paris Agreement.
CCUS: A safe decarbonisation solution, essential for climate change mitigation
The 28th United Nations Framework Convention on Climate Change Conference has urged member countries to invest in low-carbon technologies like CCUS, with the IPCC confirming that geological CO2 storage is safe, with a leakage probability of less than 0.001%. Decarbonisation methods, including CCUS, are vital to mitigating climate change impacts like rising sea levels and biodiversity loss. Malaysia’s CCUS legal framework will address key risks such as environmental degradation, technical challenges, and non-permanent storage, with international standards guiding risk mitigation measures and project assessments.
Malaysia positioned to become a regional CCUS hub with strong national frameworks and global market advantage
By integrating CCUS into national frameworks such as the New Industrial Master Plan (NIMP) 2030, Nationally Determined Contributions (NDC), National Climate Change Act (RUUPIN), and the Long-Term Low Emission Development Strategies (LT-LEDS), Malaysia is well positioned to meet its domestic and international climate commitments. With an estimated CO2 storage potential of 150 gross tonnage, strong LNG relationships and cost advantages in shipping to key markets like Singapore, Japan and South Korea, Malaysia has the potential to emerge as a regional CCUS hub.
The country’s potential is further strengthened by its strategic investments in technological innovation, cross-border collaboration and regulatory frameworks. The country is building expertise in carbon capture technologies, creating a skilled workforce and fostering partnerships with international stakeholders. These efforts not only position Malaysia to service its own decarbonisation needs, but also allow it to offer carbon storage solutions and expertise to neighbouring nations. These frameworks ensure that Malaysia remains on track towards achieving net zero emissions by 2050 while supporting its ambition to become a leader in CCUS for the region.
Economic growth and regional leadership through CCUS innovation
CCUS offers significant economic benefits for Malaysia, acting as a catalyst for new sources of growth and the emergence of innovative industries. By harnessing CCUS technologies, Malaysia can convert captured CO2 into valuable products, paving the way for advancements in sectors such as biofuels, chemicals and construction materials. This not only supports sustainability efforts but also creates job opportunities and enhances the skills of the workforce in these burgeoning fields.
Importance of education and awareness in sustainability and understanding generational differences in climate change perception
While focusing on a comprehensive, sustained approach to reducing GHG emissions and implementing new technologies remains vital, let us not forget that nurturing the seeds of education and raising awareness among the younger generation is equally important for achieving sustainability.
Studies have shown that the proportion of citizens who deny climate change varies. The latest studies reveal that young people are at the forefront of the fight against climate change, with a staggering 70% of those aged 16 to 25 expressing extreme or significant concern about the future of our planet. In many developing nations — where the brunt of climate change’s devastating impact is felt most — this number climbs even higher, reflecting a growing sense of urgency and determination to drive change.
Collective commitment to sustainability for a thriving future
As we look towards the future, it is crucial that all stakeholders — governments, industries and individuals — commit to taking bold and sustained action. Embracing sustainability is not just a choice but a necessity. By taking bold, sustained action, we can secure a future where economic growth and environmental stewardship coexist, ensuring a thriving planet for future generations.
Datuk Nor Azmie Diron is the secretary-general of the Ministry of Economy
Source: The Edge