This article first appeared in Digital Edge, The Edge Malaysia Weekly on December 30, 2024 – January 12, 2025

Climate change has led to prevalent issues such as drought and severe flooding, prompting companies in the climate tech space to tackle these challenges in the hope of making a global impact.

The climate tech sector is experiencing rapid growth, driven by both homegrown companies and international players addressing critical gaps. From corporate solutions like carbon reporting to waste management innovations, the landscape is ripe for expansion, supported by government initiatives.

The government has introduced robust policies and frameworks to combat climate change, including the National Energy Transition Roadmap (NETR), the Hydrogen Economy and Technology Roadmap (HETR) and the Climate Change Act. These provide a strategic path towards a low-carbon economy.

Financial incentives such as the Green Investment Tax Allowance (GITA), Green Income Tax Exemption (GITE), and funding schemes like the Green Technology Financing Scheme (GTFS) encourage enterprises to adopt sustainable practices. Certifications and promotions through initiatives like MyHIJAU further boost market awareness of green products and services.

However, more efforts are needed to strengthen the industry and accelerate the growth of sustainable businesses, as urgent climate action is crucial to mitigating worsening impacts. DigitalEdge spoke with industry players to gather their insights.

While government policies and frameworks are promising, their implementation and outreach could be strengthened, says Saiful Adib Abd Munaff, chief operating officer of the Malaysian Green Technology and Climate Change Corporation (MGTC). Stronger policy mechanisms are essential to drive broader adoption and more impactful action.

Stricter enforcement of environmental standards, enhanced incentives for green innovation, and mandatory transparent carbon emissions reporting could foster greater accountability and accelerate progress.

“Public education campaigns to raise awareness and drive behavioural change are equally crucial, as they help ensure that individuals and communities are part of the climate action movement.

“By enhancing existing policies and creating a cohesive ecosystem that aligns public, private and community efforts, Malaysia can accelerate progress towards its net zero goal by 2050 and deepen its contributions under the Paris Agreement,” he says.

While awareness is growing, stronger policies and incentives from the government can greatly accelerate adoption. Clear guidelines and standards, coupled with incentives, will encourage both public and private sectors to take meaningful steps towards sustainability, says Saiful.

“Furthermore, increased transparency around environmental goals can help reinforce a unified commitment across sectors, making it achievable for enterprises and individuals to align with national targets,” he says.

MGTC developed the Low Carbon Operating System (LCOS), a carbon management platform that helps organisations measure, manage and mitigate greenhouse gas (GHG) emissions. By inputting data on energy use and other activities affecting carbon output, companies receive a basic summary report from the platform.

Saiful explains that LCOS was motivated by the nation’s increasing commitment to achieving climate targets and meeting international obligations, including its aspiration for net zero emissions by 2050 and its commitments under the Paris Agreement.

“Essentially, it’s a tool that empowers organisations to track their environmental impact and plan actionable steps towards sustainability. We saw a need for a system that would simplify carbon tracking, fostering a culture of accountability and proactive change across sectors,” he says.

While there are other carbon management systems globally, LCOS is unique in its focus on Malaysia’s specific needs and regulatory landscape, making it a highly relevant tool in the local market. For example, users may upload their electricity bills and the system will extract the relevant information from the document, making the experience seamless and easy.

“We also position the product at an affordable price point to suit organisations of any size and aim to empower more users to manage and reduce their environmental impact confidently and effectively.”

Saiful: Increased transparency around environmental goals can help reinforce a unified commitment across sectors, making it achievable for enterprises and individuals to align with national targets

Tax breaks and incentives to propel the industry further

From a waste management perspective, Yanni Ching (picture), co-founder and chief commercial officer of Entomal Biotech, says waste generators need to be empowered to look for sustainable solutions. This can be done by offering these companies more tax incentives or subsidies for waste management solutions.

“If they know there are incentives to look at sustainable solutions, there’s no reason why they won’t use it. From here, more policies can be put in place to help accelerate the waste segregation practices. We don’t have that in Malaysia right now,” she says.

“This can also help companies with carbon management, where they can use the data on the amount of carbon treated to get access to funding or dole out carbon credits, so that they can do more sustainable activities. It can also facilitate market adoption speed.”

Entomal Biotech is the pioneer in tapping into the post-consumption food waste management market. The company uses black soldier flies to produce larvae, which are then fed with clean, post-consumption food waste.

When the larvae reach a matured stage, they are turned into feed. “Only 8% to 10% of the baby larvae are used for the colony population and the rest will be turned into feed.”

Based on the company’s latest data, Entomal Biotech has treated close to 22 tonnes of waste, preventing about three tonnes of carbon emissions while also producing close to eight tonnes of downstream products.

“We basically convert what would have gone to a landfill into something that is of value, in the carbon sense, but also in the sense of feed and fertilisers. We are really seeing that value starting to show.”

Malaysia’s greentech landscape is on an upward trajectory, with both local innovation and international partnerships playing crucial roles. MGTC’s Saiful anticipates steady growth in the adoption of energy-efficient technologies, renewable energy and digital sustainability platforms.

For this growth to be sustainable, support from the government is essential, especially in the form of financial incentives, tax breaks, grants for research and development, and policies to encourage investment.

“A robust ecosystem, with private sector engagement and public awareness campaigns, is equally critical in sustaining the momentum and fostering a green culture throughout the nation,” he says.

Source: KLSE Screener