Demand for green buildings in Malaysia is projected to surge significantly in the coming years, potentially reaching around 10 million square feet annually.

However, this demand is currently unmet, according to JLL Appraisal & Property Services Sdn Bhd (JLL Malaysia).

JLL Malaysia’s head of research and consultancy, Yulia Nikulicheva said that an adequate supply of green buildings could be achieved either by upgrading the existing inventory or by constructing new structures.

“I believe this is a complex issue because many older buildings have the potential to be upgraded with green features.

“However, currently, the financial aspects are quite challenging, and some buildings may also be repurposed for other uses,” she said at a press conference for the third-quarter (3Q) 2024 Office Market Dynamics Report.

JLL Malaysia is a unit of Jones Lang LaSalle IP Inc, a global commercial real estate and investment management company listed on the New York Stock Exchange.

Nikulicheva noted that the green building market in Malaysia is performing well, although it still lags behind Singapore, which has a higher proportion of green space.

“Compared to Hong Kong, where the ratio of green space is relatively low, we are performing quite well,” she said.

Nikulicheva pointed out that some older office markets, such as those in Japan and Hong Kong, face greater challenges in transformation.

“In Malaysia, we are quite well-positioned because many of the buildings have been constructed recently. Even though they may not have green features, we see that the landlords of these buildings can implement green transformations.

“Starting this year, we have seen more landlords undertaking customer initiatives in green practices, and next year will probably be significant for these developments. I believe that in the coming years, we will see considerable progress,” she added.

Source: Bernama

Malaysia’s green building demand to reach 10mil sq ft annually: JLL Malaysia

Since the opening up of the economy after the lifting of border controls enforced during the pandemic, Malaysia’s logistics warehousing sector has grown by leaps and bounds. The concern is whether there will be an oversupply of such facilities that the market cannot absorb. To help understand the situation better, City & Country spoke to property experts for an overview of the sector, insights into what developers should pay attention to and the sector’s outlook.

Savills Malaysia group managing director Datuk Paul Khong says: “Logistics and warehousing have been the ‘darling sector’ of the entire market, and demand for e-commerce … peaked during the Covid-19 pandemic in 2020 to 2022, which caused the rapid spike in the development of the industry.

“With the reopening of international borders on April 1, 2022, total cargo volumes in 2023 increased significantly, with total container throughput rising 3.5% year on year to 28.24 million TEUs (twenty-

foot equivalent units) in Malaysia, indicating strong growth.”

Savills Research data for Greater KL in 1H2024 shows that 55.3 million sq ft of warehousing or logistics space is available, especially in Klang and Shah Alam. These two locations take up 80% of market share with their strategic locations and proximity to the key transport hubs of Port Klang and Kuala Lumpur International Airport. Furthermore, there is an expected supply of 11.28 million sq ft coming into the market until 2027.

According to JLL Research, high-quality logistics spaces are located in three regions — the Klang Valley, Penang and Johor.

“At least 45 million sq ft of high-quality logistics space has been built so far in Malaysia. More than two-thirds of the total existing stock is located in the Klang Valley. Johor is the second largest market and Penang comes third,” says JLL Malaysia head of research and consultancy Yulia Nikulicheva.

“About 25 million sq ft of space is expected to be delivered [in the Klang Valley]. This represents a 40% increase in stock expected in Kuala Lumpur. We expect Johor and Penang’s share in new supply to remain stable around 30%.”

Knight Frank Malaysia executive director of land and industrial solutions Allan Sim concurs with his fellow experts and highlights how the use of the property differs from region to region.

“The majority of existing logistics warehouses in Penang and Johor are built for own occupation and end-users, whereas in the Klang Valley, they are developed more for rental or investment purposes,” he says.

According to Sim’s research, in 1H2024, the existing supply of logistics space in the Klang Valley was about 56.7 million sq ft, following the completion of two logistics warehouses in Bandar Bukit Raja Industrial Gateway.

“An additional 8.5 million sq ft of logistics space is expected to enter the market within the next two years, with about four million sq ft anticipated in 2H2024 and the balance of 4.5 million sq ft by 2025. In the pipeline are about 16.6 million sq ft of logistics space with projected completion between 2026 and 2028. This translates into an average of 5.5 million sq ft of incoming space annually,” says Sim.

Is there an oversupply?

With the expected increase in the supply of logistics warehouses, will there be an oversupply in the sector? The experts highlight some concerns but, overall, they seem optimistic that supply will be absorbed provided certain strategies are in place.

According to Savills’ Khong, “There are some slight concerns on oversupply, with 11.28 million sq ft of new warehouse space potentially increasing the current supply by 20%. Many of these new spaces are not leased yet; thus, absorption may take some time. In addition, businesses are moving towards larger, integrated warehouses by consolidating smaller spaces, driving demand for these solutions. This shift is likely to make new, high-quality warehouses perform better and stay appealing in the changing market.”

For JLL’s Nikulicheva, the issue of oversupply has to be looked at from two perspectives — market drivers and demand dynamics.

For market drivers, she highlights that the occupiers of logistics space in the Klang Valley are logistics and third-party logistics players (45.2%), followed by manufacturing (31.5%), retail (14.6%), e-commerce (6.2%), transport (2.1%) and information storage (0.4%). All of these occupiers are expected to see growth in their individual sectors, she says. As such, there will still be demand for logistics warehouses.

From demand dynamics, she says, data from JLL Research shows that new supply coming in 36 months is close to 25 million sq ft, which has raised concern of oversupply. A closer look shows, however, that the situation is not as dire as it may seem.

“Zooming into the coming supply at project level, we see that many projects scheduled for delivery in the coming 18 months have already secured a 50% occupancy rate prior to delivery,” Nikulicheva says.

“This trend has been persistent in the past two years. It demonstrates that the market is unsaturated. Vacancy rates are well below 5%, confirming that the logistics and industrial segment remains a landlord’s market.

“On the supply side, the market has been dominated by professional players experienced in delivering projects nationwide and internationally and, so far, they were not [observed to have made] bold decisions in their expansion strategy.”

Knight Frank’s Sim concurs, saying that the oversupply of logistics warehouses is not something to be concerned about, as there is strong leasing demand for Grade A warehouses and that trend looks set to continue. According to research data from Mordor Intelligence, he adds, the Malaysia freight and logistics market is expected to reach US$38.28 billion (RM165 billion) by 2030, which could result in an increase in demand for logistics warehouse space.

He says: “For projects that are ongoing and under construction, the pace of pre-lease activities may tend to be gradual or slower. The reason is that in Malaysia, end-users and occupiers often tend to wait until industrial projects are either near completion or fully completed before committing to pre-lease or lease agreements. This cautious approach is driven by a desire to ensure that the finished product meets specific needs, expectations and the timeline.

“Meanwhile, as the global supply chain adjusts to new global factors and recovery on industry sectors such as semiconductors, this would affect the supply and demand dynamics — providing a boost to demand for warehouse spaces in key regions such as Penang, Kedah, Melaka and Selangor. The rental performance of warehouse spaces will be subject, however, to investment activities, such as trends of foreign direct investment and domestic direct investment, in the coming year.

“As such, the logistics warehouse market is expected to remain stable and we do not foresee an oversupply, at least for the next two to three years.”

Managing expectations

With the logistics warehouse sector looking stable, how should developers manage their output of the product?

The first thing, Savills’ Khong suggests, is to lease out unsold stock so that the industrial park looks vibrant, and this could lead “to improved saleability and occupancy rates”. Moreover, it will help reduce holding costs such as property taxes and maintenance fees.

For products under construction, he says: “Developers should focus on securing pre-leasing agreements to ensure a steady income stream with their completion and thereby minimise vacancy risks and reduce speculative construction.”

For warehouses that have yet to be built, he advises: “Developers may consider built-to-suit options, which creates facilities tailored to specific tenant requirements with pre-agreed lease terms and at discounted rentals. This aims to reduce the risks associated with speculative development.”

Khong adds that sustainable construction practices are also crucial. “Adopt ESG (environmental, social and governance) elements, such as energy-efficient systems, renewable energy sources and green technologies including solar panels and cool roof systems, which aligns with modern sustainability standards and appeals to environment-conscious tenants.”

Nikulicheva says a logistics warehouse is easy to plan and build, taking a developer up to 25 months from planning to delivery. Still, she adds: “Even though market prospects are quite positive, developers should take a cautious view when developing larger-scale projects. Current headwinds in the global economy that anticipate a contraction of exports and reduction in global logistics volumes may have a negative impact on the Malaysian market.

“Even though in the coming two years, market balance is expected to be favourable for landlords, the overall market size is still quite vulnerable to larger volumes of supply delivered simultaneously and it may have a negative impact on vacancy rates and rent levels.”

Knight Frank’s Sim believes the products require maintenance if they are to stand the test of time. “Most industrial developers and real estate investment trusts specialising in logistics warehouses are experiencing near-full occupancy rates for their premises or assets. Despite the high occupancy rates, these stakeholders must continuously perform maintenance and occasional upgrades to ensure that their logistics premises or assets remain competitive with newer or upcoming buildings.

“We also observed that many outdated industrial assets were being phased out because they could not meet today’s demands. As such, developers or owners should consider undertaking a regeneration process to cater for newer requirements which are driven by automation and the ESG agenda.”

Planning ahead

To ensure that the products do not end up as white elephants, the property experts believe awareness of the latest trends and knowing what potential tenants are looking for are essential.

Sim highlights that sustainability and innovation are essential components to include in the construction of logistics warehouses, which will have several benefits.

“Occupiers are increasingly looking for warehouse spaces that align with their own sustainability goals. High-quality, or MNC (multinational corporation), tenants or occupiers are willing to pay a premium for warehouse spaces that meet this requirement,” he says.

This will logically lead to a reduction in operational costs when systems are energy-efficient and come from renewable sources in the form of energy-efficient lighting, insulation and solar panels.

Sim adds: “Developers should build warehouses with automation-readiness. As e-commerce and logistics continue to grow, the demand for automated solutions will increase. Designing warehouses with automation in mind ensures that they can scale up and adapt to future needs without requiring a major overhaul, which will eventually help the tenant or occupier to enhance efficiency and productivity, have better space utilisation and a more competitive advantage as well as improve safety, to name a few.”

On top of all this, there is also the issue of compliance. “Governments and regulatory bodies are implementing stricter environmental regulations and standards. Sustainable buildings often comply with these requirements more easily and, thus, they may also benefit from certain incentives.”

Nikulicheva’s advice follows the adage of “location, location, location”, but positioning logistics warehouses near major “thoroughfares linking seaports, airports and larger urban agglomerations” is essential.

Khong believes in offering practical and functional products. “Ensure that floors are durable and can support heavy equipment and stacking. Design large floor plates to enhance space efficiency and accommodate high product volumes. Include high ceilings to maximise vertical storage and support advanced automation systems. Implement the latest technologies and energy-efficient practices to boost efficiency and attract sustainability-focused tenants,” he says.

In terms of outlook, the property experts believe the sector still has legs.

Nikulicheva says: “As the macroeconomic drivers of the growth of logistics are expected to remain strong, we expect further market expansion in the medium term. A high level of space being pre-let before completion gives confidence to developers about their future investments. We anticipate continued rental growth in this segment, as new properties entering the market are often built with higher specifications.”

For his part, Sim says: “Despite some external challenges, the outlook for the logistics warehouse segment in Malaysia remains optimistic. The demand for prime logistics warehouses in key locations or regions such as the Klang Valley, Johor Bahru and Penang will remain stable, with moderate rent increases anticipated.

Khong adds: “Value-added services such as security, asset management and facilities management have become an expected norm and custom-built warehousing or built-to-suit models, particularly in smart logistics, are becoming popular.

“Overall, the logistics warehouse sector is set to continue its pace of growth with these trends and technological improvements.”

Source: The Edge Malaysia

Logistics warehousing holds steady despite imminent new supply

The exhibition highlights the country’s dedication to climate action and biodiversity conservation, emphasising the role of green technology

The 15th edition of the International Greentech & Eco Products Exhibition and Conference Malaysia (IGEM 2024) underscores Malaysia’s commitment to sustainability and green technology. 

Held from Oct 9 to 11, 2024, and themed “Race Towards Net Zero: Regional Leadership for Climate Urgency,” the event served as a platform to promote Malaysia’s efforts to harmonise socio-economic progress with environmental stewardship. 

IGEM 2024 highlighted the country’s dedication to climate action and biodiversity conservation, emphasising the role of green technology in achieving these goals. 

The event fostered collaborations and encouraged the exchange of knowledge among policymakers, investors, industry leaders and thought leaders, helping to generate sustainable, solution-driven ideas. 

It served as a dynamic hub for innovation and collaboration. It aimed to further Malaysia’s ambition to become a regional and global leader in sustainability efforts, especially with the country’s upcoming chairmanship of ASEAN in 2025. 

The exhibition focused on five key pillars: Empowering Cities, Electrifying Mobility, Decarbonising Energy, Accelerating Circularity and Conserving Biodiversity. 

This year’s edition also introduced new features such as a specialised industry zone focused on hydrogen and carbon technologies, the Central Energy Transition Asia (CETA) and a multi-venue exhibition on connected autonomous shared electric mobility. 

Additionally, IGEM 2024 showcased a Green Job booth, providing opportunities for individuals interested in joining the sustainability movement. 

Since its inception in 2010, IGEM has generated RM53.1 billion in business leads, attracting 600,000 visitors from 122 countries to its 4,000 exhibition booths. 

Last year, IGEM continued its successful run with RM11.17 billion in business leads and 55,594 visitors, solidifying its position as a key platform for green innovation. 

IGEM 2024 drew around 48,000 visitors, with 480 exhibition booths featuring innovations from 48 countries, including China, Singapore, Finland and Canada. 

The event aimed to generate RM4.8 billion in potential business opportunities, reinforcing its role as a significant driver of green technology development and partnerships. 

Leading Regional Green Technology Efforts

Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad called for immediate action to address climate challenges and emphasised the pivotal role IGEM plays in fostering green technology and international collaboration. 

“IGEM has significantly advanced the integration of diverse industries and global experts. It has progressed beyond just an exhibition, becoming a symbol of our shared resolve to achieve a more sustainable future,” he said at the opening ceremony. 

He also stressed the severe impact of extreme heat on Malaysia’s agriculture, warning that rice yields could drop to 62% of last year’s figures due to rising temperatures. 

Nik Nazmi underscored the severity of the temperature crisis, referencing the heatwave warnings, bordering on 45, issued by the Malaysian Meteorological Department between January and September this year. 

“Addressing these challenges requires more than awareness; it demands the mobilisation of resources, strategic investments and collaborative efforts,” he said. 

He also outlined key government initiatives to strengthen environmental protection, including the National Climate Change Bill and enhanced climate financing strategies. 

He highlighted carbon credits as a key tool to support low-carbon projects. 

“Carbon credits will provide opportunities for corporations to demonstrate their climate actions by efficiently allocating capital to support forest conservation and low-carbon technologies,” he added. 

Nevertheless, Nik Nazmi affirmed that Malaysia will continue to take an active role on the global stage, including at COP29 in Azerbaijan later this year, as the country works toward achieving its net-zero target by 2050. 

On the other hand, Economy Minister Rafizi Ramli highlighted Malaysia’s unique position to harness both its natural resources and progressive policies to drive sustainability in South-East Asia. 

“Malaysia is poised to be a regional leader in renewables due to our rare ability to harness both natural resources and sound policy at a high level,” he said at the event. 

He emphasised that despite Malaysia contributing less than 1% of global emissions, the country is committed to playing a significant role in regional climate action. 

“We are committed to leading the way in South-East Asia to secure a sustainable future for the region,” he added. 

Govt Initiative and Climate Policy Focus

Nik Nazmi and Rafizi announced several key government initiatives during IGEM 2024, showcasing Malaysia’s significant strides in its climate policy and green technology efforts. 

Nik Nazmi highlighted the government’s focus on fast-tracking the National Climate Change Bill (RUUPIN), describing it as a crucial step toward achieving the country’s climate goals. 

He also announced the launch of the National Climate Change Policy 2.0, which complements the National Adaptation Plan and the National Carbon Market Policy. These policies will foster a coordinated approach to climate action, incorporating adaptation, mitigation and market-based solutions. 

“These initiatives provide a framework for Malaysia to better align our efforts with global standards while addressing our unique Rafizi further described the bill as a “microcosm of our ambition” to demonstrate that Malaysia can effectively combine policy with its natural resources to reach its climate targets. 

Business and Industry Participation

Businesses are crucial in driving Malaysia’s progress towards its emission reduction goals. 

At the event, Nik Nazmi urged businesses and industry players to take a more active role in the country’s climate action efforts, particularly through participation in the carbon credit market. 

He emphasised that carbon credits offer an opportunity for companies to demonstrate their commitment to sustainability by supporting initiatives such as forest conservation and low-carbon technologies. 

“Carbon credits provide opportunities for corporations to take meaningful climate actions by efficiently allocating capital to support forest conservation and low-carbon projects. 

This is vital for us to achieve our target of reducing emissions by 45% by 2030,” he said. 

A prominent example of corporate participation is the Kuamut Rainforest Conservation Project in Sabah, which is part of the voluntary carbon market. 

The project is expected to reduce carbon emissions by an estimated 800,000 tonnes of CO2 annually, further underscoring the role of businesses in supporting national and global climate goals. 

“Businesses have a critical role to play in our climate strategy and through initiatives like carbon auctions and green investments, they can significantly contribute to our collective sustainability efforts,” Nik Nazmi said. 

Apart from that, the Malaysian Green Technology and Climate Change Corp (MGTC) Group CEO Ir Shamsul Bahar Mohd Nor said IGEM has served as a platform for showcasing green technologies and driving public awareness about the green economy while generating RM53 billion in green business leads over the years. 

When IGEM began, the focus was on the energy sector, which accounts for nearly 80% of Malaysia’s carbon emissions. 

Shamsul Bahar highlighted the importance of introducing RE technologies, particularly solar power, which can be easily installed even in households. 

The event not only displayed technologies but also fostered engagement through conferences, seminars and programmes aimed at educating the public and promoting green lifestyle behaviours. 

He emphasised the role of community involvement in accelerating the adoption of sustainable practices.

“We believe that community engagement can drive faster behavioural changes toward a green lifestyle,” he said.

On the other hand, IGEM has also focused on creating green jobs and building capacity in the green industry. Universities showcased innovations, while financial institutions and investors offered insights into green financing options.

“We want the public to know the types of jobs available in the green sector and to understand the financial incentives and support available,” Shamsul Bahar said.

He added that the impact of IGEM extends beyond Malaysia, as the event aimed to expand its influence across ASEAN, promoting green economic growth through-out the region.

MGTC’s incentivisation programmes have also helped spur the green economy, making IGEM a highly impactful platform for Malaysia’s transition to sustainability.

Among the sponsors and partners of IGEM 2024 included the Malaysian Investment Development Authority (MIDA), The CO-LAB Pte Ltd and Petroliam Nasional Bhd, as well as OCBC Ltd, Tenaga Nasional Bhd and Solar First Co Ltd.

Meanwhile, Solar First Energy Technology Co Ltd won Best Interactive Booth and OCBC Bank (M) won Best Informative Booth.

Powerway Renewable Energy Co Ltd claimed the Best Display Booth award while Solarvest Energy Sdn Bhd was awarded Best Creative Booth and Itrama Technology Sdn Bhd took home Best Sustainable Booth award.

Finally, Petronas was honoured with the Best Appreciation Award.

Collaboration and Partnership

Collaborations and partnerships were inked at the event, reflecting the growing commitment of both local and international players to collaborate on advancing green technology and sustainability initiatives in Malaysia.

These memoranda of understanding (MOUs) enable the exchange of expertise, technology and investment opportunities, driving the growth of RE, energy efficiency and low-carbon solutions that are crucial for Malaysia’s energy transition and environmental goals.

MIDA unveiled seven MOUs at the event valued at over RM1 billion in potential investments for the green sector.

These represent nearly half of MIDA’s RM2.5 billion investment target for the event and aim to drive Malaysia’s green innovation and support its net-zero goals.

Among the key partnerships, Solarvest Holdings Bhd signed five MOUs with companies such as Greenrock Energy Co Ltd and Vista Contracting & Investment Global Pte Ltd (Samsung), focusing on battery energy storage systems, solar farm development and green financing.

Meanwhile, Wezmart International Bhd and Green Quarter Sdn Bhd collaborated on sustainability reporting, ESG audits and carbon reduction services.

MIDA CEO Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid expressed strong interest from local and international investors, with ongoing efforts to secure the remaining RM1.5 billion in investments.

He also highlighted that four green projects, totalling RM1.8 billion, were approved in the first half of 2024, focusing on RE and green mobility.

Sikh Shamsul further emphasised Malaysia’s commitment to its Green Investment Strategy, which aims to attract RM300 billion in green investments by 2030, focusing on RE, energy efficiency, hydrogen, bioenergy, green mobility, carbon capture and the circular economy.

This strategy aligns with Malaysia’s efforts to reduce carbon emissions by 45% by 2030 and achieve net zero by 2050.

In addition to MIDA’s efforts, MGTC announced several strategic collaborations to advance Malaysia’s green transformation.

One key partnership between MGTC and Sarawak Energy Bhd (SEB) aims to reduce carbon emissions through three greenhouse gas assessments, targeting indirect emissions across SEB’s value chain.

This collaboration is expected to support low-carbon businesses through knowledge-sharing and capacity-building.

MGTC also signed a letter of intent (LOI) with Perbadanan Teknologi Hijau Melaka to enhance green technology initiatives in Melaka, focusing on RE projects and sustainable urban development as part of the state’s low-carbon economy transition.

Additionally, a memorandum of collaboration between MGTC and SAE-A STX Entech Co Ltd will focus on developing solutions to reduce carbon emissions and improve energy efficiency.

This partnership includes the construction of solar power systems across Malaysia and the transfer of SAE-A’s solar technology through MGTC’s subsidiary, Greentech Catalyst Sdn Bhd.

Shamsul Bahar highlighted that these partnerships not only support technological advancement and economic growth but also reflect MGTC’s commitment to creating green jobs and ensuring sustainable solutions are accessible to all Malaysians.

Further strengthening Malaysia’s green sector, Itramas Corp Sdn Bhd partnered with global solar manufacturers CMEC Wuxi and Longmax to enhance the country’s solar supply chain.

This collaboration includes setting up a 500MWp solar module manufacturing facility in Malaysia with CMEC Wuxi and producing solar combiner boxes with Long-max for both Malaysian and international markets.

The partnership will promote technology transfer, knowledge-sharing and local engineer training, contributing to Malaysia’s growth as a regional RE hub.

Challenges Ahead and Roadmap to Net Zero Malaysia faces significant challenges in its journey toward achieving net-zero emissions by 2050. However, the country remains committed to its climate goals.

Nik Nazmi said Malaysia’s vulnerability to climate change is a primary challenge.

He stressed that the country, like many ASEAN nations, is highly exposed to extreme weather events such as heatwaves and floods, which threaten food security, infrastructure and economic stability.

Additionally, the financial burden of achieving net zero is substantial. Nik Nazmi noted that the transition to a low-carbon economy will cost hundreds of billions of ringgit, a burden the government cannot shoulder alone.

“The road to net zero will not be easy or cheap, but it is a necessary investment in our future,” he said, adding that innovative financing mechanisms such as carbon pricing will be crucial in sharing the responsibility with private sector partners.

Balancing economic development with sustainability is another challenge. As a developing nation, Malaysia must continue to grow economically while reducing emissions.

Nik Nazmi also pointed out that developing the carbon market further is essential, with more local projects needing to meet international standards like the Carbon Offsetting and Reduction Scheme for International Aviation.

Lastly, he said decarbonising key industries such as power generation and heavy manufacturing will be difficult without the right regulatory frameworks and technologies like CCUS.

Despite these challenges, Nik Nazmi outlined a clear roadmap to net zero, starting with the fast-tracking of the National Climate Change Bill and the National Climate Change Policy 2.0. These legislative measures will provide a comprehensive framework to guide Malaysia’s climate actions.

“The National Climate Change Bill will serve as a crucial backbone for our efforts to achieve net zero by 2050,” he said.

A key part of Malaysia’s strategy is exploring carbon pricing instruments, such as a Carbon Tax or a Domestic Emission Trading Scheme, to create financial incentives for reducing emissions.

“Carbon pricing will play a pivotal role in driving investments into low-carbon technologies and encouraging businesses to adopt greener practices,” he explained.

The carbon credit market is also a critical component of Malaysia’s plan. By allowing companies to offset their emissions through investments in forest conservation and RE projects, Malaysia can tap into international carbon markets to support its emissions reduction goals.

Nik Nazmi also highlighted the importance of expanding RE, particularly solar power, to support Malaysia’s transition to a low-carbon economy.

“We are investing heavily in solar manufacturing and partnerships with global solar players to build a robust RE sector,” he said.

The introduction of the CCUS Bill will be another key element of the roadmap, providing a regulatory framework for implementing carbon capture technologies in industries that are difficult to decarbonize, such as power plants and heavy manufacturing.

“CCUS will be crucial in helping us meet our decarbonisation targets, especially in sectors where electrification is not a viable option,” Nik Nazmi said.

Finally, he stressed the importance of a whole-of-nation approach. “Achieving net zero will require the participation of everyone — businesses, workers and citizens alike. We all have a role to play in building a sustainable future,” he said.

Shamsul Bahar added that one of the key challenges in scaling up RE is attracting the necessary private-sector investment.

“The roadmap has been set by National Energy Transition Roadmap (NETR), but the private sector needs to step in. While Malaysia has created spaces and sources, the private sector must provide the investments,” he said.

The NETR also outlines several regulatory changes and incentives to drive RE adoption.

Among these is the introduction of third-party access, which allows energy producers to generate and sell energy directly to their customers, bypassing the single-buyer system.

“Malaysia has set the platform to create an easier path toward achieving net zero and 70% RE by 2050,” he added.

In addition to regulatory changes, financial support is a critical aspect of scaling up RE.

Not all investors have immediate access to the necessary funds and MGTC has been working with financial institutions to facilitate green financing.

These incentives are designed to attract more private sector participation in Malaysia’s green energy transition.

In conclusion, despite the challenges of achieving net zero, Malaysia’s robust regulatory framework, financial incentives and clear roadmap provide a solid foundation for success.

With strong policies, innovative financing and collaboration between the public and private sectors, Nik Nazmi remains optimistic that Malaysia will meet its RE and climate goals by 2050.

Source: The Malaysian Reserve

IGEM 2024: Malaysia strengthens commitment to sustainable future

Six electric vehicles from China will be distributed to Technical and Vocational Education and Training (TVET) institutions in the country to be used as practical training material for students.

Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi, who is also National TVET Council chairman, said the vehicles were a gift from Beifang Automotive Education Group to Malaysia.

“We plan to distribute a vehicle each to the Perda High Skills Institution’s Automotive Centre in Penang and the Centre of Technology Excellence Sarawak (CENTEXS).

“The remaining four will go to TVET institutions under Majlis Amanah Rakyat (MARA), including GiatMARA, IKM (the Malaysian Skills Institute) and others,” he told reporters after attending a Deepavali related gathering at the Bagan Datuk UMNO Complex here today.

He said the initiative will allow students to be exposed to the latest electric vehicle technology, and that over 100 lecturers have been sent to China to undergo training and automotive courses.

“They will spend three to six months there as the field is already familiar to them,” Ahmad Zahid said.

He added that through the increased TVET allocation in the MADANI Budget 2025, he would hold discussions with Beifang to increase the number of students undergoing training at the Beifang International Education Group, which currently has 2,000 Malaysians students sent over.

Source: Bernama

Six Chinese electric vehicles to be distributed to TVET institutions – Zahid

The government, multiple agencies within the government, data centre operators and other stakeholders are learning how to manage and deal with data centres and how to grow the industry sustainably.

Deputy Investment, Trade and Industry Minister Liew Chin Tong said that more importantly, the government’s focus is not solely on data centres.

“Instead, it is about growing the businesses and creating jobs that are powered by data centres, including the local equipment suppliers, building a robust technology ecosystem and the services jobs in Malaysia,” he said at the Malaysia Cloud and Data Centre Convention 2024.

He said as Malaysia entered a new phase in 2024 with the advent of generative artificial intelligence (AI), the demand for data centres increased exponentially to accommodate its intense computational demands.

“The market size of AI is expected to grow by four times within the next six years and it will drive 15% annual growth in global data centre energy demand over the same period of time,” said Liew.

He noted that for a start, to work on guidelines to regulate the data centre industry, the government is developing the guidelines on power usage effectiveness (PUE) and water usage effectiveness (WUE).

He said the government is taking one step further to deal with carbon usage effectiveness (CUE) to improve energy efficiency and sustainability.

Meanwhile, Liew said investments in data centres should only be pursued if they bring tangible added value to the people, such as high-paying job opportunities and knowledge transfer.

A fresh shift in focus is now essential, ensuring that the support provided uses a multiplying effect that directly benefits the people, he said.

This is because the country could no longer sustain the outdated approach of offering incentives and support to investors without considering the broader economic benefits.

He also outlined five challenges that must be dealt with when building the infrastructure and growing data centre business, namely creating jobs, water consumption, energy consumption, localisation and preventing speculative build that could result in a glut.

“I highly encourage data centre industry players to form an association to build a collective voice and a common policy platform, as well as to advocate good and solid policies for the common good of the industry and the nation,” Liew added.

Source: Bernama

Liew: Govt learning to manage data centres, grow industry sustainably

DATA centres are not exactly a new industry. However, we entered a new phase in 2024 with the advent of generative artificial intelligence (AI). The demand for data centres increased exponentially to accommodate its intense computational demands.

The market size of AI is expected to grow by four times within the next six years, and it will drive an annual growth of 15% in global data centre energy demand over the same period of time.

I have been told that a CHATGPT search consumes about 10 times more energy than a conventional Google search. The energy consumption of AI data centres is immense and will have a significant impact on the net zero carbon emissions aspirations of many organisations and even countries.

The generative AI boom is presenting the same set of challenges to data centres everywhere in the world.

Prime Minister Datuk Seri Anwar Ibrahim, in his Budget 2025 speech on Oct 18, mentioned this:

“The country … must embark on a new paradigm shift to attract more meaningful investments. We can no longer sustain the outdated approach of offering incentives and support to investors without considering the broader economic benefits.

“For instance, investment in data centres should not be pursued unless they bring tangible added value to the rakyat, such as high-paying job opportunities and knowledge transfer.

“A fresh shift in focus is now essential, ensuring that the support provided has a multiplying effect that directly benefits the rakyat and the nation, rather than merely serving the profit motive of the investor companies.”

Now, this is a challenge for everyone, that when we grow the data centre business, we must think not just about the infrastructure but also about the multiple challenges that we have to deal with. There are five such challenges that we must work on together.

First, how to create jobs, and more importantly high value jobs, in this industry. I understand that data centres on site don’t create a sufficient number of jobs. We must think of how to generate the multiplying effect of creating jobs in operations, maintenance, and along the entire supply chain.

The job opportunities may not be on site, but the industry will have to articulate that it is growing jobs at all levels.

While developing the data centres in Johor’s Sedenak, Kulai, and Iskandar Puteri, which have now become the focal point of data centres, how do we create higher-skilled maintenance, engineering, and services jobs in Kuala Lumpur or Johor Baru? It has to come as a package.

Johor Mentri Besar Datuk Onn Hafiz Ghazi has said he asked data centre operators about pay rates, and they pay S$4,000 (RM13,150) in Singapore and RM4,000 in Malaysia. This is why he advocated for industry players to pay Malaysians at least 50% of what they pay Singaporeans, especially after benefiting from the low cost of utilities, land, and labour in Malaysia, which are 70% cheaper than in neighbouring countries.

How do we create jobs that pay well? How do we benchmark pay? My advice to the Malaysian industry, whether you are in a data centre or other sector, do not benchmark Malaysian pay against pay in countries with a lower skill capacity. Benchmarking has to be done differently. Malaysia should be thought of as a “Singapore at a discount”. When we think about jobs, we need to think about pay. There is no talent problem in Malaysia – the only problem is that Malaysian talents are working in Singapore. When you offer two-thirds of Singapore pay, they will come back to work in Malaysia.

The second question is water consumption. The data centre industry will have to invest in creating alternative water sources instead of competing with the people for water. For instance, southern Johor has many rivers but most of them are very dirty. Should investment be put into cleaning them up and reclaiming that water, apart from other solutions?

The third challenge is energy consumption. Two years ago, the Malaysian government made a commitment to reach net zero carbon emissions as early as 2050. This year, the Prime Minister reaffirmed that target. Energy intensive industries, including data centres, will have to look into technologies – existing and new – to help achieve this national target.

Investments in renewable energy is imperative to allow for the data centre industry to grow while minimising impact on sustainability.

The fourth challenge is localisation. This is, again, mandated by the Prime Minister to Miti (Inter-national Trade and Industry Ministry). The Prime Minister requested that Miti and Mida (Malaysian Investment Develop-ment Authority) look into mechanisms for the data centre industry to localise.

One good example is server racks. Over the past few months, the import of server racks has been quite significant. How can the government work with industry players to instead create Malaysian equipment for domestic consumption of data centres as well as potentially for export? We must remember that Malaysia has very strong metal fabrication and equipment industries that have been serving the semiconductor industry for a while.

The fifth and final challenge – the nation will also have to work with the data centre industry to prevent speculative build. AI is going to power a lot more demand for data centres, but at the same time, we need to ensure there is no speculative build which could result in a glut.

Finally, I highly encourage data centre industry players to form an association, to build a collective voice, and a common policy platform, as well as to advocate for good and solid policies for the common good of the industry and the nation.

The data centre industry is in a new phase globally. Everyone is facing the same challenges, and this is the best time to come together and work together – the government, the industry players, the users, and the wider stakeholders – to look at how to build this industry and how to deal with the challenges outlined above. I hope we can work together so that this industry can flourish, and at the same time, Malaysians benefit from the industry.

LIEW CHIN TONG Deputy Minister International Trade and Industry Ministry

Excerpt from a speech delivered at the Malaysia Cloud and Data Centre Convention 2024 on Oct 24.

Source: The Star

Challenges and opportunities of the data centre industry

Malaysia’s renewable energy and green technology industries are positioned for strong growth as the global green transition is creating significant opportunities for the country.

Allianz SE chief economist Ludovic Subran said industries such as solar energy, sustainable manufacturing and green tech innovation are experiencing high demand, especially as global supply chains push for cleaner energy sources.

He noted that Malaysia’s strong export performance in upstream industrial sectors such as technology and equipment bolstered the renewable energy sector.

“We are seeing a surge in new export orders for technology and industrial machinery, with the renewable energy market particularly well-positioned to benefit. As the world transitions to greener energy solutions, Malaysia is poised to capture more value from its exports in this space,“ Subran said during a media briefing on Autumn Economic Outlook 2024-2026: The Great Balancing Act today.

He said that the potential for service-based sectors, particularly in high-value outsourcing, to contribute to future growth. “Malaysia’s proficiency in English and its cost advantages present a strong case for attracting more business in services like legal, tax, and consulting related to the green transition.”

Touching on the domestic economy, Subran said Malaysia’s gross domestic product (GDP) growth for 2025 is expected to slow down amid external economic headwinds and domestic challenges

He forecast a 0.5% reduction in Malaysia’s GDP growth in 2025, citing fiscal tightening and the Malaysian central bank’s decision to maintain interest rates.

“A significant adjustment is happening due to a weaker domestic real estate market and concerns around political-economic uncertainties. Households are feeling the pressure and without interest rate cuts, residential real estate prices are not growing as fast, which impacts consumption,” said Subran.

Additionally, he noted that fiscal tightening measures have reduced public expenditures, which is expected to contribute to slower growth. “The half-point fiscal cut is creating what we call the ‘Ricardian’ effect, where consumers are holding back on spending due to expectations of higher taxes or reduced public benefits,” he added.

Subran said the ringgit’s performance is expected to fluctuate significantly depending on the United States presidential election outcome.

“If former US president Donald Trump returns to office, the ringgit could depreciate by 5-10% due to a stronger US dollar. A Trump presidency would put considerable downward pressure on the ringgit as the dollar strengthens. On the other hand, if Kamala Harris takes office, we expect the ringgit to face only a mild depreciation of around 2-3%, which is more manageable,” he said.

Despite the potential recovery, Subran noted, the volatility of the global market remains a concern for Malaysia, especially with the need for external capital to fund growth. “The ringgit’s vulnerability stems from Malaysia’s reliance on external financing, which exposes it to currency shifts, particularly in times of political and economic turbulence abroad.”

Looking ahead, Subran mentioned that Malaysia will need to navigate these economic challenges by balancing domestic policy adjustments with efforts to strengthen its renewable energy and green technology sectors.

“While the immediate outlook may appear challenging, sectors tied to green energy and sustainable technology provide a solid foundation for future growth. The key will be to foster strong research and development partnerships, improve incentives for technology investment and ensure that Malaysia continues to move up the value chain in the global market.”

As Malaysia positions itself to capitalise on these industries, Subran said, the country’s long-term economic prospects remain bright, provided that both external vulnerabilities and domestic policy adjustments are managed effectively.

Source: The Sun

Malaysia’s renewable energy, green tech industries set for strong growth: Allianz SE

The water reservoirs at Bakun, Murum, and in the near future, Baleh, will provide huge areas for floating solar installations, said Sarawak Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg.

He said this huge potential of solar resources can be used to pump water and subsequently utilised to generate power during unavailability of the sunlight, thereby providing additional and sustainable energy for Sarawak.

“This not only addresses our water management needs but also supports our goals of sustainability and energy efficiency,” he said in his keynote address at the Borneo International Water and Wastewater Exhibition and Conference (BIWWEC) 2024 at the Borneo Convention Centre Kuching (BCCK) today.

He added that these initiatives highlight Sarawak’s proactive approach to preparing its water and wastewater infrastructure for the demands of a growing population and a changing environment.

Abang Johari said renewable energy derived from water at hydropower plants such as Batang Ai, Bakun and Murum provided sustainable use of Sarawak’s water resources to achieve generation mix comprising predominantly renewable sources.

“Future renewable hydropower will also be implemented through cascading power sources with a series of smaller reservoirs which will have minimal impact on the environment and displacement of affected communities.

“The reservoir for the hydropower provides potentially suitable sites for floating solar, which can be used with PHES (pumped hydro energy storage), thereby increasing further renewable energy generation from water resources,” he said.

He informed that a 50MW floating solar farm is currently under construction at Batang Ai Hydropower reservoir, which upon its completion by this year end will become the largest floating solar farm in Malaysia.

“These efforts reflect Sarawak’s dedication to safeguard our environment while ensuring a reliable and sustainable water supply and utilisation for future generations,” he remarked.

During the ceremony, Abang Johari witnessed the exchange of Memorandums of Understanding (MoUs) between several organisations, namely Affin Islamic Bank Berhad and the Malaysian Water Association (Sarawak Branch); Weida Resources (Sarawak) Sdn Bhd and Singapore’s HSL Constructor Pte Ltd; Malaysian Water Association (MWA) and Singapore Water Association; International Water Association (IWA) and MWA; and IWA and Persatuan Perusahaan Air Minum Seluruh Indonesia (Perpamsi).

Also present were Deputy Premier Datuk Amar Dr Sim Kui Hian, Utility and Telecommunication Minister Dato Sri Julaihi Narawi and his deputies Datuk Liwan Lagang and Datuk Dr Abdul Rahman Junaidi, as well as BIWWEC organising chairperson Rodziah Mohamad.

Source: Borneo Post

Premier: Sarawak to tap into floating solar installations potential on hydro dams reservoirs

Glomac Bhd is currently in talks with respective parties to venture into the waste-to-energy business, as part of its plan to seek new sources of revenue, according to group managing director and chief executive officer Datuk Seri FD Iskandar Mohamed Mansor.

“We also have to get the buy-in from the respective councils because at the end of the day, this waste is collected by councils. So, if they don’t send it to you, you won’t get it. But as the Malaysian economy is growing, our landfills cannot accommodate it much longer. How many more landfills are you going to open? One of the ways to eliminate this is waste-to-energy. Yes, we are looking at it, but we are still in the talking stages,” said FD Iskandar.

While the group is open to consider any new business ventures, he assured that the company will still stay true to its core business as a property developer.

“Let me put it very clearly that we are still very much a property and real estate firm. If there’s anything synergistic to the property and real estate industry, yes, we are always open,” he told reporters after Glomac’s 40th annual general meeting on Wednesday.

Glomac first revealed that it is considering diversifying into new businesses in an interview with The Edge Malaysia weekly, published earlier this month, saying that the new venture must be within areas that have synergies with its core business in property development. One of the businesses that the group is considering is green energy.

FD Iskandar is also the chairman of GreenRE Sdn Bhd, which was set up by the Real Estate and Housing Developers’ Association (Rehda) Malaysia in 2013 to drive sustainable real estate in Malaysia’s property industry by providing green building certification and rating, green building training and awareness programmes, and by funding research and development into related areas.

Notably, Naza Corp Holdings Sdn Bhd, another property developer, in May completed the acquisition of a 100% stake in Berjaya Enviro Holdings Sdn Bhd (BEnviro) from Berjaya Corp Bhd for RM700 million in cash, marking its entry into the green economy with a focus on municipal and scheduled waste, as well as the waste-to-energy sector.

Source: The Edge Malaysia

Glomac in talks to venture into new businesses beyond property development