On 5 October 2023, the Deputy Prime Minister, Datuk Seri Fadillah Yusof, launched Malaysia’s much-anticipated Hydrogen Economy & Technology Roadmap1
’) at the International Greentech and Eco Products Exhibition and Conference Malaysia 2023.
The Hydrogen Roadmap is intended to be a supporting document to the National Energy Policy 2022-20242
, which envisages the development of a hydrogen economy in Malaysia. This also follows the launch of Malaysia’s National Energy Transition Roadmap3
on 29 August 2023, in which hydrogen was identified as one of the six energy transition levers that will drive the country’s efforts to be a net-zero nation by 2050.
STATE OF PLAY: HYDROGEN IN MALAYSIA
Hydrogen is widely considered to be the alternative fuel of the future. In addition to playing a role in the reduction of greenhouse gas emissions, hydrogen can be utilised to address concerns on energy security by virtue of its versatile nature. Countries such as Japan, South Korea and Singapore are taking active steps towards developing a hydrogen economy.
The State of Sarawak is spearheading the venture into hydrogen in Malaysia, with the development of two ongoing major hydrogen manufacturing projects that are expected to commence operations in 2027 as well as an urban transportation system utilising hydrogen-powered smart trams which has begun testing in Kuching4
. In addition, there are projects in the pipeline that focus on the utilisation of hydrogen in, among others, telecommunications, mobility and production.
Notwithstanding the foregoing, the use of hydrogen as a fuel in Malaysia is very much in its infancy. The cost of production is high, making the economic feasibility of venturing into hydrogen less attractive. In addition, the difficulties relating to transportation and storage of hydrogen have to be considered. There is also an absence of a clear legal and regulatory framework, which is a deterring factor for potential investors.
MALAYSIA’S GOALS FOR HYDROGEN
The Hydrogen Roadmap recognises the need to address the abovementioned challenges in order to make hydrogen a viable fuel source and to develop the hydrogen economy in Malaysia. To that end, there are three goals set under the Hydrogen Roadmap:
The achievement of these three goals will be premised on five strategic thrusts, which are considered below.
FIVE STRATEGIC THRUSTS UNDER THE HYDROGEN ROADMAP
Each strategic thrust under the Hydrogen Roadmap sets out proposed action plans, a summary of which is as follows:
HYDROGEN AS A FUTURE FUEL IN MALAYSIA
Meeting the goals under the Hydrogen Roadmap will be a gradual process, with the targeted timeline for implementing the various action plans ranging from 2024 to 2050. However, this roadmap marks the beginnings of the development of a hydrogen economy in Malaysia, one which is projected to result in a potential revenue of RM89 billion by 2050. It is also reflective of the efforts that are being taken to address and manage the energy trilemma in Malaysia.
In his novel “The Mysterious Island”, Jules Verne wrote that “…water will one day be employed as fuel, that hydrogen and oxygen which constitute it, used singly or together, will furnish an inexhaustible source of heat and light, of an intensity of which coal is not capable
”. It would seem that this vision is on its way to becoming a reality within the foreseeable future.
For enquiries on matters relating to energy transition, please contact Richard Khoo (Partner) and Rachel Chiah (Senior Associate) of the Energy Practice of Skrine.