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Malaysia Sectors

What is Malaysiaʼs pathway to limit global warming to 1.5°C?

Malaysia’s transport sector accounts for the largest share of primary energy consumption, at 38.5% in 2017.13 Though its share has remained almost the same since 1997, energy consumption of the sector has increased steadily over time. In 2019, the share of electricity use in transport sector was less than 1%.5 Paris Agreement compatible pathway requires rapid electrification of the transport sector reaching a share of 2-12% by 2030 and 21-57% by 2050. All scenarios see a rapid decline in direct CO₂ emissions from the sector reaching 41-43 MtCO₂/yr by 2030 and 5-23 MtCO₂/yr by 2050 from the 2019 level of 63 MtCO₂/yr, mostly driven by high electrification rate of this sector and introduction of hydrogen and other biofuels in the fuel mix.

Final energy consumption in the transport sector is completely dominated by fossil fuels (98% in 2020), mostly oil. All scenarios except one show a declining trend of fossil energy demand from 2020. One of the scenarios is showing a fossil fuel phase-out from the transport sector in Malaysia by 2060.

The National Transport Policy (NTP) 2019-2030 which provides an overarching policy framework for the transport sector is not sufficient to support the required transformation of the sector, and the government would need to develop and implement more ambitious policies to drive emission reductions in the sector. The proposal aimed at increasing the uptake of electric vehicles by eliminating all taxes on EVs in Malaysia, including import and excise duties as well as road tax is a step in the right direction.15

Some studies have identified means for decarbonising the transport sector such as improving urban design, expanding rail networks, improving fuel efficiency, promoting the uptake of electric vehicles.9,11 Malaysia needs to adopt policies to deliver on its target for 100% EVs by 2030.10

1 The Edge Markets. Environment ministry to develop LT-LEDS for UNFCCC consideration. The Edge Markets. (2021).

2 Global Forest Watch. Malaysia Interactive Forest Map & Tree Cover Change Data. (2021).

3 WWF. Deforestation Fronts, Drivers and Responses in a Changing World. (WWF, 2021).

4 Malaysia Government. Report on Peninsular Malaysia Generation Development Plan 2020 (2021 – 2039). (2021).

5 IEA. Malaysia. International Energy Agency. (2021).

6 Ministry of Environment and Water. Malaysia Third Biennial Update Report to the UNFCCC. (2020).

7 Greenpeace. Southeast Asia Power Sector Scorecard.(2020).

8 British Malaysian Chamber of Commerce. BMCC Sector Report 2018/2019: Oil, Gas & Energy. (2018).

9 Susskind, L. et al. Breaking Out of Carbon Lock-In: Malaysia’s Path to Decarbonization. Front. Built Environ. 6, 21 (2020). doi:10.3389/fbuil.2020.00021/full

10 KeTTHA. Green Technology Master Plan Malaysia 2017-2030. (2017).

11 Mustapa, S. I. & Bekhet, H. A. Analysis of CO2 emissions reduction in the Malaysian transportation sector: An optimisation approach. Energy Policy 89, 171–183 (2016).

12 Shaikh, P. H. et al. Building energy for sustainable development in Malaysia: A review. Renew. Sustain. Energy Rev. 75, 1392–1403 (2017).

13 Suruhanjaya Tenaga (Energy Commission). Malaysia Energy Statistics Handbook 2019. (2019).

14 PIK. The PRIMAP-hist national historical emissions time series. (2021).

15 Lee, J. Affordable EVs in Malaysia – how cheap can electric cars be priced with zero import, excise and road tax? (2021).

16 Malaysia Government. Malaysia Third National Communication and Second Biennial Update Report to the UNFCCC. (2018).

17 Using Global Warming Potential AR4.

18 While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available; thus, we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches which developed countries will need to implement in order to counterbalance their remaining emissions and reach net zero GHG are not considered here due to data availability.

19 LULUCF emissions are projected to be -227 MtCO₂e in 2030 following a business-as-usual scenario reported in Malaysia’s Second Biennial Report.

20 As stated in the NDC. However, Malaysia participated in the Clean Development Mechanism and Voluntary Carbon Market, but these are not accounted as national mitigation actions as noted in the Biennial Report 3.

21 Fuel-efficient vehicles is defined as hybrid, electric vehicles and alternatively fuelled vehicles such as Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG), biodiesel, ethanol, hydrogen and fuel cell.

22 The total financial support required totals USD 71,900,000, in additional to technical and capacity building support.

23 In some of the analysed pathways, the energy sector assumes already a certain amount of carbon dioxide removal technologies, in this case bioenergy carbon capture and storage (BECCS).

Malaysiaʼs energy mix in the transport sector

petajoule per year

SSP1 Low CDR reliance
20192030204020501 000
SSP1 High CDR reliance
20192030204020501 000
Low energy demand
20192030204020501 000
High energy demand - Low CDR reliance
20192030204020501 000
  • Natural gas
  • Coal
  • Oil and e-fuels
  • Biofuel
  • Biogas
  • Biomass
  • Hydrogen
  • Electricity
  • Heat

Malaysiaʼs transport sector direct CO₂ emissions (of energy demand)


  • Historical emissions
  • SSP1 High CDR reliance
  • SSP1 Low CDR reliance
  • High energy demand - Low CDR reliance
  • Low energy demand

1.5°C compatible transport sector benchmarks

Direct CO₂ emissions and shares of electricity, biofuels and hydrogen in the transport final energy demand from illustrative 1.5°C pathways for Malaysia

Decarbonised transport sector by
Direct CO₂ emissions
41 to 43
21 to 29
5 to 23
2055 to 2068
Relative to reference year in %
−35 to −33%
−67 to −54%
−92 to −64%
Share of electricity
2 to 12
13 to 24
21 to 57
Share of biofuels
4 to 5
4 to 7
4 to 20
Share of hydrogen
1 to 17
19 to 51
30 to 63