“The whole idea behind the NETR was because of my trip to Japan for the launch of the Asia Zero Emission Community.
“While I was there, I could feel how Malaysia was bypassed by everyone there. While they acknowledged that our country has potential, they still preferred other countries, as there were no significant developments in Malaysia.
“Matters related to environmental, social and governance, climate change and green compliance are extremely important to investors all over the world.
“If investors from New York, Japan or London are not confident of our resolve towards achieving the net-zero target we set forth, and at the same time we do not demonstrate a comprehensive plan, they will bypass us and they have bypassed us,” he said during the Energy Transition Conference yesterday.
As such, Rafizi said the NETR is a validation of the present administration’s approach and that it is important to pitch the right sector with the right determination to get the early conviction of the international communities.
“It is a competitive market, where investors have to decide where to put their money. Unless we jump to be noticed, we will be bypassed. I think the validation we have in the last few months is in which we pull our efforts together.
“It takes a one nation approach to provide clarity in terms of a robust policy framework. When we put our initial money where our mouth is, then we will see more funds and investments coming into Malaysia,” he said.
Rafizi also did not rule out the role for nuclear in the energy mix for the country’s energy transition target. However, he added for now such plans will not be rolled out within the next five years.
“I think it will happen in due time. Of course we look at the planning and the numbers as we go along, but typically, any major pivots especially on something like nuclear is something that we have to bring throughout the whole government,” he said.
Rafizi noted that in managing the energy trilemma – security, sustainability and affordability – the government does not have the leisure to rule out anything.
On this note, Natural Resources, Environment and Climate Change Minister Nik Nazmi Nik Ahmad said it was unfortunate many good research institutions with regards to nuclear in the country have closed down.
“Because if we know anything about nuclear, the moment you say ‘yes’, it will take many, many years for it to come to fruition and you need that expertise and skill set.
“While it is not a green light on nuclear energy, we are considering it because it has zero carbon emissions.
“Obviously, there are security and safety concerns from the public and we totally accept that. However, with changing technologies like the small modular reactor, it is something that we cannot rule out totally,” he said.
Divided into two parts, part one of the NETR was launched in July and outlined 10 flagship catalyst projects and impact initiatives based on six energy transition levers, namely, energy efficiency, renewable energy, hydrogen, bioenergy, green mobility, and carbon capture, utilisation and storage or CCUS.
Five enablers – financing and investment, policy and regulation, human capital and just transition, technology and infrastructure as well as governance and implementation – further support the six levers.
Part two, which was unveiled by Prime Minister Datuk Seri Anwar Ibrahim yesterday, focuses on establishing the energy mix, GHG emissions reduction pathway, along with selected targets and initiatives.
In order to develop the talent, technology and infrastructure needed to scale-up and sustain decarbonisation efforts, targeted investments, people strategies and international cooperation planning as well as policy and regulatory frameworks, will be bolstered.
Anwar also announced that the government will allocate RM2bil as seed fund for NETR to enable catalytic blended finance.
He said this in turn will ensure a seamless flow of financial resources towards energy transition projects that are marginally bankable or yielding below-market returns.
“Considering Malaysia’s current state of immature decarbonisation technologies, our progress will significantly hinge on alternative energy sources and robust regional and international collaboration.
Rafizi said the strategy set forth in the NETR does not come from an imagined ideal state of the world or what leading countries are doing but it is a realistic view of Malaysia’s strengths, and a pragmatic view of what needs to be done to grow.
“The first step was to set stretched targets so that the slight discomfort could drive creativity and innovation in reaching them. By 2050, we are stretching the RE installed capacity target to 70%, energy efficiency savings target to 22%, and electric vehicle penetration to 80%,” he said.
Rafizi said despite stretching these targets, which he admits have become very ambitious goals, there are still some gaps in regards to the country’s net zero commitment.
“We still have some gaps to close, at least on paper. But targets are targets. We can have very nice targets on paper, but without building the capability and getting the ball rolling, the gaps will get bigger and bigger as we move on. I hope the industry, the society and our international partners appreciate that it does take a lot of guts for this administration to admit that we still have some gaps for our net zero commitment.
“If we were to lead regionally and we build the reputation, investments will come, capabilities will come and that will allow us to close the gaps as we move towards 2050. To sit on our laurels and expect plan after plan to close the gaps, but never get started, is a sure way for us to miss our 2050 net zero commitment,” he said.
Rafizi said the government’s focus in the next five years is on building the necessary capacity to realise the targets iof NETR, by aligning the mid- and short-term action on the ground not just in terms of energy policy, but with all the other macro policies.
“Those are usually the more difficult ones: in terms of how we look at subsidies, how we align growth in different areas of the countries, and the upskilling of the nation states.
“We will make sure the governance is done properly, and NETR projects, for example, the 10 catalytic projects, will proceed as planned and will be monitored at the National Energy Council. We will switch to project management mode for the next five to 10 years to meet all those objectives,” he said.
NETR is expected to uplift the gross domestic product by 10% to 15% from market-creating products that are high-growth and high-value (HGHV). Some 350,000 jobs are also expected to be created in the HGHV sectors across the country and, 70% of the income gains will flow to low- and medium-income households.
“In order to realise these economic gains for the country, there are three critical structures that will become the bedrock to the NETR ambitions. We need strong governance, substantial financing, and a credible and transparent exchange system. These cornerstone structures carry with them critical multipliers that could accelerate growth,” Rafizi said.
See also page 7