Eliminating Fossil Fuel Subsidy Alone Not Enough To Transform Energy Landscape, Says Greentech

By Mohd Khairi Idham Amran & Harizah Hanim Mohamed KUALA LUMPUR, Nov 22 (Bernama) -- Not just the abolishment of fossil fuel subsidy but Malaysia also needs time and investment to transform its energy landscape to adopt clean energy, according to Malaysian Green Technology Corporation (GreenTech Malaysia). Group Chief Executive Officer, Ir Ahmad Hadri Haris, said realistically, it would require significant time and investment to completely transform Malaysia's current energy landscape but the country is heading in the right direction. "During this transition period, businesses must start explore ways to minimise energy consumption and incorporate the use of energy-efficiency systems and green energy in phases," he told Bernama. At a United Nations Climate Change Conference in Marrakech, Morocco last week, outgoing UN Secretary-General, Ban Ki-Moon, had called for all countries to eliminate fossil fuel subsidies to accelerate the transition to clean energy. Ahmad Hadri said GreenTech Malaysia viewed the UN proposal for fossil fuel subsidy abolishment positively as the move would encourage greater resource-consciousness and promote the adoption of green energy and technology. "Malaysia is very much aligned with this proposal, having since 2014, adopted a phased approach to fossil fuel subsidy removal. "For example, petrol subsidies and electricity tariff are already being adjusted to reflect market prices," he added. However, Ahmad Hadri said, the removal of fossil fuel subsidies needed to be carried out carefully to ensure that it would not overly burden the rakyat (people), with savings from the removal being channelled to prioritise initiatives that would directly improve the livelihoods of the lower income groups. "It needs to be pointed out that while the removal of fossil fuel subsidies is undoubtedly a good move, it still does not address the external cost of carbon emissions," he said. To holistically shift the country's energy landscape to one that is sustainable, he stressed the need for supportive regulatory frameworks and polices in place as well as attractive financing schemes and incentives to boost the growth of the green energy market. Among the examples, he pointed out to the rapid growth of the solar industry whose success was supported by the Renewable Energy Act 2011, Feed-in Tariffs and the recently-introduced Net Energy Metering programme. Earlier this year, the government has also introduced the Investment Tax Allowance (ITA) and Income Tax Exemption (ITE), enabling companies to claim tax allowances for the purchase of green technology equipment or assets and for green technology service providers to claim tax exemptions. Additionally, he said, GreenTech Malaysia advocated a shift towards sustainable mobility through increased use of electric vehicles (EVs) as well as facilitating the growth of the EV sector through the installation of over 100 ChargEV stations, GreenTech Malaysia's own network of charging station, to-date. An oil and gas analyst said a drastic change to non-fossil fuel energy consumption would be difficult considering the expensive cost of green energy infrastructure such as solar and hydro which would impact the livelihood of the people. "If the government is to remove the subsidy for power producing sector, it will make electricity more unaffordable, it will make the bills incredibly high," he said. However, he opined that the usage of natural gas could be considered as clean as it produced low carbon emission as compared to coal which generated more than 50 per cent of the country's electricity. "Natural gas, by definition, is still fossil fuel but when you burn natural gas, the carbon emission is extremely low and the sulphur emission is also extremely low. That is the beauty of natural gas," he said. Nevertheless, the current subdued oil and gas (O&G) market presented the government the chance to actively promote non-fossil clean energy with less impact to the revenue, he maintained. He said the government has reduced dependency on revenue contribution from the O&G's royalty and dividend, excluding taxes, to 11 per cent from over 33 per cent several years ago. Furthermore, he said, adoption of green energy would take time and the effect could only be felt after a certain year. "It’s like you don't expect people to shift overnight from fossil fuel vehicle to electric vehicle," he quipped. -- BERNAMA