KUALA LUMPUR: Effective action from all stakeholders, coupled with strong government leadership, is crucial for Malaysia to achieve net-zero greenhouse gas (GHG) emissions as early as 2050, said RHB Investment Bank Bhd (RHB Research).
The firm said the government must implement coherent, progressive, and effective green policies and enablers in collaboration with the private sector including civil society.
It noted that Malaysia has implemented various supporting measures, such as the introduction of carbon pricing and the commitment to stop building new coal power plants.
"Multilateral support on climate finance and funding, capability and capacity development, and technology transfer from developed countries also represent key enablers to achieve net zero," it said in a note.
Malaysia's fuel combustion in transport currently accounts for around 21 per cent of national greenhouse gas (GHG) emissions, making it the second-largest industry in terms of emissions.
According to World Wide Fund for Nature (WWF) Malaysia, there are 10 large-scale priorities which are crucial for Malaysia.
RHB Research said these priorities will need to be acted on in a timely and coherent manner in order to unlock socioeconomic benefits associated with the net zero pathway.
"As highlighted, accelerate low carbon transportation is the third priority for the country. This includes scaling up public transport infrastructure and shared mobility solutions, facilitate electric vehicle (EV) penetration with a vibrant local EV manufacturing and supply chain industry and timely charging infrastructure roll-out," it said.
Additionally, the firm emphasised that Malaysia should prioritise enhancing fuel economy standards and adopting sustainable biofuels and other emerging zero-carbon fuels in heavy transport, aviation, and maritime sectors.
It added that these measures are crucial for establishing a low-carbon transportation sector.
Meanwhile, RHB Research said decarbonisation of the marine transport sector presents an opportunity for Malaysia to position itself as a green fuel bunkering hub since Malaysia's ports account for 24 per cent to 26 per cent of annual container throughput within Asean.
It noted that this sector currently employs a combination of two primary fuel categories—diesel and fuel oil.
"Fuel oil can be additionally categorised into variants such as high sulphur fuel oil (HSFO), low sulphur fuel oil (LSFO), and other distillates including marine gas oil (MGO).
"Nevertheless, the progression of Malaysia's marine transport towards green mobility has encountered several challenges concerning the availability of more sustainable fuel alternatives," it said.
On the aviation sector, RHB Research said fuel switching to cleaner energy sources will likely gain momentum.
This includes next generation biofuels or synthetic fuels, and potentially to even more nascent technologies, such as electric or hydrogen planes.
For light road transport, RHB Research highlighted that shifting from internal combustion engine (ICE) vehicles to EVs, powered by clean energy sources, is crucial for Malaysia's net zero goals.
On heavy road transport, the firm noted that advancements in technology could significantly enhance fuel efficiency in heavy vehicles, leading to substantial emissions reductions.