MALAYSIA MUST PRIORITISE GREEN SHIPPING AS GLOBAL MARITIME INDUSTRY LEANS TOWARDS PROTECTING ENVIRONMENT - CONSULTANT

By Harizah Hanim Mohamed

KUALA LUMPUR, March 9 (Bernama) – Malaysia should embrace and prioritise green shipping trends to remain relevant despite its strategic advantage along the Strait of Malacca, a global management consultant said.

For starters, Port Klang, situated along the vital sea lane, could be developed as a hub for green fuel as global shipping transforms to minimise the impact of maritime operations on the environment, Yuma Ito, a partner with Arthur D Little, Southeast Asia, said.

Green shipping features include cleaner energy technologies on ships, maritime organisations prioritising sustainability, green funds and the development hydrogen as an alternative energy source.

This would go a long way in ensuring that Malaysia remains relevant in the international maritime market while meeting green shipping demands, he told Bernama.

Arthur D Little is a global management consulting firm with 51 offices across 39 countries.

He said Malaysia could also develop targeted policies to increase the adoption of cleaner fuels and green technologies based on energy-efficient port requirements.

“Concentrate on strengthening legal frameworks by considering alignment with international standards.”

To this end, Malaysia should ensure its regulations align with international standards such as the International Maritime Organisation's (IMO) Energy Efficiency Design Index and Carbon Intensity Indicator, said Ito.

These frameworks offer emission reduction mechanisms for both new and existing vessels, he said.

This is crucial for Malaysia to stay relevant in the global market.

It is worth noting that the European Union (EU) had implemented the FuelEU Maritime regulation, which mandates that ships calling at EU ports must gradually transition to using low-carbon and renewable fuels, essentially requiring them to use "green fuel," starting fully on Jan 1, 2025.

This aims to decarbonise the maritime sector by promoting cleaner energy technologies on ships. 

“Effective implementation of monitoring systems and reasonable compliance measures can help ensure that market participants are confident in meeting green shipping requirements.

“One area that Malaysia can emulate is Green Ship Programme, which incentivises energy-efficient technologies in alignment with the IMO goals,” he said.

Ito also said that adopting similar policy changes, Malaysia can encourage maritime organisations to prioritise sustainability.

“Financial incentives such as tax exemptions and green funds, as demonstrated by Singapore, can drive investments in cleaner technologies and green systems,” he said.

Previously, Malaysia Shipowners' Association (MASA) chairman Mohamed Safwan Othman said capital expenditure for green shipping is 30 per cent higher than that for traditional vessels.

Mohamed Safwan added that Malaysia’s shipping industry is capital-intensive and the financing rates for shipping in Malaysia are not competitive compared to neighbouring countries like Singapore and Hong Kong.

“Green initiatives in Malaysia are relatively small in scale compared to neighbouring countries. Looking at private equity as an alternative, it is here that it is not as developed as in those countries,” Mohamed Safwan said.

Ito said Malaysia’s strategic location along the Strait of Malacca presents significant opportunities for attracting foreign direct investment (FDI) and testing innovative green shipping solutions.

Balancing maritime growth with environmental responsibility

Ito highlighted that Peninsular Malaysia’s strategic location along one of the world’s busiest shipping lanes offers a key advantage in maritime trade but cautioned that it also brings environmental challenges, making it crucial to balance economic growth with conservation to sustain Malaysia’s marine resources.

“These include the potential for oil spills and other types of marine pollution, which risk damage to important marine ecosystems like mangrove forests, coral reefs and other marine life.

He emphasised that Malaysia’s extensive coastline and marine resources are not only economically significant but also central to its history and cultural identity as a maritime nation.

Sarawak hydrogen bodes well for Malaysia’s green economy ambition 

Through the National Energy Transition Roadmap (NETR), Malaysia aims to establish its first low-carbon hydrogen hub by 2030, and it is part of a broader strategy to achieve 70 per cent renewable energy capacity by 2050, positioning Malaysia as a leader in the regional and global green hydrogen market.

Sarawak’s hydrogen strategy bodes well for the country’s ambition, particularly with Bintulu Port being Malaysia’s sole liquified natural gas (LNG) export gateway.

Sarawak Premier Tan Sri Abang Johari Tun Openg had announced in January a multi-billion Tanjung Embang deepsea port project in Kuching to serve as a strategic gateway for energy exports and imports.

Abang Johari said  this port will facilitate green hydrogen bunkering, LNG exports and other energy resources.

Commenting on the development of Sarawak’s hydrogen project, Ito said hydrogen aligns with Malaysia's national emission goals, offering a versatile, carbon-neutral solution for sectors such as power generation and heavy transport.

“When developed from renewable sources like hydroelectric power, it complements the country’s NETR strategy,” he said.

Ito pointed out that Malaysia would position itself as first mover in hydrogen, with Sarawak further strengthening the country’s leadership in ASEAN.

“This enhances Malaysia’s potential as a dominant hydrogen supplier in the region, contributing to ASEAN's vision of an integrated, sustainable power grid. Malaysia can guide the region in adopting hydrogen technologies and foster cooperation to meet collective climate goals,” he said.

Ito said this would provide a springboard for research and development on hydrogen technologies and open export opportunities for Malaysia.

-- BERNAMA