Energy Efficiency and Conservation Bill tabled in Dewan Rakyat for first reading

• The EECA will require high energy consumers in the industrial and commercial segments to appoint a registered energy manager and conduct mandatory periodic energy audits.

KUALA LUMPUR (Oct 10): The Energy Efficiency and Conservation Bill 2023 (EECA), set to pave the way for effective management of energy demand and sustainable energy consumption of high energy-consuming industrial and commercial users, was tabled for first reading in Dewan Rakyat on Monday.

The Bill was tabled by Natural Resources, Environment and Climate Change (NRECC) Deputy Minister Datuk Seri Huang Tiong Sii. 

“The second reading will be done during the current meeting,” Huang told Dewan Rakyat, which is sitting for its third and final meeting of the year ― to span 32 days from Oct 9 to Nov 30.  

According to the NRECC, the EECA will require high energy consumers in the industrial and commercial segments to appoint a registered energy manager and conduct mandatory periodic energy audits.

Specifically, the proposed law regulates the heavy industrial and commercial users that consume 21,600 gigajoules (GJ) per annum ― equivalent to RM2.4 million in annual electricity bills or RM1 million in natural gas bills.

The EECA is set to cover 1,500 out of 2,700 industrial consumers, representing 70%-80% of industrial consumption, as well as 500 out of 1.7 million commercial consumers. 

The EECA will be enforced 12 months after it is gazetted, when then consumers have to conduct the first energy audit.  

Subsequently, consumers will have a five-year period (one cycle) to meet compliance requirements and will be levied with a penalty for non-compliance after the second audit. Penalties range from RM20,000 to RM100,000. 

The law also covers the compliance of buildings, in accordance with energy efficiency requirements.

Meanwhile, the average compliance cost ― covering the appointment of a registered energy manager, implementation of energy management, and energy audit ― for one cycle (five years)  stands at RM120,000 a year for affected industrial users, and RM100,000 for commercial users. 

Compliance is estimated to reduce electricity bills by up to 25%. Existing incentives to aid industrial players in adopting energy efficiency and conservation practices are Green Investment Tax Allowance, Green Income Tax Exemption, and Green Technology Financing Scheme. 

Using solar energy does not count as increasing efficiency under the EECA, as the law looks purely at consumption.

Looking to buy a home? Sign up for EdgeProp START and get exclusive rewards and vouchers for ANY home purchase in Malaysia (primary or subsale)!