Malaysia Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in Malaysia, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals.
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Renewable Energy
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Market Overview 

Malaysia has traditionally depended on fossil fuels and hydropower for power generation, with coal being a primary source.  As part of its international commitments, Malaysia has pledged a 45% reduction in economy-wide carbon intensity as measured against GDP by 2030. This includes a goal to completely retire coal-fired power plants by 2044. The government has further committed to achieving net zero greenhouse gas emissions by 2050 with renewable energy (RE) making up 70 percent of the total generation capacity. As part of the process, Malaysia is expected to expand its RE from 6 GW to 14 GW.  The state government of Sarawak has adopted the most ambitious climate initiatives among the Malaysian states by announcing targets to achieve over 70 percent RE use by 2030. 

The Energy Commission of Malaysia estimated a 20% demand growth for electricity in Malaysia in the next decade. This growth is driven by the semiconductor manufacturing and data center industries.  A recent influx of data center investments in Malaysia could increase electricity demand by up to 11 GW (about 40 percent of Peninsular Malaysia’s installed capacity). As these firms look to reduce their global carbon footprint, their operations will need electricity generated from RE sources.

Opportunities

Carbon Capture, Utilization and Storage

In March 2025, Malaysia passed its Carbon Capture, Utilization, and Storage (CCUS) Bill 2025. This legislation provides clarity for potential investments in new projects and could translate into favorable conditions for U.S. project developers and technology providers. Japan, South Korea, and Singapore have already expressed interest in exporting liquefied carbon emissions to Malaysia to be sequestered in offshore oil fields nearing their end of life. This emerging industry provides U.S. exporters with a strategic entry point into the broader Southeast Asian market. 

Battery Storage

The Malaysian government is planning to reach solar energy targets by expanding battery energy storage systems (BESSs) to 500MW by 2030. These battery energy storage systems will store excess energy generated by solar panels for later use. Market opportunities for U.S. companies exist for utility-scale battery storage systems and energy storage solutions for the power sector – mainly hydropower and solar power. 

Energy Efficiency & Digitalization

Many commercial and industrial buildings are adopting energy digitalization, with business owners looking to lower energy costs mainly through solar setups. Digitization can enable “smart” industrial facilities by providing for flexible sources for energy needs. Market opportunities for U.S. companies exist in cloud-based and Artificial Intelligence of Things (AIoT)-enabled source that connects energy data within the building and operations data in a single platform, converting data into business intelligence. 

 Smart Grids

Malaysia’s power utility operators are seeking ways to increase both the flexibility and the robustness of the national grid. This will be critical as more RE capacity comes online and more users buy and sell electricity off the grid. Malaysia is looking for solutions that ensure greater cost efficiency, reliability, and customer satisfaction than can be achieved with centralized grids. Market opportunities for U.S. companies exist for smart meters, grid technologies and systems, and transmission & distribution systems.  

Trade Events 

  • Int’l Greentech and Eco Products Exhibition and Conference Malaysia (IGEM)
  • Oil and Gas Asia Exhibition (Malaysia)
  • Energy Asia

Resources of Malaysian Government Authorities 

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