Malaysia Urged to Prioritize Green Shipping to Align With Global Environmental Standards

By Abbas Nazil

Malaysia is being urged to prioritize green shipping initiatives to remain competitive in the global maritime industry, which is increasingly focused on environmental sustainability.

Yuma Ito, a partner at Arthur D Little, Southeast Asia, emphasized that despite Malaysia’s strategic location along the Strait of Malacca, one of the world’s busiest shipping lanes, the country must align its regulations with international standards and adopt cleaner energy technologies to meet global green shipping demands.

He suggested that Port Klang, a key port along this vital sea route, could be developed into a hub for green fuel as the global shipping industry transitions toward reducing its environmental impact.

Green shipping involves the use of cleaner energy technologies on ships, sustainability-focused maritime organizations, green funds, and the development of hydrogen as an alternative energy source.

Ito stressed that embracing these trends is essential for Malaysia to maintain its relevance in the international maritime market.

He recommended that Malaysia develop targeted policies to encourage the adoption of cleaner fuels and green technologies, particularly in energy-efficient ports.

Strengthening legal frameworks to align with international standards, such as the International Maritime Organisation’s (IMO) Energy Efficiency Design Index and Carbon Intensity Indicator, is critical.

These frameworks provide mechanisms for reducing emissions from both new and existing vessels, which is vital for Malaysia to stay competitive globally.

The European Union’s (EU) FuelEU Maritime regulation, which requires ships calling at EU ports to transition to low-carbon and renewable fuels by 2025, highlights the urgency for Malaysia to adopt similar measures.

Ito emphasized that effective monitoring systems and compliance measures would help ensure market participants meet green shipping requirements.

He pointed to Singapore’s financial incentives, such as tax exemptions and green funds, as a model for driving investments in cleaner technologies and green systems.

Malaysia could also adopt initiatives like the Green Ship Programme, which incentivizes energy-efficient technologies in line with IMO goals.

However, challenges remain. Mohamed Safwan Othman, chairman of the Malaysia Shipowners’ Association (Masa), noted that the capital expenditure for green shipping is 30% higher than for traditional vessels.

He also highlighted that Malaysia’s financing rates for shipping are less competitive compared to neighboring countries like Singapore and Hong Kong, and green initiatives in Malaysia are relatively small-scale.

Despite these hurdles, Ito believes 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 is crucial, given the environmental challenges posed by Malaysia’s extensive coastline and marine resources.

Ito warned of risks such as oil spills and marine pollution, which could damage vital ecosystems like mangrove forests and coral reefs.

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

Sarawak’s hydrogen strategy aligns well with Malaysia’s green economy ambitions, particularly through the National Energy Transition Roadmap (NETR), which aims to establish a low-carbon hydrogen hub by 2030 and achieve 70% renewable energy capacity by 2050.

Sarawak’s Bintulu Port, Malaysia’s sole liquefied natural gas (LNG) export gateway, and the proposed Tanjung Embang deep-sea port project in Kuching, which will facilitate green hydrogen bunkering and LNG exports, further bolster this vision.

Ito noted that hydrogen, especially when derived from renewable sources like hydroelectric power, complements Malaysia’s NETR strategy and positions the country as a regional leader in hydrogen technology.

This could enhance Malaysia’s role in ASEAN’s integrated, sustainable power grid and open export opportunities for hydrogen technologies.

Malaysia’s maritime industry must embrace green shipping trends to remain competitive while addressing environmental challenges.

By aligning with international standards, adopting cleaner technologies, and leveraging its strategic location, Malaysia can position itself as a leader in sustainable maritime practices and contribute to global efforts to protect the environment.