Introduction

On 1 January 2025, the Energy Efficiency and Conservation Act (EECA) officially came into force in Malaysia.
The EECA aims to promote sustainable energy use and reduce environmental impact.
In particular, it imposes specific energy management standards and efficiency obligations on businesses that are large energy consumers.
Below we provide an overview of EECA, its impact on businesses, and specific steps you can take.

Background and Objectives of EECA

The Malaysian government has set a goal of achieving carbon neutrality by 2050.
To achieve this, concrete measures must be taken to reduce energy consumption and improve efficiency, and EECA was introduced as part of this effort.
According to government estimates, the implementation of EECA is expected to reduce energy consumption by 30% per year by 2030.
EECA aims to ensure that promoting energy efficiency increases the competitiveness of companies while at the same time contributing to sustainable economic growth at national level.
It is also an important policy for Malaysia to demonstrate leadership as part of international efforts to improve energy efficiency in the ASEAN region.

Significance of the implementation of EECA

EECA is much more than just regulation.
For companies, it is a guidepost on how to achieve sustainable growth and also a means to demonstrate environmental responsibility.
Specifically, the following effects are expected:

Strengthening international competitiveness

Energy efficiency directly leads to improved competitiveness of products and services. In an international market that places importance on environmental standards, initiatives based on EECA will improve the reputation of companies and increase their opportunities to enter new markets.

Reduce costs and increase revenue

More efficient energy use will lead to significant reductions in operating costs in the long term, and the provision of technologies and services related to energy efficiency is expected to create new revenue sources.

Contribution to local communities and the environment

EECA's efforts are also seen as contributions to the local community and environment in which the company resides, which will help to recognize the company's Corporate Social Responsibility (CSR) activities and improve the company's brand image.

Improving sustainability throughout the supply chain

Compliance with EECA contributes to improving efficiency and reducing the environmental impact throughout the supply chain. In particular, for companies with global operations, cooperation with suppliers to improve energy efficiency is an important factor in establishing a competitive advantage.

Main requirements of EECA

EECA sets out the following obligations for companies above certain energy consumption thresholds:

Appointment of Energy Manager

In order to promote the establishment of an energy management system, companies that consume a certain amount of energy or more are required to appoint a Registered Energy Manager (REM). The main role of the REM is to collect and analyze energy consumption data, develop and implement efficiency improvement plans, and prepare annual reports. They are also responsible for employee education and responding to external audits. This appointment plays an important role that is directly linked to improving energy efficiency, especially in manufacturing industries and large facilities.

Energy Management System (EMS)")

Companies should establish an EMS based on the international standard ISO 50001 and continually pursue improvements in energy efficiency.
The system not only increases the transparency of a company's energy usage, but also contributes to reducing operational costs and the environmental impact. During the implementation process, the energy consumption patterns of existing facilities are analyzed and specific measures to minimize waste are developed.

Submitting an annual energy efficiency report

Companies are required to submit annual energy efficiency reports to the Energy Commission.
The report will include energy consumption, reduction efforts and future efficiency plans.
Producing detailed reports requires the use of data collection tools and analysis software, and requires the involvement of personnel with specialized knowledge.

Conducting regular energy audits

In order to objectively evaluate energy usage and seek further improvements, energy audits must be conducted every five years and the results must be submitted.
The audit will identify energy waste and provide specific suggestions for efficiency improvements.Furthermore, investment plans based on the audit results will directly lead to long-term cost reductions and reduced environmental impact.

Impact on Japanese companies

The implementation of EECA is likely to have an impact on Japanese companies as well.
First, as mentioned above, there are initial costs involved, such as appointing an energy manager and implementing an energy management system.
In addition, it will likely be necessary to secure specialized personnel to handle annual energy efficiency reports and audits.
In particular, in the manufacturing industry, there are many cases where equipment updates and process improvements are required, and initial investment can be a burden.

However, these obligations may lead to cost savings and increased competitiveness in the long run.
For example, in manufacturing, improved energy efficiency can reduce operating costs and improve customer satisfaction with environmentally conscious customers.
It is also expected to enhance competitiveness in an international market that places a premium on sustainability. For companies seeking new business opportunities related to green energy, EECA is likely to offer benefits that outweigh the burden of complying with the regulations.

Specific measures

Early appointment of an energy manager

It will be important to appoint a qualified energy manager early and strengthen internal energy management capabilities.
In particular, they will be required to educate existing employees and supplement their expertise with external training programs.

Setting up an EMS implementation project

It is necessary to set up an EMS that is in line with ISO 50001 standards and establish its operation within the company.
This is expected to increase transparency and efficiency in energy usage.

Use of external consultants

By utilizing consultants who specialize in energy management to receive expert advice, it is believed that compliance with regulations can be achieved quickly and effectively.
This is expected to reduce the risk of initial investment and realize effective improvement measures.