Malaysian companies told to get ready to comply with Energy Efficiency and Conservation Act 2024

PETALING JAYA: Malaysian companies must brace for stricter compliance requirements when the newly approved Energy Efficiency and Conservation Act 2024 (EECA) – which expands the scope of current laws – is implemented, said Malaysian Association of Registered Electrical Energy Managers president Zaini Abdul Wahab (pic).

He noted that while multinational companies, especially those from the United States, the European Union and Japan, are well-prepared, local companies may struggle to adapt.

The EECA is aimed at regulating energy consumption and promoting energy conservation across various sectors. It sets out guidelines, standards and regulations to ensure sustainable energy use in Malaysia. The official date of enforcement has not yet been determined.

“Many Malaysian companies only meet the minimum requirements to avoid trouble with the authorities, but the new Act demands much more – including mandatory energy audits and comprehensive energy management systems. Only 25% to 30% of Malaysian companies are expected to be ready when the new law takes effect,” he told SunBiz.

The compliance rate under the current law exceeds 70%, but Zaini said this figure reflects adherence to minimum requirements and cannot be directly compared to the new standards. He estimates that around 3,000 companies will be affected, up from the current 1,800. “If 25%-30% of companies are prepared under the new Act, that would already be a positive start,” he said.

Zaini highlighted that even large government-linked companies are often unprepared because energy management has not been a core focus for them. He said that while some GLCs have sustainability programmes, most lack comprehensive energy management systems.

Currently, Malaysia has only about 50-60 companies certified under ISO 50001, compared to over 400 in Thailand. This a standard for improving, effective and sustainable use of energy resources through an energy management system.

“Most certified companies here are multinationals because of corporate mandates, not local initiatives,” Zaini explained.

He said compliance is often driven by market requirements, such as the need for carbon footprint information for products exported to Europe. “Failure to comply will impact business potential, reputation, and market access.”

The EECA introduces changes including mandatory energy audits every five years and the inclusion of thermal energy – such as fuel, gas, and chilled water, in addition to electricity.

The Act also requires companies to establish energy management systems, including creating an energy policy, forming an energy management committee, and setting targets, guided by standards such as ISO 50001.

Zaini reckoned that achieving 50% compliance within three years of enforcement would be a significant milestone. “From my experience, it takes time for companies to align with new laws and reach even the minimum requirements,” he said.

Zaini stressed the importance of enforcement by the Energy Commission and the readiness of key players such as energy managers. “If a company hires an energy manager who lacks the necessary skills, such as developing an effective energy management system, compliance won’t be achieved,” he said.

The new Act provides clearer guidelines for the roles of energy managers and auditors, making enforcement easier for the commission and compliance more straightforward for companies.