Malaysia's Bold Leap: From Grey to Blue Hydrogen by 2030

2024-11-30 industry

Kuala Lumpur, Saturday, 30 November 2024.
In an ambitious clean energy pivot, Malaysia plans to produce two million tonnes of blue hydrogen annually by 2030, replacing polluting grey hydrogen. With projected revenues of $203 billion by 2050, this transition promises to revolutionise the nation’s metal, steel, and ammonia industries while marking a crucial stepping stone towards eventual green hydrogen dominance.

A Strategic Shift

Malaysia’s decision to focus on blue hydrogen over green hydrogen until 2030 marks a strategic pivot in its energy policy. The Minister of Science, Technology and Innovation, Chang Lih Kang, has highlighted the importance of blue hydrogen for industries such as metal, steel, and oil refining[1]. This move not only aims to reduce carbon emissions by utilising existing fossil fuel infrastructure but also involves carbon capture technologies to mitigate environmental impact[2].

Economic Implications

The potential economic benefits of this hydrogen transition are significant. With projections of reaching over RM 905 billion ($203 billion) by 2050, Malaysia is setting a firm foundation for a booming hydrogen economy[1]. The country’s Economy and Technology Roadmap (HETR) suggests that hydrogen will be cheaper than diesel by mid-century, prompting a shift in energy subsidies towards renewables like hydrogen[3]. This economic foresight is accompanied by plans to support job creation and infrastructure development across the hydrogen supply chain[4].

Innovation and Infrastructure

To support this ambitious hydrogen agenda, Malaysia is investing in infrastructure and innovation. Plans are underway for a 10 GW green hydrogen production facility in Sabah, aiming to produce over 250,000 tonnes of green hydrogen annually[1]. Collaborations with international partners and industry leaders are key components of this strategy, fostering technological advancements and expertise sharing[4].

Navigating Challenges

While the path to blue hydrogen is paved with potential, it is not without challenges. The transition involves significant investment in technology and infrastructure, requiring substantial public and private sector collaboration. Financing mechanisms such as low-interest loans and public-private partnerships are being explored to support these initiatives[5]. Moreover, the cost of hydrogen production currently exceeds that of unsubsidised fossil fuels, underscoring the need for strategic subsidies and tax exemptions to make hydrogen economically viable[6].

Looking Ahead

As Malaysia embarks on this hydrogen journey, the focus remains on aligning with international climate goals and reducing greenhouse gas emissions. The transition to blue hydrogen is a stepping stone towards a greener future, setting the stage for green hydrogen to eventually take centre stage. By 2050, Malaysia aims to not only be a leader in hydrogen production but also a key player in the global hydrogen market, contributing significantly to the Asia Pacific’s renewable energy landscape[2].

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blue hydrogen Malaysia energy policy