In a major Cabinet reshuffle, the Malaysian government has established a new energy transition and public utilities ministry, carving the energy portfolio out from what used to be its environment ministry, which some observers say potentially signal the country’s attention to its pressing need to meet targets under a national roadmap.
Fadillah Yusof, currently one of Malaysia’s two deputy prime ministers, will lead the new ministry. The Sarawak-born veteran politician will also take up a post as minister-in-charge for the states of Sabah and Sarawak.
The split of the former ministry of natural resources, environment and climate change (NRECC) into two separate ministries, one of the key revamps to Malaysia’s Cabinet line-up, was announced by Prime Minister Anwar Ibrahim on Tuesday. The move also sees the term “climate change” being dropped; the new ministry of natural resources and environmental sustainability will continue to be led by Nik Nazmi Nik Ahmad.
“If the [new ministers] perform well and there are no external pressures or problems, I don’t think there will be any further changes in the coming four years until the next election,” said Anwar, who is also Malaysia’s finance minister.
The decision to manage the environment and energy portfolios under separate ministries comes just over a year after the two portfolios were combined under NRECC. They were first combined in 2020 during the leadership of former prime minister Dr Mahathir Mohamad, but under the leadership of Anwar’s predecessor, Ismail Sabri Yaakob, the portfolio had been divided between the ministry of environment and water, and the ministry of energy and natural resources.
“Energy transition and environmental sustainability are closely intertwined, but both scopes cover very critical and wide-ranging responsibilities in their own right,” said Dhana Raj Markandu, senior analyst at the Institute of Strategic & International Studies Malaysia. He believes the split will enable each portfolio to receive greater attention, accelerating the progress of crucial initiatives to address climate change.
“Perhaps the (energy transition and public utilities ministry) may end up focusing more on mitigation actions and the (natural resources and environmental sustainability ministry) on adaptation,” Markandu told Eco-Business.
Others responded to the Cabinet reshuffle with doubt. Muaz Mohd Hasnol, climate and sustainability-focused management consultant at Boston Consulting Group in Malaysia, wrote in a post on X that he was “not sure what to feel” about climate change being dropped from the ministry’s name but hoped that combatting climate change remains a priority.
“(I) have always thought having the words ‘climate change’ in a Ministry, at the minimum, signals to people, investors, and other governments that it is high on the agenda of the government,” wrote Muaz, who also officially represented the non-profit youth leadership organisation, Perdana Fellows Alumni Association, on the climate change consultation panel established by NRECC in September.
During his tenure as NRECC minister, Nik Nazmi announced the lifting of Malaysia’s renewable energy ban and NRECC was one of three ministries involved in the development of the country’s National Energy Transition Roadmap (NETR), which is currently led by the ministry of economy.
It is still unclear whether the National Energy Transition Roadmap, which has been under the Ministry of Economy since its launch in late August, will fall under the purview of the new energy transition ministry. Markandu hopes details will be forthcoming. “As NETR has been touted as a “living document”, I’m looking forward to a new edition that updates the identified champions after the cabinet reshuffle,” he said.
Nik Nazmi also recently tabled the Energy Efficiency and Conservation Bill, which was passed by the Lower House of Malaysia’s Parliament, but had met with opposition from Sarawakian senators. Unlike other states in Malaysia, Sarawak has maintained autonomy over its electricity supply and distribution. The bill’s second reading in the Upper House was delayed after the eight senators requested amendments to the act.
Sarawak’s green ambitions
The new minister of energy transition, Fadillah,has been member of parliament for Petra Jaya, a constituency next to the state’s capital of Kuching, for almost 20 years. He first began his tenure in government as minister of works in 2013, and previously oversaw the ministry of plantation industries and commodities.
Sarawak’s state government has been actively promoting the development of renewable energy and carbon credits, including the potential export of clean energy to Singapore and the development of hydrogen. Most recently, state utilities provider Sarawak Energy signed an agreement with carbon market operator Bursa Carbon Exchange to explore the offering of hydropower-related renewable energy certificiates on the carbon marketplace.
“Having the energy transition portfolio now helmed by a deputy prime minister who is also responsible for matters related to Sarawak and Sabah will provide a new level of synergy and facilitate greater alignment of development across all the regions, in line with the whole-of-nation approach that NETR is based upon,” said Markandu.
Earlier this month, Sarawak became the first and only state in Malaysia to have passed a climate change bill, named the Environment (Reduction of Greenhouse Gasses Emission) Bill. Under the bill, which was sighted by Eco-Business, businesses are required to report their greenhouse gas emissions and may be subjected to a carbon levy if they exceed the state-determined threshold for emissions without an adequate plan to decarbonise. Failure to comply with emissions reporting requirements are subject to a fine not exceeding 50,000 ringgit (US$10,625), imprisonment of up to one year or both.
The climate change bill also provides for the development of carbon credits in the state and provides the Sarawak government with emissions-related powers over the state’s petroleum-related activities. It prohibits the flaring or venting of petroleum or greenhouse gasses in Sarawak, whether on shore or offshore, without consent from the state’s environmental controller.
The oversight of petroleum-related emissions is significant as Sarawak is one of Malaysia’s biggest oil producing states and home to ongoing oil exploration and development activities. This year alone, Malaysian state oil company Petronas said that its contractors had recorded 19 exploration discoveries and two exploration-appraisal successes in the country, contributing over 1 billion barrels of oil equivalent. More than half of the discoveries were made in the Sarawak Basin.
However, the state has a long history of protests by its Indigenous Peoples over deforestation and land rights, some of which has been related to the development of large-scale hydropower. At a mock tribunal hosted earlier this year, both local Indigenous leaders accused the state government of having failed them when unscrupulous logging threatened their livelihoods.
The expansion of oil and gas activities in Malaysia has also been criticised, with a report by non-governmental organisation Global Energy Monitor alleging that Malaysian oil fields awaiting their final investments risks the global temperature increasing the climate-critical 1.5-degree Celsis limit. This includes discoveries of oil deposits in Sarawakian waters.