Malaysia’s energy-intensive industries are accelerating investment in digital technologies and renewables as they prepare for a low-carbon future, according to new research from ABB.
To continue reading, subscribe to Eco‑Business.
There's something for everyone. We offer a range of subscription plans.
- Access our stories and receive our Insights Weekly newsletter with the free EB Member plan.
- Unlock unlimited access to our content and archive with EB Circle.
- Publish your content with EB Premium.
The Asia Pacific Energy Transition Readiness Index 2025 shows that over 70 per cent of Malaysian organisations are directing more than 10 per cent of their capital expenditure toward energy-transition initiatives.
The survey, which gathered responses from over 4,000 business leaders across 12 markets, indicates that companies in Malaysia increasingly view the transition not as a compliance burden but “as a strategic investment in long-term competitiveness”.
Digitalisation emerged as the top investment priority among Malaysian respondents at 42 per cent, outpacing the Asia Pacific average of 38 per cent. Automation and electrification followed at 33 per cent and 26 per cent, respectively.
“This highlights the country’s focus on leveraging technology to accelerate decarbonisation and support operational efficiency,” the survey reported.
The readiness to embrace advanced technologies is further reflected in the finding that 71 per cent of Malaysian organisations consider artificial intelligence (AI) and automation critical to enabling the energy transition. ABB’s analysis also noted that AI can strengthen energy-management systems, support the development of smart grids, and improve interoperability across energy infrastructure.
Abhinav Harikumar, vice president of ABB’s Energy Industries division, Southeast Asia, said as Malaysia’s energy transition progresses, automation, digitalisation, and AI solutions will play a significant role in improving energy efficiency, streamlining complex operations, and supporting consistent, reliable performance.
Growing digital integration also brings increased cyber security demands. According to the index, 93 per cent of Malaysian organisations report being prepared to safeguard operational technology systems, reflecting a strong awareness that trust in the transition depends on digital resilience.
The study also highlighted several areas where stronger collaboration could accelerate progress. One quarter of respondents identified public-private partnerships as an untapped opportunity, while nearly three-quarters called for enhanced government incentives. 61 per cent said greater cross-regional cooperation on grid infrastructure is needed, and more than half urged increased private-sector participation.
On the renewable-energy front, 78 per cent of Malaysian organisations expect to increase their consumption of renewable power by more than 20 per cent within five years.
Solar remains the most widely adopted renewable source, already used by 70 per cent of companies surveyed. Other key emerging sources include hydropower (54 per cent), green hydrogen (45 per cent) and wind energy (44 per cent). This traction aligns with Malaysia’s National Energy Transition Roadmap, which targets a 70 per cent renewable share in the power mix by 2050.
The research, conducted between May and June 2025, underscores Asia Pacific’s growing commitment to energy transition efforts. ABB noted that unlocking the region’s full potential will require tighter alignment between investment strategies and transition needs, faster uptake of emerging technologies, and deeper collaboration across sectors.
While 71 per cent of survey respondents believe AI and automation will accelerate the energy transition, a different reality is unfolding on the ground. The rapid scale-up of data centres, driven largely by AI demand, is placing pressure on local electricity grids and water resources, particularly in Johor.
Last week, investors in the state were asked to delay new water-cooled expansion projects for at least 18 months, as state authorities confront drought conditions and intensifying strain on Johor’s water supply. The temporary pause applies to developers whose facilities rely on water-based cooling systems to keep round-the-clock servers running.
Officials say the measure reflects rising concern among communities and environmental groups that the surge in billion-dollar tech investments is increasingly colliding with basic resource needs.
Johor already hosts 15 operational data centres, with many more in various stages of development. Government estimates show that cooling these facilities requires roughly 675 million cubic metres of water per day, a level that has sharpened scrutiny of how Malaysia can balance digital ambitions with resource security.
