Malaysia is being urged to prioritize green shipping to remain competitive in the global maritime industry as international regulations increasingly push for sustainability. Despite its strategic location along the Strait of Malacca, the country risks falling behind without proactive investments in cleaner shipping technologies, alternative fuels, and regulatory alignment with international standards. 

Experts emphasize that Port Klang could serve as a hub for green fuel, given its position on a key global trade route. Developing cleaner maritime technologies, incentivizing sustainability in shipping, and adopting frameworks like the International Maritime Organization’s (IMO) Energy Efficiency Design Index and Carbon Intensity Indicator will help Malaysia stay relevant. These regulations provide clear emissions reduction mechanisms for both new and existing vessels, a crucial step as the EU’s FuelEU Maritime regulation will soon require ships docking at EU ports to transition to low-carbon and renewable fuels by 2025. 

According to Yuma Ito, a partner at Arthur D Little Southeast Asia, Malaysia should introduce financial incentives similar to Singapore, such as tax exemptions and green funds, to encourage investments in cleaner shipping technologies. He also suggested emulating Green Ship Programs to promote energy-efficient vessels aligned with IMO sustainability targets. However, challenges remain. Capital expenditure for green shipping is around 30% higher than traditional vessels, and Malaysia’s shipping industry faces higher financing rates compared to Singapore and Hong Kong. 

Beyond maritime sustainability, Malaysia is advancing its green hydrogen economy through the National Energy Transition Roadmap (NETR). The country aims to establish its first low-carbon hydrogen hub by 2030, targeting 70% renewable energy capacity by 2050. Sarawak, in particular, is positioning itself as a regional leader in green hydrogen, with the Bintulu Port serving as Malaysia’s key LNG export gateway. The planned Tanjung Embang deep-sea port project in Kuching is expected to support hydrogen bunkering, LNG exports, and energy resource trade, reinforcing Malaysia’s ambition to lead ASEAN’s clean energy transition. 

Malaysia’s commitment to ESG principles and carbon-neutral strategies is critical for attracting foreign direct investment (FDI) and ensuring long-term economic and environmental sustainability. By enhancing green shipping policies and leveraging hydrogen as a carbon-neutral energy source, Malaysia can strengthen its role in the global green economy while balancing economic growth with environmental responsibility. 

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