Malaysia is one of the largest oil and gas producers in the Asia-Pacific region and was the world’s fifth biggest exporter of LNG in 2023.

Malaysia uses fossil fuels for more than 91% of its energy and, despite its natural resources, has increasingly relied on imported coal over the past 10 years in electricity generation. While Malaysia’s domestic coal industry is small, coal accounted for more than 43% of Malaysia’s electricity in 2023, compared to natural gas at 37% and hydropower at nearly 17%.

The National Energy Transition Roadmap, announced by Prime Minister Anwar Ibrahim in mid-2023, would significantly change that mix. In outlining a path to net zero in 2050, the roadmap identifies a critical role for gas in replacing coal-fired power generation and supporting significant investment in renewable energy.

Malaysia’s Energy Mix

Indeed, gas is viewed as “not only a transitional fuel” but one that would account for 56% of Malaysia’s total energy supply in 2050. Gas would comprise 29% of installed capacity for electricity generation at that time, with coal phased out and renewable energy making up the lion’s share at 70%.

The roadmap also points towards contributions from hydrogen (both blue and green), ammonia (including as a co-firing agent) and carbon capture, utilisation and storage (CCUS), which would be used to reduce emissions from both the electricity sector and industry.

Electricity Sources

Malaysia's energy & climate goals in brief

  • 2050 net zero target
  • Major producer of both oil and gas
  • Gas earmarked for key role in energy transition
  • Strong ambitions to become a CCS hub

Malaysia’s Energy Policy

The Energy Transition Roadmap builds on a National Energy Policy 2022-2040, published in September 2022, which established a series of Low Carbon National Aspirations.

While hydropower has a long-standing supporting role in Malaysia’s energy system, its vast solar potential is largely untapped. Less than 2% of Malaysia’s electricity in 2023 came from solar and the Energy Transition Roadmap points to a variety of policy initiatives that could see photovoltaic installed capacity grow to 58% by 2050. Possible measures include the removal of regulatory barriers hindering development of floating solar and agrivoltaics, and government collaboration to establish designated parks for utility-scale solar.

Although Malaysia has a long-standing and highly-developed oil-and-gas industry, strong growth in demand for gas and declining domestic supply means LNG imports will play an increasingly important part in the energy mix. Malaysia already imports LNG from Australia and other sources and cargo volumes are likely to grow strongly through the 2020s and then again from the late-2030s onward.

Clean Energy & CCS

Malaysia has been very open about its ambitions to develop a carbon capture and storage industry and serve as a storage hub in cross-border CO2 transactions. The country passed national legislation around CCUS in March 2025, while the state of Sarawak introduced its own regulations in 2022. Malaysia’s first CCS project – Kasawari – is being developed off the Sarawak coastline.

A number of agreements to progress CCS value chains have been signed with Japanese and South Korean partners. Two of the nine CCS projects selected for advanced status by the Japan Organization for Metals and Energy Security (JOGMEC) involve storage in Malaysia.

Natural Energy Resources

Malaysia has a range of natural energy resources, particularly natural gas and oil, along with a small amount of coal. Malaysia also has strong for potential for hydropower, solar and wind energy.

Natural Gas Reserves

Malaysia has strong natural gas reserves, ranking 24th globally with an estimates 38 million cubic feet of gas. Malaysia has one of the largest gas reserves in Asia and was the world’s fifth biggest exporter of LNG in 2023.

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