SMEs eye green plan to comply with EU carbon ruling

PETALING JAYA: The green electricity tariff (GET) programme looks appealing to manufacturers mainly due to industry players looking to reduce emission in order to comply with the EU Carbon Border Adjustment Mechanism (CBAM), says Tan Sri Soh Thian Lai

The Federation of Malaysian Manufacturers (FMM) president said manufacturers also require the renewable energy certificate (REC).

“Along with the supply chain, they are seeking to comply with industry practices by aiming to reduce emission including the net-zero carbon emission target and utilising 100% electricity from green energy.

“With funding, space, roof condition and resource constraints to install their own solar power generation, the GET programme may be a more cost-effective alternative,” he said.

Soh pointed out the Transition and Water Transformation Ministry (Petra) had introduced a new tiered pricing mechanism with lower rates for the GET programme and available quota of 6,600 gigawatt-hours (GWh) for 2024 as announced on April 8.

He said the new rates were set at 10 sen per kilowatt-hour (kWh) for domestic and non-domestic low-voltage users, and 20 sen/kWh for non-domestic medium and high-voltage users compared to the previous rate of 21.8 sen/kWh.

In addition to subscribers being exempted from the imbalance cost pass-through (ICPT) as well as receiving the Malaysia REC as proof of renewables, he said there were also other factors that contributed to manufacturers subscribing to the GET programme.

FMM hopes the government would consider the proposal to exempt GET subscribers from the 1.6% contribution to the renewable energy (RE) fund as both (RE fund and GET premium) serve the same purpose in increasing the capacity of resources in the electricity supply system.

This, he said, would further make going green affordable to businesses and increase the GET take-up rate.

SME Association of Malaysia secretary-general Chin Chee Seong also opined that the 40% subscription was due to the requirement from industry players’ customers to adopt certain green initiatives including the utilising the green electricity and reducing carbon footprint.

“You can see from the subscriptions; the companies are mostly profitable midsize and large size SME while with smaller SME, you don’t see many of them subscribing.

“For SMEs, unless it is a requirement from their customers, I don’t think they will switch to GE.

“As such, I would like to suggest to TNB and the government to give lower, attractive tariff rates so there is more take-up among SMEs, especially those in the services sector,” Chin said.

Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry president Nivas Ragavan said businesses should have the option to purchase a low carbon electricity supply without having to install their own solar rooftop or other renewable energy installations.

This way, he said there would be no high Capex (capital expenditure) incurred.

“Businesses that want to reduce their carbon footprint in electricity consumption are the main drivers behind the switch to GE.

“Customers enrolled in GET programme will receive Malaysia Renewable Energy Certificate (mREC) after the end of a calendar year,” he said.