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IPW: Australia passes net zero law, and Malaysia reviews energy policy

20 September 2022

In this week’s Infrastructure Policy Watch, we examine Australia’s net zero emissions law and Malaysia’s in-depth review of energy policy.

IPW: Australia passes net zero law, and Malaysia reviews energy policy
Malaysia's government will review all policies related to the energy sector. Image credit: Patrick F/Shutterstock

Australian Senate passes 2050 law for net zero emissions

The Australian Parliament has signed the government’s proposed legislation for cutting the country’s carbon dioxide emissions by 43% by 2030 and pursuing a goal to reach net zero emissions by 2050 into law.

The legislation received a positive vote on Thursday, 8 September, a month after it was passed in the lower house of parliament.

The bill was cleared by the senate with a vote of 37 to 30. It followed a recommendation issued by the senate’s Environment and Communication Legislation Committee at the end of August.

Under the new law, independent statutory body, Australia’s Climate Change Authority, will advise the government and its departments on how to embed net zero targets in their programmes and objectives.

The new carbon emissions goal represents a 15%-point increase from Australia’s previous 2030 target.

ICE’s view

Decarbonisation and a just net zero transition are critical.

Leadership from a major global player like Australia is essential to reducing global emissions. COP27 this year will place an even greater emphasis on climate adaptation and net zero strategy.

The Intergovernmental Panel on Climate Change (IPCC) warned the world’s governments of the major challenge of mitigating the effects of climate change.

Its report highlighted that limiting global warming to 1.5°C needs ‘rapid and deep, and in most cases, immediate’ emissions reductions.

Yet, the report also highlighted a gap between ambitious national targets and the actual emissions cuts the world is on course to achieve.

By signing the 43% emissions cut by 2030 into law, Australia’s new Labor government is showing necessary leadership on climate and providing stability to the country’s energy system.

Review of energy policy in Malaysia

The prime minister of Malaysia, Datuk Seri Ismail Sabri Yaakob, has announced that the government will review all policies related to the energy sector.

These include the benefits of third-party access to grid infrastructure.

Prime Minister Ismail Sabri has also looked at increasing existing promotional grants and subsidies to make the use of renewable energy and related technologies more commercial.

He also said that the development of green energy sources should be made a priority instead of being viewed as an optional extra in future government policy planning.

Key challenges identified included financing renewable energy and associated technical challenges.

The government is also set to focus on unlocking hydrogen as a key energy source. This focus would help meet targets included in a new National Energy Policy, showing that the government is committed to an energy transition that reduces carbon emissions.

Malaysia is working towards achieving the national goal of net zero greenhouse gas emissions by 2050, as outlined in the 12th Malaysia Plan.

ICE’s view

Financing a fair transition to net zero is an enormous challenge.

More than 130 countries now have net zero targets, covering 91% of global GDP. They’re joined by 115 state and regional governments, 235 cities and more than one-third of the world’s biggest publicly traded companies.

ICE held a presidential roundtable in March on the topic of financing a fair transition, and a roundtable with the UK Infrastructure Bank earlier in the year.

By identifying the financing of net zero as a key challenge in reaching targets, Malaysia has highlighted that developing and reviewing policy must be aligned with financial investment. This will enable governments to implement the changes needed to reach 2050 targets.

In case you missed it:

  • ICE breaks down the price guarantee and new policies following a major UK government intervention on energy.
  • Marie-Claude Hemming, director of operations at Civil Engineering Contractors Association (CECA) discusses how the UK government can avoid repeating the mistakes of the 2008 recession.
  • Phillip Clisham, member of ICE’s water and sanitation Community Advisory Board, and technical director at PClisham Consulting Ltd, explains why sewage is ending up in UK seas.

Check back in a fortnight for the next edition of the ICE's Infrastructure Policy Watch.

You can also sign up to ICE Informs to get a monthly digest of the latest policy activities from ICE, including calls for evidence to support our ongoing advice to policymakers.

  • Laura Cunliffe-Hall, interim lead policy manager at ICE