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ENVIRONMENT ISSUES IN MALAYSIA

Environmental awareness is building up in Malaysia and with the 9th Malaysia Plan 2006-2010 the Malaysian government has placed further emphasis on preventive measures to mitigate and minimise negative environmental effects at source, to intensify conservation efforts and to ensure a sustainable development of both the exhaustible and the renewable energy resources. The past decade of rapid economic growth and industrialization has caused serious environmental challenges in Malaysia. The most prominent at the moment are considered to be air pollution from industrial emissions, solid waste management, ensuring long-term sustainability of the water supply and sewerage services industry and overall improvements of energy efficiency to re-establish a clean Malaysia. Denmark and Malaysia have co-operated in the area of environment protection since 1994, and more than 100 projects have been carried out. Danish support to the Malaysian energy sector under Danida, has greatly contributed to the Malaysian view of Denmark as a country with cutting-edge knowledge and technology within energy efficiency, particularly within manufacturing and consumer products. Energy saving in the industry, therefore, holds a major potential for Danish companies in Malaysia. Water and Wastewater The domestic and industrial water demand in Malaysia is expected to triple over the next 50 years and based on estimated doubling of the per capita water consumption by 2020 it is predicted that water shortages will occur within the next 5 years. Currently more than 95% of the urban and 85% of the rural population are served by piped water of which 45.746 km are Asbestos Pipes. During the 9th Malaysia Plan the Government plans to replace about 18.000 km of these pipes. Sewerage systems will continue to be expanded to ensure the quality of effluent discharged into receiving water bodies comply with environmental standard and safeguard public health. A sum of USD 0.45 billion is allocated for the implementation of environmental preservation projects and general water resource management. Malaysia will continue to upgrade, rehabilitate and refurbish existing

sewerage treatment systems, and USD 860 million will be provided for repair of existing sewerage plants and construction of new plants. The 9th Malaysia Plan will furthermore intensify research and development on reuse of sludge for industrial, agricultural and landscape purposes as well as wastewater reclamation for non-potable purposes. At the recent mid-term review of the 9th Malaysia Plan it was highlighted that from 2006 to 2008 the rural water coverage was expanded and another 177.760 households will benefit from the governments Water Supply Programme. Another 650.000 people benefitted from the sewerage service and 308 small sewerage treatment plants have been repaired and upgraded. In the 2009 budget RM308 million is allocated to upgrade and supply clean water to rural areas. Air Pollution With the 9th Malaysia Plan a new Clean Air Action Plan will be undertaken to improve air quality in urban areas. Reduced sulphur content in diesel and petrol is a main focus area. Both EURO 2 and EURO 3 specifications will be introduced for further reduction. Renewable Energy Within renewable energy the focus is on better utilization of biomass resources, for example from the palm oil industry. In coming years also production of ethanol from palm oil side-production is expected to develop. Malaysia holds a large unexploited potential within this area. The Government has set up incentives to encourage the promotion, development and utilization of renewable energy (i.e., solar, wind and biomass resources by waste products from the palm oil and wood industry as well as rice husk). The Government has implemented the program The Malaysian Industrial Energy Efficiency Improvement Project to improve energy efficiency by removing barriers to efficient industrial energy use in 11 manufacturing sub sectors; cement, ceramic, food, glass, iron & steel, pulp & paper, rubber, wood, oleo-chemical, plastic and textile. Additionally, Clean Development Mechanism (CDM) will be utilised in supporting the implementation of small renewable energy programmes (SREP). Energy Efficiency The overall energy demand is expected to increase at an average rate of 6.3 percent per annum, during the period of the Governments 9th Malaysia Plan.

Implementation of energy efficiency programmes focusing on energy saving features in the commercial and industrial sectors are supported by financial and fiscal incentives. The Government will encourage efficient lightning, air conditioning systems as well as changing energy usage patterns and appliance labelling measures. Following up on this demand-side-management the Government raised the tariffs on electricity in July 2008 in order to ensure optimal and efficient use of energy.