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A Roadmap of Emissions Intensity Reduction in Malaysia a Publication by The A Roadmap of Emissions Intensity Reduction in Malaysia A Publication by the MINISTRY OF NATURAL RESOURCES AND ENVIRONMENT MALAYSIA Kementerian Sumber Asli dan Alam Sekitar Malaysia Wisma Sumber Asli, No.25 Persiaran Perdana, Presint 4 62574 PUTRAJAYA MALAYSIA This publication may be reproduced in whole or part in any form for education or non-profit use, without special permission from the copyright holder, provided acknowledgement of the source is made. First published 2014 Printed in Malaysia ISBN 9 789670 250199 Ministry of Natural Resources and Environment Malaysia has no responsibility for the persistence or accuracy of URLs for external or third-party Internet Web sites referred to in this publication and does not guarantee that any content on such Web sites is, or will remain, accurate or appropriate. A Roadmap of Emissions Intensity Reduction in Malaysia TABLE OF CONTENTS I LIST OF TABLES VII LIST OF FIGURES XII GLOSSARY XVI FOREWORD XXI EXECUTIVE SUMMARY XXII CHAPTER 1: INTRODUCTION 1 1.1 Background 1 1.2 Objective 2 1.3 Scope of Work 3 1.4 Structure of the Report 4 CHAPTER 2: MALAYSIA OVERVIEW 5 2.1 Basic Data & Geographic Overview 5 2.2 Socio-Economic Overview 6 2.2.1 Population 6 2.2.2 Household 9 2.2.3 GDP 10 2.2.4 Income per Capita 12 2.2.5 Income Distribution 13 2.2.6 Social Indicators 15 2.3 Response to Global Climate Change 17 2.3.1 Sustainable Development, Climate Change and National Priorities 18 2.3.2 Implication of Climate Change to Malaysia 19 2.3.3 Response Option to Climate Change 20 2.3.4 Role of the Ministry of Natural Resources and Environment 21 2.4 National Policy on Climate Change 22 2.4.1 State of Emission in Malaysia 24 2.4.2 Mitigation Assessment 28 2.5 National Policy Measures 29 2.5.1 Energy Policy 29 2.5.2 National Environment Policy 34 A Roadmap of Emissions Intensity Reduction in Malaysia I CHAPTER 3: MITIGATION ASSESSMENT 35 3.1 Introduction 35 3.1.1 Methodology and Approach 35 3.2 Outline of Mitigation Analysis 39 3.3 Waste Sector 40 3.3.1 Introduction 40 3.3.2 Waste Generation and Treatment Scenario in Malaysia 42 3.3.2.1 Recycling and Material Recovery Facility 44 3.3.2.2 Composting 44 3.3.2.3 Incineration and Refuse Derived Fuel (RDF) 44 3.3.2.4 Wastewater Generation in Malaysia 45 3.3.3 Current Policy Scenario 47 3.3.4 Emissions Attributed to the Waste Sector 53 3.3.4.1 Solid Waste 53 3.3.4.2 Domestic and Commercial Wastewater 57 3.3.4.3 Industrial Wastewater Treatment 59 3.3.4.4 Overall Emission Reduction 59 3.3.4.5 Action Plan for Implementation 62 3.4 Land Use, Land-Use Change and Forestry Sector 65 3.4.1 Forest Governance and Institutional Mechanism 66 3.4.2 Land Use 68 3.4.3 Forest Types 70 3.4.3.1 Growing Stock 71 3.4.3.2 Forest Carbon Stock 72 3.4.3.3 Peat Land 73 3.4.4 Forest Policies and Legislations 75 3.4.4.1 Development of Criteria and Indicators 75 3.4.4.2 Forest and Timber Certification 76 3.4.4.3 Forest Concessions 76 3.4.4.4 Emphasis to Increase Area under Rubber and Forest Plantation 77 3.4.5 Land-Use Policy 78 3.4.6 Future Land Use Pattern 79 3.4.6.1 Forestry Scenario in 2020 79 3.4.6.2 Forestry Scenario in 2030 80 3.4.7 Carbon Sequestration Scenario 81 3.4.8 Emission Scenario 83 3.4.9 Action Plan for Implementation 86 3.5 Agriculture Sector 90 3.5.1 Planted Areas of Major Agricultural Crops in Malaysia 90 3.5.2 Livestock Population 92 3.5.3 Livestock Production Dominated by Poultry 93 3.5.4 Major trends in Agricultural Production 93 3.5.4.1 Growth in Agricultural Production Has Weakened 93 II A Roadmap of Emissions Intensity Reduction in Malaysia 3.5.5 GHG Emissions from the Agriculture Sector 94 3.5.5.1 Field Burning of Agricultural Residues 96 3.5.5.2 Nitrogenous Fertilizer Management 97 3.5.5.3 Manure Management 97 3.5.6 Carbon Dioxide Emissions under Business as Usual and Ambitious Scenarios 102 3.5.7 Key Findings and the Way Forward 106 3.5.7.1 Managing Methane Emissions from Paddy Cultivation 108 3.5.7.2 Methane Emission Reduction in the Livestock Sector 109 3.5.7.3 Manure Management for N2O and CH4 reduction 111 3.5.8 Action Plan for Implementation 113 3.6 Energy Consumption 115 3.6.1 Overview of End Use Energy Demand 115 3.7 Transport Sector 118 3.7.1 Introduction 118 3.7.1.1 Overview of Transport Sector in Malaysia 118 3.7.1.2 Key issues in the Transport Sector 124 3.7.2 Demand Projections and Technology Characterisation 126 3.7.2.1 Demand Projections 126 3.7.2.2 Technology Characterisation 128 3.7.2.2.1 Road Transport 128 3.7.2.2.2 Rail Transport 130 3.7.2.2.3 Air Transport 132 3.7.2.2.4 Maritime 133 3.7.3 Scenarios 134 3.7.3.1 Business-As-Usual Scenario 134 3.7.3.2 Alternative Scenarios 136 3.8 Industrial Sector and Industrial Processes 138 3.8.1 Introduction 138 3.8.1.1 Industrial Processes 141 3.8.2 Industrial Projections 141 3.8.2.1 Steel Production 141 3.8.2.2 Cement Production 143 3.8.3 Technological Characterisation of Options 143 3.8.3.1 Iron & Steel 143 3.8.3.2 Cement 145 3.8.3.3 Other Industries 146 3.8.4 Ambitious Scenarios for the Industrial sector 147 3.8.4.1 Steel Sector 147 3.8.4.2 Cement Sector 148 3.8.4.3 Other Industries 148 3.8.5 Emissions from Industrial Processes 148 3.9 Residential and Commercial Sector 152 3.9.1 Energy Consumption in Residential and Commercial Sectors 152 A Roadmap of Emissions Intensity Reduction in Malaysia III 3.9.2 Residential Sector 152 3.9.3 Commercial Sector 159 3.9.3.1 Energy Mix in the Commercial Sector 160 3.9.4 Review of Policies Influencing Residential and Commercial Sectors 164 3.10 Energy Supply 170 3.10.1 Overview of Energy Supply 170 3.10.2 Energy Resource Endowments and Production 171 3.10.2.1 Oil and Gas 171 3.10.2.2 Coal 173 3.10.3 Energy Prices 175 3.10.4 Power Generation 175 3.10.4.1 Power Sector Overview 175 3.10.4.2 Technology Assessment for Power Sector in Malaysia 179 3.10.4.3 GHG Emissions Overview of Power Sector 189 3.10.5 Future Scenarios for Power Sector 191 3.11 Markal Analysis and Results 192 3.11.1 Results and Analysis of Business-As-Usual Scenario and the Ambitious Scenario 193 3.11.1.1 Business-As-Usual Scenario 193 3.11.1.1.1 Primary Energy Supply in the Business-As-Usual Scenario 193 3.11.1.1.2 Final Energy Consumption in the Business-As-Usual Scenario 196 3.11.1.1.3 CO2 Emission in the Business-As-Usual Scenario 199 3.11.1.2 Ambitious Scenario 202 3.11.1.1.1 Primary Energy Supply in the Ambitious Scenario 202 3.11.1.1.2 Final Energy Consumption in the Ambitious Scenario 205 3.11.1.1.3 CO2 Emission in the Ambitious Scenario 211 3.11.2 Recommendations 216 3.11.2.1 Recommendations for the Transport Sector 216 3.11.2.1.1 Increasing Share of Rail in Passanger and Freight Movement 216 3.11.2.1.2 Reducing the Demand for Personalized Modes of Transport and Increasing Share of Public Transport 217 3.11.2.1.3 Improving the Technology/Efficiency of Vehicles and Emission Standards 219 3.11.2.1.4 Increasing Use of Alternate Fuels/Renewable and Cleaner Sources of Energy 220 3.11.2.1.5 Other Options 223 3.11.2.2 Recommendations for the Industrial Sector 225 3.11.2.3 Recommendations for the Residential and Commercial Sectors 227 3.11.2.4 Recommendations for Energy Supply Sector 233 3.12 Others Sector 235 3.13 Conclusion: Malaysia’s Mitigation Roadmap 237 IV A Roadmap of Emissions Intensity Reduction in Malaysia CHAPTER 4: DEVELOPMENT OF TECHNOLOGICAL INTERVENTIONS TOWARDS LOW CARBON ECONOMY PATHWAYS 245 4.1 Introduction 245 4.2 Technology Needs Assessment (TNA) 247 4.2.1 Purpose of Technology Need Assessment 247 4.2.2 Selection Criteria for TNA 247 4.2.3 Preliminary Findings 248 4.2.3.1 Power Sector 248 4.2.3.2 Residential and Commercial Sector 263 4.2.3.3 Transport Sector 267 4.2.3.4 Industrial Sector and Industrial Processes 279 4.2.3.5 Waste Sector 290 4.2.3.6 Agriculture Sector 293 4.2.3.7 Land Use, Land-Use Change and Forestry Sector 296 4.2.3.8 Adaptation Technologies 298 4.3 Technological Intervention Towards Low Carbon Economy Pathways 304 4.3.1 Low Carbon Economy Pathways from Other Countries 304 4.3.1.1 Developed Countries 305 4.3.1.2 Developing Countries 306 4.3.2 Options for Malaysia 307 4.3.2.1 Reducing Carbon Content of Energy Resources 307 4.3.2.2 Energy Efficiency and Conservation for Low Carbon Growth 310 4.3.2.3 Facilitating Low Carbon Industries and Services Development to Promote Green Growth 313 4.3.2.4 Low Carbon Alternatives for Non-Energy Sectors 314 4.3.3 Current Policies and Programmes for Supporting Low Carbon Development 315 4.3.3.1 Green Technology Policy 315 4.3.3.2 Green Building Index 315 4.3.3.3 Energy Efficiency and Conservation 316 4.3.3.4 Solid Waste Management 316 4.3.3.5 The Efficient Management of Electrical Energy Regulation 316 4.3.3.6 Green Technology Financing Scheme (GTFS) 317 4.3.3.7 Bio-Fuel Policy and Programme 317 4.4 Recommended Technological Interventions Towards Low Carbon Economy Pathways 318 4.4.1 Reducing Carbon Content 318 4.4.2 Energy Efficiency and Conservation for Low Carbon Growth 319 A Roadmap of Emissions Intensity Reduction in Malaysia V 4.4.3 Facilitating Low Carbon Industries and Services Development to Promote Green Growth 320 4.4.4 Low Carbon Alternative for Non-Energy Sectors 321 4.5 Priorities for Low Carbon Investment 322 4.5.1 GHG Abatement Cost 322 4.5.2 Sectoral Abatement Cost 323 4.5.2.1 Power Sector 323 4.5.2.2 Residential and Commercial Sector 323 4.5.2.3 Transport Sector 324 4.5.2.4 Industrial Sector and Industrial Processes 325 4.5.2.5 Agriculture Sector 326 4.5.2.6 Waste Sector 327 4.5.2.7 Land Use, Land Use Change and Forestry Sector 328 4.6 Conclusion and Way Forward 328 REFERENCES FOR CHAPTER 2 & 3 330 REFERENCES
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