The 2023 Budget included plans to expand the green job market in the country. These are jobs concerned with sustainability, climate action, reducing greenhouse gas emissions, renewable energy, energy efficiency, circular economy and other green economy fields.
The jobs are not just confined to green technology process design and engineering, but extend into marketing, consultancy, finance, and more. The green economy is the new business frontier as we grapple with climate concerns and sustainability.
This is the green that we should embrace, if the nation is to achieve social and economic greatness. It is encouraging to note that the national emphasis on the green agenda is continuing despite the changes in governments.
Many may not be aware of the many schemes to drive and incentivise the green economy. Since 2013, the government has been extending the Green Investment Tax Allowance (GITA) and Green Income Tax Exemption (GITE) managed by Green Tech and Climate Change Corporation Malaysia (MGTC).
The aim is to generate 20 per cent of our energy from renewable sources by 2025 and reduce greenhouse gas emission intensity, relative to gross domestic product, by 45 per cent by 2030.
To qualify for GITA and GITE, companies must register and own the assets used in the business carried out in Malaysia. The asset must be qualified by the Finance Ministry. Once approved, a validation letter is issued, and claims can be made in the tax return form.
The allowance, amounting to 100 per cent of qualifying capital expenditure, can be offset against 70 per cent of statutory income in the assessment year.
It is reported that Bank Negara Malaysia has allocated RM2 billion in loans to small and medium enterprises to adopt low-carbon practices.
Introduced in 2022 as the Low Carbon Transition Facility, BNM offers eligible SMEs financing of up to RM10 million without collateral, for a tenure of up to 10 years, at a maximum rate of five per cent per annum.
This fund can be used, but is not limited, to obtain sustainability certification, increase the use of sustainable materials for production, improve the energy efficiency of buildings and appliances, and instal on-site generation equipment for renewable energy.
It has become clear that many foreign investors are increasingly looking at sustainability as a top priority.
This fund can be applied from participating commercial banks, Islamic banks and development financial institutions regulated by the central bank.
Khazanah Nasional allocates RM150 million for SMEs to develop environmentally friendly projects, including carbon credits and forest replanting.
Having the ability to offer carbon credits and take part in forest replanting is big business, but it also means you can provide an avenue to increase enviroment sustainability and governance credentials of your company, which will help woo investors.
Then, there is the Green Technology Funding Scheme. It will increase its total guarantees to RM3 billion until 2025.
Introduced in 2010, the scheme guarantees between RM10 million and RM500 million of term loan facilities, bond or sukuk.
The nationally determined contributions that might be relevant to business include renewable energy, energy efficiency, waste recycling, green manufacturing and green building.
Consumers and businesses are increasingly looking for environmentally responsible products and services.
By implementing green initiatives and sustainable practices, SMEs can differentiate their brand and attract customers who prioritise sustainability.
By embracing sustainability, SMEs can gain a competitive advantage and position themselves for long-term success.
We hear many grouses about the government not making progress on the promised reform.
As reiterated by some analysts, the reform of a system which has been abused for decades is bound to need time. Unlike previous governments, this government does not change policies for the sake of changing.
Policies which are deemed good for the country are continued and improved.
The green economy agenda is one which should be viewed by all, irrespective of their political affiliations, as the right step forward for the country as we strive to be a great nation.
The 2024 Budget must continue with the support mechanisms for the green economy.
* The writer is a professor at the Tan Sri Omar Centre for STI Policy, UCSI University