KUALA LUMPUR: MIDF Research reiterates its optimism with the government's initiative for an orderly energy transition under the National Energy Transition Roadmap (NETR) from the oil and gas perspective.
The firm believes that Malaysia has the right tools, assets and skillset to pioneer hydrogen fuel and carbon capture and storage in the region.
"Despite the infrastructural and regulatory challenges, we believe the existing assets that the nation has in pioneering hydrogen as an alternative fuel as well as establishing carbon capture, utilization, and storage (CCUS) projects on depleted hydrocarbon fields are good indicators that Malaysia has the capability to implement NETR through the oil and gas sector efficiently, consequently ensuring an orderly energy transition across all sectors," it said in a note.
It said the adoption of CCUS technology is crucial for achieving the country's goal of net-zero emissions, especially in industries that are difficult to decarbonize.
By capturing and using CO2 emissions, Malaysia has the potential to reduce its carbon footprint, stimulate the growth of new green industries, promoting sustainable economic development and improving resilience to climate change effects.
"CCUS is expected to cover a wide range of sectors, in tandem with the growth of technological advancements and improvements in cost-efficiency. "However, the adoption of CCUS across different industries rely heavily on an established regulatory framework.
"In order to initiate a proper integration of CCUS into the local economic network, adaptation of similar laws such as The London Protocol and the EU CCS Directive is crucial as the first step to provide CCUS beyond just the oil and gas sector," it said.
Additionally, it said CCUS in Malaysia is expected to be adopted through a cluster/hub where multiple emitters will invest in and use shared CCUS infrastructure, with the aim to lower the overall expenses in its implementation while generating profit.
The firm's top picks are MISC Bhd for its involvement in the Kasawari CCUS Project in offshore Sarawak, through its subsidiary Malaysia Marine and Heavy Engineering (MMHE), as well as Petronas Gas Bhd for its expertise in gas transportation and regasification operations, which could benefit both hydrogen fuel and CCUS operations.
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