Investment Opportunities & Incentives and Challenges in Green Technology & Environmental Services

Transcription

1 APEC Workshop on Environmental Services in the 21 st Century: Challenges and Opportunities for Sustainability October 2014, Kuala Lumpur Session 4 - Experience Sharing on the Development of Environmental Services by APEC Member Economies Investment Opportunities & Incentives and Challenges in Green Technology & Environmental Services Presenter: Hazli Jemaat Clean Technology & Environment Management Division MIDA

2 Milestone Malaysian Industrial Development Authority (MIDA) was established in 1967 under Act of Parliament, 1965 Principal Malaysian government agency responsible for the promotion of investment and coordination of industrial development First point of contact for investors intend to set up projects in manufacturing and services sectors in Malaysia In 2004 MIDA is mandated to promote investments in the services sector In 2011 restructured and rebranded as Malaysian Investment Development Authority

3 Liberalisation Manufacturing Sector: 100% foreign equity is allowed Services Sector: 45 services sub sectors including healthcare, tourism, logistics, education, oil, gas & management consulting services. 3

4 National Green Technology Policy Objective To reduce the energy usage rate and at the same time increase economic growth; To facilitate the growth of green technology industry and enhance its contribution to national economy; To increase national capability and capacity for innovation in green technology development and enhance Malaysia s competitiveness in green technology in global arena; To ensure sustainable development and conserve the environment for future generations; and To enhance public education and awareness on green technology and encourage its widespread use. National Green Technology Policy Objective Thursday, 20 October :32pm 4

5 Promoted Activities Renewable Energy Energy Efficient Waste Recycling Green Transport Building technology Electrical & Electronics Products Oil Palm Biomass 5

6 Major Incentives Pioneer Status Income tax exemption ranging from 70% to 100% for a period of 5 to 10 years Investment Tax Allowance 60% to 100% on qualifying capital expenditure for 5 years Incentives Reinvestment Allowance 60% on qualifying capital expenditure for 15 consecutive years Import Duty & Sales Tax Exemption Raw materials, components, machinery & equipment

7 Renewable Energy (RE)

8 Type of Renewable Energy Company must generate the following energy forms:- (i) Electricity (ii) Steam (iii) Chilled water (iv) Heat

9 Sources of Renewable Energy Company must use renewable energy sources such as: INVESTMENT POLICIES i. Palm-oil mill / estate waste ii. Rice mill waste iii. Sugarcane mill waste iv. Timber / sawmill waste v. Paper recycling mill waste vi. Municipal waste vii. Biogas (from landfill, palm oil mill effluent and others) viii. Mini hydro power (not exceeding 10 MW) ix. Solar power

10 Renewable Energy (RE) Incentives PIONEER STATUS Income tax exemption of 100% of statutory income for 10 years; or INVESTMENT TAX ALLOWANCE Investment tax allowance of 100% on the qualifying capital expenditure incurred within a period of 5 years

11 Energy Efficiency (EE)

12 Eligibility (a) Companies providing energy conservation services (ESCO) (b) Companies which incur capital expenditure for conserving energy for own consumption

13 Eligibility (a) Companies providing energy conservation services (ESCO) Pioneer Status (PS) with tax exemption of 100% of statutory income for 10 years; or Investment Tax Allowance (ITA) of 100% on qualifying capital expenditure incurred within a period of 5 years to be utilised against 100% of the statutory income for each year of assessment.

14 Eligibility (b) Companies which incur capital expenditure for conserving energy for own consumption ITA of 100% on qualifying capital expenditure incurred within a period of 5 years to be utilised against 100% of the statutory income for each year of assessment.

15 WASTE RECYCLING

16 Waste Recycling Waste to Products e.g scrap metal, e-waste, palm biomass, Waste to Energy e.g msw to biogas to electricity Waste Treatment Companies are encourage to undertake co-activities / cogeneration

17 Waste Recycling INCENTIVES FOR WASTE RECYCLING PIONEER STATUS (PS) Income tax exemption of 70% of the statutory income for a period of 5 years; or INVESTMENT TAX ALLOWANCE (ITA) Investment tax allowance of 60% on the qualifying capital expenditure incurred within a period of 5 years CRITERIA Companies are only allowed to recycle waste/scrap obtained within Malaysia. Imports of scrap/waste are not allowed.

18 Challenges Changing the mindset of the public Creating the ecosystem, value chain and supply chain Lack of quality investment, R&D efforts and technical know-how Confusion of tasks and jurisdictional implications High investment Achieve target of national agenda

19 Measures Undertaken Assist potential investors Create public awareness Encourage more collaboration between private sector with local universities and research institutions Etc

20 Thank You!! MIDA Sentral No. 5 Jalan Stesen Sentral 5 K L Sentral Kuala Lumpur Tel , Fax investmalaysia@mida.gov.my

21 BELOW ARE SUPPORT SLIDES ONLY. NOT INCLUDED IN THE PRESENTATION

22 GREEN TRANSPORT

23 Green Transport Assembly or Manufacture of hybrid and electric vehicles Customised incentives up to 10 years based on the merit of each project Manufacture of selected critical components supporting hybrid and electric vehicles such as: Electric motors Electric batteries Battery management system Inverters Electric air conditioning Air compressors Customised incentives up to 5 years based on the merit of each project Incentive Expired on 31 Dec 2014

24 BUILDING TECHNOLOGY

25 BUILDING TECHNOLOGY Manufacture of clay-based, sand-based and other non-metallic mineral products : High alumina/basic refractories Laboratory, chemical/industrial waste Synthetic diamonds Crystallised/ moulded glass (eg: bricks, tiles, slabs, pellets, paving blocks and squares) Absorbent mineral clay Marble and granite products Panels, boards, tiles, blocks/similar articles of natural and synthetic fiber agglomerated with cement, plaster/other mineral binding substance Company can apply : Pioneer Status of 70% for 5 years; or Investment Tax Allowance of 60% on the capital expenditure incurred 5 years period.

26 ELECTRICAL & ELECTRONIC PRODUCTS

27 Electrical & Electronic Products PIONEER STATUS (PS) Income tax exemption of 70% of the statutory income for a period of 5 years; or INVESTMENT TAX ALLOWANCE (ITA) Investment tax allowance of 60% on the qualifying capital expenditure incurred within a period of 5 years

28 ELECTRICAL / ELECTRONIC PRODUCTS Alternate energy equipment, products, systems, devices or components:- Solar cells or panels or module or systems Rechargeable batteries or storage systems Fuel cells Energy saving lighting Manufacturing Electrical products Uninterruptible power supplies Inverters and convertes

29 OIL PALM BIOMASS

30 OIL PALM BIOMASS Utilisation of oil palm biomass to produce value added products PIONEER STATUS Income tax exemption of 100% of statutory income for 10 years; or INVESTMENT TAX ALLOWANCE Investment tax allowance of 100% on the qualifying capital expenditure incurred within a period of 5 years

31 Total Investment Approved by Sector % Primary USD 6 bil. 24.1% Manufacturing USD 16 bil. USD 66 billion 66.8% Services USD 44 bil. Source: MIDA 1 4

32 Major Industries in Manufacturing Non-Metallic M&E Others Rubber 4% 4% 11% 7% USD 19% E&E Food 8% 16 Basic Metal 11% billion 13% Transport 11% 12% Chemical Petroleum Note : Others include Fabricated Metal, Plastic, Textiles, Paper Printing & Publishing, Rubber, Wood, Beverages & Tobacco, Furniture & Fixtures, and Miscellaneous Source: MIDA 1 4

33 Approved Services Projects 2013 Regional Establishmen ts Distributive Trade Telecomm. 5.8 Hotel & USD 44 Tourism 7 Transport Global Operations Hub Utility Others billion 83.3 Real Estate Source: MIDA

34 Liberal Investment Policies Ownership Manufacturing & selected services sectors can be wholly foreign-owned Capital No restriction to repatriate capital, interest, dividends and profits Expatriate Posts Liberal policy, based on merit of each case 34

35 National Energy Policy, 1979 Supply Objective: Ensure the provision of adequate, secure and cost-effective energy supply Utilisation Objective: Promote efficient utilisation of energy and eliminate wasteful and non-productive patterns of energy consumption Environmental Objective: Minimise negative impact of energy production, transportation, conversion, utilisation and consumption on the environment 35

36 RE Capacity Target Under FiT Eight Malaysia Plan: RE is identified as the nation s 5th fuel after oil, gas, coal and hydro in Five Fuel Policy. Ninth Malaysia Plan: Target of 350 MW of gridconnected RE generation capacity 2015: 985 MW or 5.5% share of energy mix 2020: 2,080 MW or 11% share of energy mix Operational RE Capacity as at Oct 2013: MW (1.8%)

37 Why Invest in RE? Malaysia is well endowed with abundant renewable sources of energy, especially biomass and solar Malaysia as climatic conditions is favorable for development of solar energy Green technology becomes preferred choice in procurement of products and services due to increased awareness

38 Budget 2014 Announcement YAB Dato Sri Mohd Najib Tun Razak 25 th October 2013 The 2014 Budget Speech to strengthen the development of green technology, the Government will provide investment tax allowance for the purchase of green technology equipment and income tax exemption on the use of green technology services and system..

39 Zuaida Abdullah Hazli Jemaat Shahzul Jayawiran Mohd Yunus Gogielan Nantha Kumar Astrid Juliana Abu Bakar Shamsul Amir Azman Noor Syuhada Mohd Hilmi Md Sezehli Musthafa

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41 Approved Green Projects Osram Wafer Technologies (M) Sdn Bhd and Philips Lumileds Lighting Company SDn Bhd approved in 2007 and 2011 respectively. Manufacturing Sector LED Samsung SDI Energy (M) Sdn Bhd approved in Nov 2011 Lithium Ion Battery Incentive expired on 31 Investment from Tokuyama Corporation approved in 2009 Polycrystalline Silicon Inverter Applied Energy Solutions Sdn Bhd and MR Energy Solutions Sdn Bhd approved in Solar Wafers / Cells / Modules As at 2013, 29 companies approved with total investments RM25.8 billion, including First Solar Malaysia Sdn Bhd, AUO Sunpower Sdn Bhd, Panasonic Energy Malaysia Sdn Bhd 41

42 EE Incentives Eligibility i. Companies which provide EE services must carry out Energy Performance Contracting (EPC) services activities to conserve the usage of energy. Energy Performance Contracting(EPC) Services Activity Undertake the EE project on behalf of the client (including financing), on the basis of recovery of all costs from agreed sharing of EE savings over a specified period based on EPC.

43 Eligibility ESCO must carry out Energy Performance Contracting (EPC) services Undertake EE project on behalf of client (including financing), on the basis of recovery of all costs from agreed sharing of EE savings over a specified period based on EPC Types of services covered: Consultancy and advisory services (energy audit, training, energy management, services, feasibility studies) Project management (design and tendering, procurement, supervision and commissioning of the project)

44 Import Duty & Sales Tax Exemption Import duty and sales tax exemption on imported machinery, equipment, materials, components, spare parts/ replacement parts and consumables Sales tax exemption on machinery, equipment, materials, components, spare-parts / replacement parts and consumables purchased from local manufacturers Exemption is considered for a period of 1 year Exemption starts from date application received by MIDA

45 Criteria Used directly for the EE and RE projects Not manufactured locally For Sabah and Sarawak, items are not produced in the respective States Locally manufactured items cannot meet requirements (in terms of quantity or specifications)

46 Expiry of RE and EE incentives 31 December March 2015 Investment Tax Allowance Pioneer Status Import Duty Sales Tax Exemption