In Malaysia, the energy sector is projected to continue to be the largest contributor to greenhouse gas (GHG) emissions in 2030. According to the Third National Communication (NC3) of Malaysia , the largest contributor to increasing GHG emissions in the energy sector is the transportation industry, with emissions expected to increase from 64,387 Gg CO2eq in 2014 to 114,840–116,700 CO2 eq in 2030. Since most of the energy use in the transport industry is from road transportation, an effective approach to reducing the emissions of road transport is required.
As of 2018, the highest rate of motorisation among ASEAN countries has been in Malaysia at 4 times the continental average, or 439 vehicles per 1000 inhabitants. The first and most pressing challenge in the effort to reduce emissions is to address the transport energy use. The electrification of vehicles, including automobiles, two-wheelers and buses, is one of the main strategies to mitigate GHG emissions in the road transport sector. As a result of this global trend away from electrification, it is expected that battery electric vehicles (BEVs) will account for approximately 50% of the global automobile stocks in 2050 .
The BEV industry has yet to gain much traction in Malaysia and is unlikely to do so until further technological gains are realised and the prices of BEVs fall. Because Malaysia is a net oil exporter with relatively low fuel prices, it is expected to take longer to reach parity. In addition to the electrification of the road transport sector of Malaysia, the use of biofuels is another strategy intended to mitigate GHG emissions . Biodiesel is considered a sustainable and viable alternative source to petrol in Malaysia, one of the largest producers of palm oil . Based on National Biofuel Policy in 2006 , a blend of 90% petroleum diesel 10% of biofuels, known as B10 biodiesel, has been used in the transpor tation sector since 2019. The Malaysian government is said to be considering a new biodiesel strategy: the use of B20, which includes 20% bioenergy produced from palm oil.