Register now for your free, tailored, daily legal newsfeed service.

Find out more about Lexology or get in touch by visiting our About page.

Green publication 2.0 | future of Mobility

ZICO Law Network

To view this article you need a PDF viewer such as Adobe Reader.

If you can't read this PDF, you can view its text here. Go back to the PDF .

Malaysia June 8 2022

APRIL 2022

GREEN PUBLICATION 2.0

Future of

Mobility

CONTENT

Asean's Lofty Goals For Electric Vehicles

Global EV Sales & Penetration

Cambodia

The Rise of the Electric Tuk-Tuk: How the ride-hailing industry is pressing forward the production of electric vehicles in Cambodia

Indonesia

Battery-Powered Electric Vehicle:

A Step Forward to Green Mobility in Indonesia

Malaysia

I. Future of EVs in Malaysia:

14 Towards a More Electrified and Sustainable Economy

II. Energy Efficient Vehicles:

Pathway to Lowering Malaysia's Transportation

Carbon Footprint

III.Green Mobility: An Essential 35 Element of Sustainable Cities

and Communities

Philippines

EV Industry in the Philippines: A Brief Overview

Singapore

Achieving Singapore's Electric Dream

Thailand

Thailand to become the New EV Hub

Vietnam

Is Vietnam Ready for EV Breakthrough? General background of Electric Vehicle ("EV") development in Vietnam

Moving Towards Green Mobility

Contributors

List of References

ASEAN'S LOFTY GOALS FOR ELECTRIC VEHICLES

The COVID-19 pandemic inhibited mobility like never before. Cities went under lockdown. People were forced to shift to working and learning from home. There was a major shift in the transportation sector as roads were deserted, public transport operated at minimal capacity and air travel halted as countries closed their borders.

While it was expected that the COVID-19 pandemic would cause an unprecedented drop in global car sales, the sale of electric vehicles ("EVs") saw extraordinary growth. The IEA reported an increase in global EV sales, especially where additional stimulus or incentives were provided. In Europe and China, approximately 1.3 million EVs were sold, making them clear leaders as EV territories.1

Policy support is important in driving EV success. The 2030 UN Sustainable Agenda advocates for a green mobility revolution, which is also promoted by the ASEAN Plan of Action for Energy Cooperation ("APAEC").2 APAEC advocates for sustainable transition in ASEAN countries and promotes various technologies for the promotion of green mobility.

by introducing policies encouraging the use of EVs, EV roadmaps, various tax exemptions and incentives, and collaborations with the private sector. Increasing encouragement and interest in the EV sector will lead to more regional growth, and greater improvement in air quality.

It is clear that where the EV industry is supported, it will continue to grow and will also spawn related infrastructure and industries. Bain & Company estimates that the region's annual new investment in passenger electric vehicles will grow to USD6 billion by 2030 and it will need another USD500 million in new charging infrastructure as service providers support electrification needs.3

This publication sets out how ASEAN is moving forward with green mobility focusing on the growth of the EV industry. Increased government support will encourage more investors in the region which in turn will lead to greater economic growth and more choices in the EV market. The future of EV is promising, offering much choice for existing assets and incumbent players alike, and provide new opportunities and profit pools.

There has been surge on interest in EVs across ASEAN. Many If you have any questions, please contact Fadjar and Amin, or countries are encouraging wider penetration of the EV industry the ZICO Law partner or lawyer you usually deal with.

Fadjar Widjaksana Kandar

Co-Executive Partner Roosdiono & Partners (a member of ZICO Law)

Amin Abdul Majid

Head, Infrastructure, Energy and Utilities Practice Group

Zaid Ibrahim & Co. (a member of ZICO Law)

Global passenger car and light duty vehicle sales (in millions)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Global market share

GLOBAL EV SALES & PENETRATION

EVs are expected to outsell internal combustion engine vehicles (ICEVs) in ASEAN from 2035, with EV penetration expected to grow five times to 20% by 2025, from 4% in 2020.

Outlook for annual global passenger-car and light-duty vehicle sales, to 2030

Global ICE

Global BEV

Global PHEV

EV Share

100

100%

75 75%

50 50%

25 25%

0 0%

Source: Dr. Bryn Walton, et al, `Electric vehicles, Setting a course for 2030' (Deloitte Insights, 28 July 2020)

Outlook for EV market share by major region

EU - EV market share 50%

Europe - EV market share

China - EV market share

EV Global share of sales

40%

30%

20%

10%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Source: Dr. Bryn Walton, et al, `Electric vehicles, Setting a course for 2030' (Deloitte Insights, 28 July 2020)

Timeline of strategic OEM targets for EVs

Source: Dr. Bryn Walton, et al, `Electric vehicles, Setting a course for 2030' (Deloitte Insights, 28 July 2020)

Source: Maybank IB Research and others

2020

EV penetration rate in ASEAN is currently at 4%

2025

Penetration will supercharge at a growth rate of

5 times to 20% by 2025

2030

EVs will reach sales parity with ICEVs by 2030

2035

EVs will outsell ICEVs from 2035

CAMBODIA

THE RISE OF THE ELECTRIC TUK-TUK: HOW THE RIDE-HAILING INDUSTRY IS PRESSING FORWARD THE PRODUCTION OF ELECTRIC VEHICLES IN CAMBODIA

Introduction

Ridesharing has had a long history in Cambodia. Starting from the bicycle-for-hire and the cyclo (three wheeled bicycles), which became popular since the 1900s, Cambodians have enjoyed the shared mode of transportation. However, these vehicles have in the past few decades become a thing of the past. As the Cambodian economy grew and the number of new and more modern vehicles began to pour in, man-powered vehicles like the cyclo and the bicycle were swapped for faster and more efficient modes of transportation such as the tuk-tuk. In fact, these motorised rickshaws became so popular that it had almost wiped out the cyclo completely.

Along with the introduction of ride-hailing applications in Cambodia such as Passapp, Grab and Tada tuk-tuks became a staple in the ride-hailing industry - being the most popular vehicle serviced through these ride-hailing platforms. Although electric vehicles are not currently the most common means of transport, we are seeing more international companies setup factories for installation and manufacturing of electric vehicles to service the needs of the new generation of rickshaw drivers and clients who demand efficiency and innovation.

Cambodia has one of the youngest populations in Southeast Asia, and an increasingly technology savvy and environmentally conscious one. We have already seen a growing popularity among the local population for the use of hybrid vehicles, such as the Toyota Prius, especially in urban areas such as the capital city of Phnom Penh. Even though fuel based motorised vehicles will most likely continue to dominate the transport sector for years to come, with the increasing demand for mobility as well as the need for energy efficient and cost-effective modes of transport, it is only a matter of time before electric vehicles become a staple in Cambodia's transport sector.

Government incentives

In an effort both to revitalise the vehicle import industry in Cambodia as well as a move towards a cleaner energy driven country, on 9 February 2021, the Royal Government of Cambodia ("RGC") issued a sub-decree on the adjustment of special tax rates for certain vehicles. This sub-decree decreased the tax rates for the import of family and passenger transport vehicles which operate purely from electric power from 30% to 10%. In addition, based on this sub-decree, the tax rates for family vehicles running on hybrid power systems were also reduced between 1015%. Before this sub-decree, the government-imposed tax rates for hybrid and electric vehicles were already quite low, as compared to gas and diesel fuel vehicles.

Moreover, pursuant to Article 24 of the 2021 Investment Law (the "Investment Law"), green energy, environmental protection and management, investment in technologies which contribute

CAMBODIA

to climate change adaptation and mitigation, high-tech industries involving innovation or research and development, electrical and electronic industries as well as spare parts, assembly and installation industries are examples of sectors and activities entitled to investment incentives. Further, in accordance with the Industrial Development Policy 2015-2025 of the RGC, one of the priority sectors listed include "new industries with the capability of breaking into new markets, with high value-added products, creative and highly competitive such as machinery assembly, mechanic/ electronic/electric equipment assembly, means of transport assembly...".

The Council for the Development of Cambodia ("CDC"), the Kingdom's key institution for companies interested in developing projects in Cambodia offers one-stop-shop services such as advisory services, reviewing investment applications and granting incentives for companies operating in the prioritised sectors. Upon successful application and review by the relevant authorities, companies intending to operate in such prioritised sectors may receive investment incentives pursuant to the Investment Law 1994 ("Investment Law"), which primarily includes profit tax, custom tax and import duties reductions and/or exemptions for certain periods of the project.

Brief summary of current regulatory framework

and `Guaranteed Investment Project' ("GIP"), they may begin by applying to the CDC or Municipal-Provincial Investment Sub-Committee ("MPISC"). Upon initial review of the application, the CDC or MPISC may decide to issue a registration certificate within 20 working days, allowing the company to register with the Ministry of Commerce, General Department of Taxation and relevant ministries, while promising certain investment incentives for QIP upon their successful registration.

On top of that, the Cambodian regulatory framework is also very conducive for foreign investment, with very few sectors having limitations on foreign ownership. The most commonly known restriction pertains to land ownership whereby only natural persons of Cambodian citizenship or companies with 51% or more of its shares owned by Cambodian persons/entities are allowed to own land in Cambodia. As for the energy and transportation sector, there is currently no foreign ownership restriction.

Pursuant to Sub-Decree No. 48 of the RGC dated 6 April 2020 on the organisation and functioning of the Ministry of Industry, Science and Innovation, this newly reformed Ministry's duty is to lead and manage science, technology, and innovation industries in the Kingdom. Although this reformation is still quite new, this can be seen as yet another effort by the RGC to encourage the promotion of innovation and technology in Cambodia.

To set up a company or factory in Cambodia is not particularly difficult. Typically, those intending to set up a company will have to register first with the Ministry of Commerce. Then, they are required to register with the tax authorities and, if their sector is further regulated by specific ministries or institutions, they will apply for authorisations, licenses and/or permits from the relevant authorities. As for companies which meet's the CDC's requirements to become a `Qualified Investment Project' ("QIP"), `Expanded Qualified Investment Project' ("EQIP")

Taking advantage of the investment opportunities and incentives present in Cambodia, Onion Mobility Co Ltd., a subsidiary of Singapore's MVLLABS Pte Ltd (the company behind `Tada'), with the support and approval from the CDC, decided to establish an electric motorbike and auto-rickshaw assembly plant in the Kingdom. It is said that the company's prototype, Onion T1, can travel 100km on a full charge at an average cost of USD2.1 Further, the company plans to roll out these locally produced electric rickshaws out into the domestic market as early as the end of 2021.

Conclusion

According to a report issued by the Global Green Growth Institute dated January 2021, rapid economic development, improved income, population growth, and rising rates of urbanisation have contributed to a high demand for vehicle ownership in Cambodia. Although the global COVID-19 pandemic and the associated travel restrictions and lockdowns, might have slowed down the businesses of tuk-tuks and ridehailing services, it is very likely that once there are less travel restrictions, that rickshaws and tuk-tuks will continue to be a popular mode of transport in Cambodia, and especially in urban areas such as Phnom Penh. Further, it is very likely that the RGC will continue to support and prioritise industries which help to combat the effects of climate change and to promote sustainable development.

CAMBODIA

INDONESIA

BATTERY-POWERED ELECTRIC VEHICLE: A STEP FORWARD TO GREEN MOBILITY IN INDONESIA

The BEV Battery Industry

As an effort to accelerate the BEV program, the Government has laid out its support towards the program from upstream all the way to the downstream sides of the industry.

For upstream business activities, the Government enacted the Ministry of Trade Regulation No. 100 of 2020 on the Import Provisions of Used Lithium Battery as the Raw Material for the Lithium Battery Industry to Support the Acceleration of the BEV Industry ("MoT 100/2020"). This regulation stipulates that the imported used lithium battery (baterai lithium tidak baru) can only be used as a raw material for the lithium battery industry to support the BEV industry acceleration. MOT 100/2020 provides that:

The Regulatory Framework for Battery-Powered Electric Vehicle in Indonesia

In 2019, the Indonesian Government enacted Presidential Regulation No. 55 of 2019 on Acceleration of the Battery Powered Electric Motor Vehicles for Road Transportation Program ("PR 55/2019") to the kick off the Indonesia's plans towards the green energy policy. PR 55/2019 empowers the achievement of Indonesia's commitments to increase energy efficiency in the transportation sector, by setting up the battery-powered electric vehicle ("BEV") industry in Indonesia.

Since the enactment of PR 55/2019 up to date, several implementing regulations have been enacted from upstream to downstream business activities to ensure the acceleration of the BEV program. These regulations, include among others, provisions on the import of lithium battery as the raw material of BEV's battery, BEV charging infrastructure, incentives on BEV motor vehicles tax and motor vehicles transfer tax, manufacture of BEV components, conversion of combustion engine-drive motorcycles into batterypowered electric motorcycles, and BEV physical testing.

Batteries can only be imported by lithium battery industry companies holding a Business Identification Number (Nomor Induk Berusaha or "NIB"). The NIB is also valid as an Importer's Identification Number of Producer (Angka Pengenal Importir Produsen or "API-P"), a license to import raw materials.

The company holding NIB, that also serves as an API-P, can only import pre-used lithium battery after obtaining a Producer Importer (Importir Produsen or "IP") of used lithium battery (the "IP-BLTB") (a document to complete customs in the import sector).

Application of IP-BLTB is done online via the Ministry of Trade's website by submitting the company's (i) NIB that also serves as an API-P, (ii) industrial business license or other equivalent business license, and (ii) environmental license.

Once issued, IP-BLTB is valid for as long as the company is conducting its industrial business activity. This eliminates the inconvenience of having to re-apply for the IP-BLTB repeatedly. However, if there are changes to the company's identity details the IP-BLTB holders must apply for an amendment to its IPBLTB. IP-BLTB holders are also mandated to submit annual import implementation reports online for both realised and unrealised import of pre-used lithium battery by 15 January of the following year. Further, IP-BLTB holders are not allowed to transfer and/or trade the imported pre-used lithium battery to other party, and is obliged to process the pre-used lithium battery.

INDONESIA

Manufacturing of BEVs

Other than the pre-used lithium battery industry, Indonesia has enormous nickel resources and the Indonesian Minister of Finance, Sri Mulyani Indrawati, has expressed her commitments to support the BEV industry pertaining to Indonesia's nickel reserves and production as another raw material of BEV's battery.1 Indonesia has the potential to become a major component of the BEV supply chain due to its large-high-quality nickel reserves, supportive policies, and regulations that eases the BEV investment. In relation to the nickel resources, Tesla has expressed its investment plans regarding the establishment of a battery production facility in Indonesia. Analyst "Fitch Solutions" stated that the investment proposal by Tesla will cement Indonesia's status as a strong and component player in the global BEV supply chain.2 Nonetheless, upon further discussions between the Indonesian Government and Tesla, Tesla has expressed their keen interest in investing in the Energy Storage System as part of the BEV industry supply chain instead.

The need of nickel for batteries is important, as nickel contributes significantly to the manufacture of lithium-ion (Li-ion) batteries ("LIB") used in drones, micro-sized robots, smartphones, laptops, medical equipment's, as well as BEVs.2 Recently, one of China's major battery manufacturers, Contemporary Amperex Technology Co., Limited ("CATL"), plans to invest USD5 billion for the construction of a LIB factory in Indonesia considering the availability of substantial nickel resources in Indonesia.3

Previously, PR 55/2019 sets out that that BEV or BEV component companies wishing to participate in the BEV industry must obtain the relevant business licenses and build a manufacturing facility in Indonesia. Further, the Ministry of Industry Regulation No. 28 of 2020 ("MoI 28/2020") requires that BEV industries must carry out domestic manufacturing and prioritise domestic production. If there is a necessity for import, an approval from the relevant Directorate General under the Ministry of Industry is required. The utilisation of domestic components for the BEV manufacturing must also comply with the Ministry of Industry Regulation No. 27 of 2020 on Specifications, Development, Road Map, and Provisions for Calculation of Domestic Component for BEV ("MoI 27/2020"), which regulates the use of domestic components ("TKDN") classified by the amount of BEV's wheels.

The Government has also set another incentive programme through the Financial Services Authority (Otoritas Jasa Keuangan/OJK). Under OJK Regulation No. 40/POJK.03/2019 on Asset Quality Assessment of Commercial Banks, funds are provided to debtors for the purchase of BEV or development of BEV's upstream industry in the form of granting of credits from banks for up to IDR 5 billion to BEV industry's business actors. The credit quality assessment is only based on the accuracy of principal or interest payments.

The mandatory use of domestic components in BEV manufacturing also applies to the stage of assemblyline activities, and research-anddevelopment activities (to any primary components, supporting components and the commercialisation of BEV).

Figure 1: Minimum TKDN value requirement for BEV manufacturing

The TKDN values are self-calculated by the relevant BEV manufacturer by obtaining the carried out by the Implementation Type TKDN certificate, issued by authorised verification agencies appointed by the Minister. Test Unit.

In addition, the Ministry of Transportation issued Regulation No. 87 of 2020 on BEV Physical Testing ("MoT 87/2020") which provides that all BEV must undergo physical testing on top of fulfilling the examination processes under the Ministry of Transportation Regulation No. 30 of 2020 on the Testing of Motor Vehicles ("MoT 30/2020"). The additional physical testing in MoT 87/2020 requires examination on the electric batteries, electric charging devices, electric shock protection, functional safety, and hydrogen emissions ("Physical Testing"). The examination on electric battery is

The classification on the Physical Testing categories is determined based on the number of wheels, seating capacity, engine cylinder capacity, speed, permitted weight, and/or permitted combined weight. Physical Testing is applied to the following BEV categories:

9 INDONESIA

In addition, the Physical Testing must be conducted in accordance with the provisions set out in the following table:

Type of Physical Testing Electric Battery Electric Charging Device Electric Shock Protection

Functional Safety

Hydrogen Emission

Authorised Party(ies)

Commentary

Domestic testing institutions or testing laboratories that are accredited by the National Accreditation Committee (Komite Akreditasi Nasional/KAN);

Foreign testing laboratories recognised by the Asia Pacific Accreditation Cooperation/ International Laboratory Accreditation Cooperation; or

Other accredited international laboratory organisations.

Must be installed in accordance with the instructions provided by the relevant battery manufacturers, assemblers and/or importers; and

Batteries and their components must be installed properly (to prevent the batteries from coming loose or apart if the vehicle is tilted or turned upside-down).

Conducted to examine the fulfilment of various installation indicators for the charging of battery-powered electric motor-vehicles.

Conducted in relation to high-voltage networks that do not connect to any external high-voltage sources, including:

direct contact protection;

indirect contact protection; and

isolation barriers.

Implementation Type Test Unit

Must be equipped with indicators that informs the driver when the vehicle is ready to be driven;

Must be equipped with indicators to indicate when the driver leaves the vehicle when the vehicle is ready to be driven; and

When charging on-board batteries via external power sources that are physically connected to the power inlet socket, there must not be any external movement caused by vehicle propulsion systems.

Hydrogen emissions must be below 125 grams during a given five-hour period or below 25 x t2 grams during t2 in hours per unit during normal charging procedures;

Battery charging and auto-stop charging must be automatically controlled

Connections and disconnections from resources should not affect any charging control-phase systems; and

Indicators should address any charging failures.

MoT 87/2020 also provides that all BEVs that are either built or imported after obtaining Type Testing Certificate must be equipped with noise-emitting devices by no later than 16 December 2024, whereas those that are still undergoing testing must be equipped with noise-emitting devices by no later than 16 December 2022.

INDONESIA

BEV's Charging infrastructure

When we talk about BEVs, we must also consider how the batteries will be recharged. PR 55/2019 provides two options for the electrical charging infrastructure of BEV, battery recharge, or battery swap.

BATTERY RECHARGE

Battery recharge may be conducted by way of either:

(a) private electrical installation, which is only for private use and not to be sold, and can only be located in Government offices and residential housings, or

(b) Public Electric Vehicle Charging Station (Stasiun Pengisian Kendaraan Listrik Umum or "SPKLU").

The types of SPKLU are determined based upon the following criteria:

SALE OF ELECTRIC POWER

Holder of Electric Supply Business License (Izin Usaha Penyediaan Tenaga Listrik or "IUPTL") having a working area; and/or

Holder of IUPTL having a working area and cooperating with StateOwned Enterprises in the energy sector or other business entities.

LOCATION CRITERIA

Easily accessible by BEV owners;

Provided with exclusive parking space for SPKLU; and

Does not disturb traffic security, safety, and order.

LOCATION Public Refuelling Station (SPBU); Gas Refuelling Station (SPBG); Government Offices; Shopping centres; and Public parking by the roads.

The Electrical Charging Infrastructure of BEV are subsequently regulated under the Minister of Energy and Mineral Resources Regulation No. 13 of 2020 on The Provision of Electricity Charging Infrastructure for Battery-Powered Electric Vehicles ("MEMR 13/2020"). MEMR 13/20202 regulates additional provisions on SPKLU including the requirements of business actors intending to conduct SPKLU business activities, and SPKLU business scheme. Pursuant to MEMR 13/2020, SPKLU business actors must obtain SPKLU identity number that must be shown and can be seen clearly in their SPKLU locations. SPKLU business actors must also be a holder of either an IUPTL for sales of electricity power or an integrated IUPTL. On top of that, in order to accelerate

the BEV program, MEMR 13/2020 stipulates that such business actors must also have SPKLUs located in more than one province in the country.

The business schemes of SPKLU are determined based upon the type of IUPTL held by the business actors.

SPLKU Business Scheme

Type of IUPTL

Integrated IUPTL holders

IUPTL for sales holders

(1)POSO Provide, Own, Self-Operated: business actors as the SPKLU owner provide and sell electricity in SPKLU, as well as operating the SPKLU.

(2)POPO Provide, Own, Privately Operated: business actors as the SPKLU owner provide and sell electricity in SPKLU operated by holders of Electricity Supporting Service Business License (Izin Usaha Jasa Penunjang Tenaga Listrik or "IUJPTL") in operating sector.

(3)PPOO Provide, Privately Owned and Operated: business actors provide and sell electricity in SPKLU owned and operated by holders of IUJPTL in operating sector.

(4)PLSO Provide, Lease, Self-Operated: business actors provide and sell electricity in SPKLU leased from partners and operate the SPKLU.

(5)PLPO Provide, Lease, Privately Operated: business actors provide and sell electricity in SPKLU leased from partners and operated by holders of IUJPTL in operating sector.

(1)ROSO Retail, Own, Self-Operated: business actors as SPKLU owner purchase electricity from holders of integrated IUPTL, and sell electricity in SPKLU, as well as operate SPKLU.

(2)ROPO Retail, Own, Privately Operated: business actors as SPKLU owner purchase electricity from holders of integrated IUPTL, and sell electricity in SPKLU operated by holders of IUJPTL in operating sector.

(3)RPOO Retail, Privately Owned and Operated: business actors purchase electricity from holders of integrated IUPTL and sell electricity in SPKLU owned and operated by holders of IUJPTL in operating sector.

(4)RLSO Retail, Lease, Self-Operated: business actors purchase electricity from holders of integrated IUPTL and sell electricity in SPKLU leased from partners and operate SPKLU.

(5)RLPO Retail, Lease, Privately Operated: business actors purchase electricity from holders of integrated IUPTL and sell electricity in SPKLU leased from partners and operated by holders of IUJPTL in operating sector.

11 INDONESIA

BATTERY SWAP

The second option for BEV's Electrical Charging Infrastructure, battery swap, is also regulated under MEMR 13/2020. Battery swap is to be provided through a Public Electric Vehicle Battery Replacement Station (Stasiun Penukaran Baterai Kendaraan Listrik Umum or "SPBKLU") by way of battery leasing to the BEV owners. Similar to SPKLU, SPBKLU also has its own set of requirements:

LOCATION CRITERIA

Easily accessible by BEV owners; and

Does not disturb traffic security, safety, and order.

Meanwhile the functions of a battery replacement machine are to verify battery identity, check battery normality and power, recharge the battery, and provides information on the cabin containing the recharged battery to be picked up by the BEV owners.

However, there are only two available business schemes for SPBKLU:

BPCO Battery Provider, Cabinet Owner

BPCL Battery Provider, Cabinet Lessee

SPBKLU business actors owns batteries to be leased to BEV owners and has battery

swapping cabinet.

SPBKLU business actors owns batteries to be leased to BEV owners and lease battery swapping cabinet from partners.

With regards to electricity tariffs for Electrical Charging Infrastructure of BEV, under MEMR 13/2020 it is generally divided into the following applicable tariffs:

(a) (b) (c)

LOCATION

Public Refuelling Station (SPBU); Gas Refuelling Station (SPBG); Government Offices; Shopping centres; and Public parking by the roads.

Tariff for bulk sales purposes (curah)

the tariff for electricity charging from holders

of Integrated IUPTL to SPKLU, SPBKLU, or private electrical installation used for the charging of public

transportation.

Tariff according to its tariff classes

the tariff for electricity charging from holders

of Integrated IUPTL to private electrical

installation used for the charging of other than public

transportation.

The calculation of the tariffs is based on the following:

Tariff for special services purposes

the tariff for electricity charging from SPKLU

to BEV owners.

Further, SPBKLU business actors must also obtain SPBKLU identity number, guarantee the function of leased batteries (i.e. to meet the applicable SNI requirements), and have online battery replacement application. The online application functions as registration for BEV owners, provides information on locations of battery replacement machine, and information on empty cabin on the battery replacement machine to place and charge the batteries.

TARIFF FOR BULK SALES PURPOSES

Uses the Q multiplier factor4

Lowest amount of 0.8 and highest amount of 2

The application of Q multiplier factor shall be determined by the Integrated IUPTL holders

TARIFF FOR SPECIAL SERVICES PURPOSES

Uses the N multiplier factor5

Highest amount of 1.5

The application of N multiplier factor will be determined by the Integrated IUPTL holders or IUPTL for sales holders as SPKLU business actors

Incentives for BEV End-Customers

Both fiscal and non-fiscal incentives are available for users/owners of BEVs.

PR 55/2019

For starters, PR 55/2019 provides fiscal incentives for BEV users/owners in the form of parking fees in locations determined by Regional Government, and the reduction of electricity charging fees at SPKLUs. Aside from fiscal incentives, users and owners of BEV may also be given non-fiscal incentives. PR 55/2019 sets a nonfiscal incentives for BEV users and owners in the form of an exemption from the restriction on certain road use. PR 55/2019 also states that the Central and Regional Government may give further non-fiscal incentives.

INDONESIA

Ministry of Home Affairs Regulation No. 1 of 2021 on Basic Calculation of Motor Vehicles Tax and Motor Vehicles Transfer Tax Implementations

Provides for another fiscal incentive for BEV individual owners in the form of having only 10% of the basis imposition of motor vehicles tax and motor vehicles transfer tax at the maximum, which will be given by Regional Government.

Presidential Regulation No. 10 of 2021 concerning Investment Business Fields

The recently enacted Presidential Regulation stipulates that a "tax holiday" can be imposed to business actors in the BEV sector. At the time of writing this publication, the "tax holiday" can be granted to the producers and/or importers of BEV, where the BEV products are categorised as Luxury Goods with the imposition of 0% value added tax.6 Other forms of "tax holiday" will be further regulated by upcoming Ministry of Finance regulations which are yet to be issued at the time of writing this publication.

Investment Opportunity: the establishment of Indonesia Battery Corporation (IBC)

In order to further accelerate the program, the Government through the Ministry of State-Owned Enterprises established the Indonesia Battery Corporation ("IBC"), a holding company that will manage an integrated battery industry from the upstream to downstream activities all over Indonesia.

IBC is owned by four State-Owned Enterprises with different core businesses, namely:

It is expected that IBC is capable of producing BEV up to 10 million twowheeled vehicles and over 2 million of four-wheeled vehicles, and to produce batteries up to 140 GWh by 2030.7

In developing the integrated upstream to downstream factories, IBC needs around USD17 billion investment. In light of this, IBC aims to have each part of the battery industry supply chain form joint ventures with global players as the partner. IBC is currently partnered up with CATL, as well as South Korea's LG Chem Ltd. ("LG") as two of the most prominent global BEV or BEV components players. Following the formation of this partnership, President Joko Widodo led the ground breaking ceremony for IBC and LG's BEV battery factory on 15 September 2021.8 The Government is currently in the process of forming a synergy with several other companies who may become future partners.

Aside from CATL and LG's upcoming substantial investments, Toyota, one of the biggest automotive manufacturers in the world, has also committed additional investments in Indonesia amounting to USD2 billion to be used for the purpose of manufacturing hybrid BEVs in Indonesia for both new and of existing Toyota cars. Toyota is further committed to prepare 10 types of BEVs in the next five years for Indonesia, and aims to make Indonesia the centre of export of Toyota's products in ASEAN and also other countries.9 Similar commitment is also made by Mitsubishi for an additional investment of IDR11.2 trillion in late 2025 in order to increase factory capacity to manufacture two hybrid BEVs. Mitsubishi is also committed to make Indonesia the export centre of its Indonesian manufactured BEVs to 39 countries.10

Conclusion

Through enactment of PR 55/2019 and its several implementing regulations, the Indonesian Government has shown its ambitions and commitments to accelerate and support Indonesia's BEV industry sector. The Government has also showed its intention to shape Indonesia as one of Asia's leading countries in the BEV industry. They have amplified the regulatory framework for the upstream and downstream aspects of the BEV industry, provide investment opportunities in the BEV industrial sector, and formed the IBC holding company to manage and invest specifically in the BEV battery industrial sector.

In the BEV manufacturing sector, the Indonesian Government has stipulated incentives for the industry in respect of domestic components (TKDN) to ensure the development of domestic industrial eco-systems and to arrange the transfer of technology/skill.

It is expected that the Government's move to reform and shape the BEV industrial sector could facilitate investors to undertake more BEV investment activities in Indonesia. Not to mention that Indonesia has abundance of nickel reserves and sufficient facilities to process nickel, as nickel is one of the main BEV components. With abundant supply of natural resources coupled with foreign investment-friendly regulatory framework, Indonesia can be seen as a promising land for BEV-related investments in all of Asia.

13 INDONESIA

MALAYSIA FUTURE OF EVS IN MALAYSIA: TOWARDS A MORE ELECTRIFIED AND

PART I SUSTAINABLE ECONOMY

Main push factors for the acceleration of EV adoption

Interesting fact: The Electric Vehicle was actually built and driven much earlier than the

Internal Combustion Engine vehicles!

The first electric vehicle ("EV") was commissioned in 1828 and experienced peak development in the late 19th century. However, at the beginning of the 20th century, the advancement of internal combustion engine ("ICE") with its longer driving range, shorter refuelling time, better refilling infrastructure and cheaper gasoline price caused the production of EVs to decline dramatically.

GREATER AWARENESS ON CLIMATE CHANGE

Where are we now?

Malaysia has committed to reduce carbon emissions by 45% by the year 2030. Commendable steps have been taken towards the transition for electrification of mobility. However, our progress has been criticised as lacking2 and behind our neighbouring countries including Indonesia and Thailand, which are better equipped in supporting the development of EVs and thus far more attractive for EV-related investors.

The current awareness on climate change has transformed consumer preferences. The advancement of technologies coupled with regulations promoting the use of more renewable energy is shaping the future of mobility. The COVID-19 pandemic further created a stronger movement for a new mobility ecosystem that would provide a cleaner and at the same time, cheaper, faster and safer transportation system with the increase roll out of government policies associated with climate change mitigation efforts.

As a result, EVs have now pivoted to being the main mode of transport for the future and the number-one strategy for decarbonising the transportation system.

IMPROVEMENT IN BATTERY TECHNOLOGY AND REDUCTION IN COSTS

Significant technological advancement in battery technology, power electronics, converters, control and microelectronics and a steep decrease in battery costs coupled with the falling of lithium-ion battery prices have also sped up the transition to EVs. Bloomberg New Energy Finance ("BNEF") reported that lithium-ion battery pack prices, which were above USD1,100 per/kWh in 2010, have fallen 89% in real terms to USD137/kWh in 2020 and by 2023, average prices are expected to be close to USD100/kWh.1

EU automotive companies are committing to set up EV manufacturing plants in Thailand and China, while Japanese and Korean companies are setting up their EV manufacturing plants in Indonesia.3

As of May 2019, there were 194 battery electric vehicle and 52,467 hybrid electric vehicle registered in Malaysia.4 In comparison, there were 1,274 battery electric vehicle and 561 plug-in hybrid electric vehicles registered in Singapore as of 31 January 2021, according to the Land Transport Authority.5

At the global level, EV-Volumes,6 a database of sales statistics, charging infrastructure, batteries, car models and sales forecasts for plug-in cars, reported that in 2021, there are strong increases in EV sales despite the COVID-19 pandemic hitting overall car sales, with growth rates three to eight times higher than for total light vehicle markets. The share of battery electric vehicle ("BEV") and plug-in hybrid electric vehicle ("PHEV") in global light vehicle sales increased from 3% in 2020 H1 to 6.3 % in 2021.

According to BNEF's Electric Vehicle Outlook 2020, it is estimated that the EV share of new car sales will reach 58% by 2040. It is anticipated that EVs will reach up-front price parity without subsidies with ICE vehicles in most segments, although there is wide variation by region by mid-2020s.

MALAYSIA

Benefits of EV development

SPUR FURTHER ECONOMIC GROWTH

ACHIEVING ENVIRONMENTAL AND SUSTAINABLE DEVELOPMENT GOALS

Seeing the trends and potential of the EV market, major automakers have been making huge investments in EVs.

According to data from the World Resources Institute, the transportation sector is the third largest producer of world greenhouse gas emissions in 2016 at 15.9%, rank after electricity and heat at 30.4% and manufacturing and construction at 12.4%. The majority of greenhouse gas emissions from transportation resulted from the combustion of petroleum-based products in ICE vehicles. In Malaysia, emissions from the land transport sector are said to contribute to approximately 20% of the country's total emissions.

Malaysia has adopted the United Nations

Sustainable Development Goals ("SDGs") which aims

to end poverty, protect the planet and ensure that

all people enjoy peace and prosperity by 2030. In particular, Goal 13 of the

SDGs on Climate Action calls on member states to take urgent action to combat climate change

and its impacts.

Based on its Nationally Determined Contributions (NDC) and as a signatory

to the Paris Agreement, Malaysia aspires to

reduce its greenhouse gas emissions intensity of GDP

by 45% by 2030 relative to the emissions intensity of GDP in 2005 with 35% on an unconditional basis and a further 10% being conditional upon receipt of support from developed

countries.

In general, EVs produce fewer emissions than ICE vehicles and are capable of being emission free. EVs can therefore play a major role in climate change mitigation efforts, particularly in Malaysia, where the car ownership rate is high. As of 31 December 2019, there were 31.2 million units of motor vehicles (including cars, commercial vehicles and motorcycles) registered in Malaysia.

Increasing the uptake of EVs in Malaysia would assist the nation in achieving its environmental and sustainable development goals.

In Malaysia, we are still playing catch up with the world when it comes to reaping the benefits of the growing EV industry. Local manufacturing of EVs would definitely be beneficial in terms of boosting the Malaysian economy and achieving sustainable development. Given its existing automotive value chains and infrastructure, Malaysia has the capability to be at the forefront of EV manufacturing as it can upgrade its existing car production line to allow for production of EVs. Local car manufacturers such as Proton and Perodua can consider entering into partnerships and use their existing platforms to venture into the production of electric cars to increase its resilience in the future of mobility world which appears to inevitably involve EVs.

Results from a study on the economic implications of broader EV adoption in California indicate that light-duty vehicle electrification, while consistent with climate goals, can also be a potent catalyst for economic growth. The key findings of the study include that by 2030, vehicle electrification will increase California's gross state product by between USD82 billion to USD142 billion. Further, real income is projected to increase substantially ranging from between USD311 billion to USD357 billion in 2030. The study authors also calculated an estimated increase of between 394,000 to more than half a million new jobs in 2030.

Malaysia can reap similar benefits by promoting and incentivising local manufacturing of EVs by creating a holistic EV ecosystem in Malaysia. This will be beneficial in terms of spurring economic growth, attracting foreign investment, job creation, and achieving environmental and sustainable development goals.

EV sales are increasing and will continue to increase. The EV market has even shown resilience in the face of the COVID-19 pandemic. By tapping into this market, Malaysia can ensure that it remains competitive in the global automotive market and may also see a substantial growth in its GDP (the automotive industry contributed approximately 4.3% to Malaysia's GDP in 2019).

Certain Malaysian companies are already expected to benefit from the growth of the EV market. For example, Malaysian Pacific Industries Berhad (MPI) is expected to benefit from the growing adoption of silicon carbide ("SiC") in EVs. According to an analyst from CGS-CIMB, MPI has installed and commissioned the first four assembly lines to package SiC products for Cree (a semiconductor manufacturer in the US) in Ipoh.

15 MALAYSIA

INCREASE IN FOREIGN INVESTMENTS

In Indonesia, two of the world's largest lithium-ion battery producers, South Korea's LG Energy Solutions and China's Contemporary Amperex Technology Limited ("CATL") are investing USD9.8 billion and USD5.1 billion respectively, to produce EV batteries in Indonesia.

In Thailand, Toyota Motor Thailand Co., Ltd. is investing THB19 billion to manufacture EVs at its Chachoengsao plant and Mitsubishi Motors (Thailand) Co., Ltd. is investing THB5.48 billion to upgrade its existing car production line at Laem Chabang Industrial Estate to allow the annual production from 2023 of a total of 39,000 EVs.

million jobs across the world. This net job growth results from the creation of some 24 million new jobs and the loss of around six million jobs by 2030. Such employment creation is driven in part by the entire value chain associated with EVs.

It has to be acknowledged that the global transition to EVs may lead to job losses in the manufacturing of ICE vehicles. Malaysian workers will therefore have to be re-trained and upskilled in order to mitigate such job losses and to take advantage of new jobs created from the transition to EVs.

Our roadmap What have we done?

NATIONAL AUTOMOTIVE POLICIES

The EV industry has the potential to attract a great deal of foreign investment and Malaysia will have to act fast if it wishes to be an attractive EV investment destination.

JOB CREATION

The International Labour Organisation's report on `World Employment and Social Outlook 2018: Greening with jobs', estimates that changes in energy production and use to achieve the Paris Agreement goal, including the projected growth in the use of EVs, can create a net increase of approximately 18

Malaysia started its EV programme in 2011, by exempting excise duties and import taxes for completely built-up, fully imported hybrid cars to encourage manufacturers to invest in EV production in the country. However as the policy failed to boost foreign investment, the government abandoned it in 2014. It was extended only for completely knocked-down models assembled in Malaysia.

The government prefers to deal with manufacturers individually, a strategy that appears to work with several foreign original equipment manufacturers.8

Below is the National Automotive Policy ("NAP") issued by the Government to date: NAP 2006

NAP 2009

First introduced under the Third Industrial Masterplan to transform the automotive industry, outlining key strategies in preparing the local automotive players towards a more competitive and sustainable automotive industry.

Aimed to transform the domestic automotive industry and integrating it into the increasingly competitive regional and global industry network.

Introduced to focus on enhancing the capabilities of the domestic automotive industry and to create a more conducive environment for investments.

Aimed to enhance capability and competitiveness of the domestic automotive industry.

NAP 2020

Envisioned to enhance Malaysia's automotive industry in the era of digital industrial transformation from 2020 to 2030, thus enabling Malaysia to realise Connected Mobility.

Aimed to encourage new growth areas through integration of technology such as Next Generation Vehicle (NxGV), Mobility as a Service (MaaS), and Industrial Revolution 4.0 (IR4.0).

To reduce carbon emission from vehicles by improving fuel economy level in Malaysia by 2025 in line with the ASEAN Fuel Economy Roadmap of 5.3 Lge/ 100km.9

To become a regional leader in manufacturing, engineering, technology and sustainable development in the automotive sector.

NAP 2014

Placed emphasis on green initiatives, market expansion, as well as enhancement of the entire automotive ecosystem through development of technology, human capital and supply chain.

The ultimate objective was to establish Malaysia as a regional Energy Efficient Vehicle ("EEV") hub by 2020. EEV is defined as vehicles that meet a set of define specifications in terms of carbon emission level (gram/kilometre - g/km) and fuel consumption (l/100km). EEV includes fuel-efficient vehicles, hybrid, EV and alternatively fueled vehicles e.g. Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG), biodiesel, ethanol, hydrogen and fuel cell.

Low Carbon Footprint Blueprint 2021-2030

The Blueprint by the Ministry of Environment and Water, together with Malaysian Green Technology and Climate Change Corporation ("MGTC") outlines Malaysia's electrification agenda. It entails four focus areas with 10 strategies encompassing vehicle fuel economy and emission improvement, EV and low emission vehicle adoption, alternative fuel adoption and greenhouse gas emission. Key proposals under the Blueprint broadly include:10 (i) 10% penetration of BEV in the government fleet by 2022, rising to 20% within 2023 to 2025. (ii) 50% of the government's fleet will comprise of BEVs by 2023-2025. (iii)For GLCs, 20% BEV penetration between 2023 and 2025, rising to 50% between 2026 and 2030. (iv)National target of 9,000 AC charging point and 1000 DC charging point by 2025.

MALAYSIA

(v) A shift in vehicle taxation system (road tax/excise duty) based on vehicle carbon emission (currently based on engine capacity), compulsory vehicle performance evaluation, end-of-life vehicle scrapping incentive (for specific cases where replacement is for low emission vehicles) and introduction of a fuel levy (*for example RM0.01/litre) on all diesel and petrol purchases.

(vi)Tax incentives for plug-in hybrid vehicles (PHEVs) and battery electric vehicles (BEVs): PHEVs cover a 100% import and excise duty exemption for CBUs proposed from 2021 to 2022, 75% exemption for period between 2023 and 2025 and 50% exemption between 2026 and 2030; and BEVs involve 100% import and excise duty exemption for complete built units (CBUs) up until 2022 (for a maximum of 10,000 total volume), followed by a 50% exemption between 2023 and 2025.

Budget 2022

The recently approved Budget 2022 introduced tax exemptions and reliefs to support the development of the EV industry, including: 100% import duty and excise duty exemption for completely built-up (CBU) EVs from 1 January 2022 to 31 December 2023; 100% import duty exemption on components for locally assembled EVs from 1 January 2022 to 31 December 2025; 100% excise duty and sales tax exemption for completely knocked-down (CKD) EVs from 1 January 2022 to 31 December 2025; Road tax exemption of up to 100% for EVs; and Individual income tax relief of up to RM2,500 for costs related to EV charging facilities, including installation, rental, purchase (including

equipment hire-purchase) or subscription fees.

Malaysia's Automotive Industry

Malaysia's automotive industry is the third largest in Southeast Asia. As of December 2017, there are 27 vehicle manufacturers and 641 parts and components manufacturers in Malaysia. In 2020, a total of 485,186 units of passenger cars and commercial vehicles were produced and assembled in Malaysia.

Malaysia is also the only country in Southeast Asia with two national car brands Proton and Perodua. In 2020, together they held approximately 62% of the market share. Malaysia's current strength in the manufacturing of conventional ICE vehicles place the country in a favourable and strategic position

to transition to the manufacturing of EVs.

CAPABILITY TO PRODUCE EV COMPONENTS

The capability to produce critical EV components and systems would be crucial to position Malaysia as an EV production hub.

The NAP 2020 recognises Malaysia's capability to produce EV components and sets out specific measures to be undertaken, including: promoting manufacturing and application of

local battery and battery pack together with development of battery management system and thermal management system; developing standards to encourage battery swapping and wireless charging; and conducting feasibility study on hydrogen fuel cell technology.

Malaysia is already well-versed with regards to the manufacturing of parts and components of a conventional ICE vehicle. However, there are significant differences between the makeup of EVs and ICE vehicles, as EVs run on electric propulsion. In contrast with ICE vehicles, the key components of an EV include the electric motor, inverter and battery. EVs are also simpler than ICE vehicles in mechanical terms and contain less moving parts. According to Tesla, its drivetrain has about

17 moving parts compared with about 200 in a conventional drivetrain for an ICE vehicle. Tesla's electric motor also only has two moving parts compared with about 100 in an internal combustion engine. This will put certain suppliers of ICE vehicle parts and components and certain workers at risk, if they cannot adapt hence the importance of developing the Malaysian automotive industry supply and value chain to embrace the transition to EVs.

One of the main components of EVs, in contrast with ICE vehicles, is the battery. In terms of capability to produce lithiumion batteries, Samsung SDI has reportedly started producing lithium-ion batteries meant for EVs at its plant in Negeri Sembilan and is in talks with the Malaysia Automotive, Robotics and IoT Institute ("MARii") to increase such production. Nonetheless, Fitch Solutions has reported that Indonesia is expected to dominate the upstream and midstream sectors of the battery supply chain in South East Asia, as evidenced by LG Energy Solutions and CATL's investments in the country. This is due to Indonesia's large nickel deposits, coupled with its ban on the export of nickel ore. However, the report states that Malaysia can still play a key role in the downstream sector, as the assembly of battery packs and the export of completely built up EVs could potentially take place in Malaysia.

17 MALAYSIA

ABILITY TO BUILD CAPACITY AND SCALE UP

In the past years, there has been a flurry of announcements by big-name OEMs announcing plans to have a new line-up of new battery-electric commercial vehicles --Ford's unveiling of the 2022 E-Transit, Mercedes-Benz's announcement that eSprinter is heading to the U.S. market,11 General Motors announced its commitment to invest USD35 billion into EVs and autonomous through 2025 with a new business unit called BrightDrop and the Ultium Charge 360, an integrated platform for EV users to easily access charging stations and services bring formed.12

Building up local capacity and reskilling the work force is of paramount importance to ensure Malaysia's automotive industry remains dynamic and internationally competitive, as well as to encourage a successful transition to commercial EVs.

Adoption of new technologies may pose challenges for the future workforce as Malaysia's economy moves further into the Fourth Industrial Revolution. A 2018 report by Oxford

Economics and Cisco estimated that between 2018 and 2028, 1.2 million workers could be displaced due to technological disruption in Malaysia, representing 7.4% of the country's total workforce.13

Having sufficient workshops in the country to repair EVs is also crucial in ensuring the success of the EV Industry. Associate Professor Muhammad Zaly Shah, director of Universiti Teknologi Malaysia's Centre for Innovative Planning and Development, stated that Malaysia does not have programmes to train mechanic and engineers to be efficient in maintaining EVs. This means that owners would have to send their car back to manufacturers' overseas causing inconveniences and discouraging the uptake of EVs in this country. Mr Shahrol, the MyEVOC president, added that in case of breakdown or repair, there are merely "one or two" workshops in Kuala Lumpur that are able to resolve EV repair issues. Hence, addressing the manpower with the right technological know-how is critical to support the EV industry.

What More Can Be Done To Develop EV Industry?

BARRIERS TO EV GROWTH

Currently, EVs only make up a small share of Malaysia's automotive market. Although the EV incentives proposed in Budget 2022 are welcome and will support the implementation of the Low Carbon Mobility Blueprint, challenges remain.

Factors affecting the acceptance of EVs in Malaysia

Social Influence

Performance Attributes

Financial Benefits

Environment Concerns

Demographics

Infrastructure Readiness

Government Intervention

Although the government has put forward series of schemes such as free charging for a minimum annual subscription, and reduction in road tax, there are limited charging infrastructure with the EV industry still being relatively underdeveloped.

One school of thought is that the accumulated cost savings from the free charging, not buying fuel and the reduction in road

taxes is still significantly low compared to the cost difference between conventional internal combustion vehicles ("ICV") and an equivalent EV at the current stage.14 This is in particular when the purchase price for EVs is still significantly higher than the ICVs.

MALAYSIA

MAKING EVS AFFORDABLE

Despite the incentives offered by the Malaysian government under Budget 2022, the cost for owning an EV is still relatively high. One of the significant barries to the uptake of EVs remains to be its cost, and local manufacturing of EVs would help to alleviate that. Despite rapid growth in sales over the past few years, EVs are still a niche product due to barriers such as upfront cost or access to credit and vehicle chargers. As such, electric vehicles remain out of reach for many.

We can be proud that we have our own national cars, Proton and Perodua. For middle income earners, the national cars have enabled us to move around at our own pace and time without having to depend on public transportation which may be unreliable in remote areas. As such, it would expedite the uptake of EVs in this country tremendously if our national cars can transition to EVs.

An environment where EVs are limited, expensive, and exclusive to the upper middle class would disable the majority from accessing EVs. This may induce public resentment, effectively widening the gap between the conventional car users and sustainable vehicles.

In China, EVs are very accessible and affordable. A 10-foot-long minicar called the

Wuling Hongguang Mini made by General Motors and Chinese automakers SAIC and

Guangxi Automobile only costs around USD5,000. It is cheap, easy to drive, park and charge. Another attraction is that it can be personalised with a Crayola box of colour options and stickers from the likes of Pokemon and Hello Kitty. It is the best-selling EV in the country, outperforming Tesla's Model 3 and others with 250,000 in total sales. The car is reportedly ubiquitous in the Chinese city of Liuzhou, where there are ample chargers and the city offers free parking and charging to

support the growing EV market.

Smaller EVs can also be developed for use in urban areas given the lack of space for driving, parking and charging in urban cities. Small and compact urban EVs are also more efficient and reduce congestion in cities. Although they may be slower and have less power, they are certainly more efficient in urban environments.

Leveraging on digitalisation, start-ups like Los Angeles-based Borrow15 provides online car subscription services exclusive for EVs, while Steer16 provides an EV leasing and subscription service. One of their features is the ability to exchange different models of cars at just a few days' notice with a concierge-like at-home delivery, for example, you could drive an Audi e-tron during the week and switch into a Tesla Model X for a weekend trip. The availability of all these arrangements are steps forward in a mission to reduce barriers to EVs.

The Malaysian Government also supported private initiative EV car-sharing programme known as Cohesive Mobility Solution ("COMOS"), to provide rentable EV at selected locations in Klang Valley area.17

COMOS offers complete E-Mobility services by integrating various parts of the EV ecosystem and value chain

COMOS deploys public charging infrastructure, including a centralised network management system that integrates both EVs and charging stations. COMOS also supports the National Automotive Policy (NAP) by creating critical mass for the utilisation of EVs.18

19 MALAYSIA

MORE CHARGING INFRASTRUCTURE TO POWER EV DEMAND

We must have adequate infrastructure to enable the adoption of the electrification of our mobility. A rapid rollout of EV charging stations is critical to building consumer support for EVs.

Charging infrastructure consists of different components, but the term generally refers to Electric Vehicle Supply Equipment ("EVSE") and the charging stations provided to recharge the EV battery. EVSE is basically the conductor, EV connector, attachment plugs and all other devices which are being used for the purpose of delivering energy to the EV.

Although the charging process mostly happens during the night at home or in parking lots during the day, the availability of public charging stations is an important factor in the penetration of EVs in the mobility ecosystem.19

A major barrier to the growth of EV market in Malaysia is range anxiety, which is the fear that drivers have when the battery charge is low and a charging station is unavailable. AC chargers

generally takes three to six hours to charge, whereas DC chargers can charge an EV in 15 to 30 minutes, depending on the model and battery capacity.

An EV infrastructure plan must consider the existence of different EV users, as well as how to plan, zone, and legislate future charging needs.

Charging Infrastructure Mix20

NORMAL CHARGERS

Not networked or connected to an IT system. Cheaper to purchase up front. Cannot identify users or connect to an invoicing system,

hence is free of charge when they are public. As there is no cost to charging, vehicle owners may

leave their vehicle charging for a longer period, thus could block the charger for others. If the station is not connected to a network, the operator would not know if it is working properly without visiting it personally.

SMART CHARGERS

Connected to a central back-end system via wireless internet.

Smart charging infrastructure can be managed by the municipality.

Most common to have private eMobility Service Providers (EMPs) manage the systems since they are complex and customer facing.

Services offered aim to enhance the end user customer experience and further promote the ease and convenience of charging EVs.

These could include smart end user applications to show location and real-time status of the chargers, simple methods of payment, expert customer support, and service and maintenance of the stations.

MALAYSIA

Charge Point Operators (COP) in Malaysia

1 chargeEV An initiative by GreenTech Malaysia ("MGTC"). Largest public charging network - presently operating 326 charging stations nationwide with charging points consisting of 3.7kW to 22kW.

Accessible to drivers with a chargeEV card at a prescribed yearly fee.

MGTC entered into a tripartite partnership with Petronas Dagangan Bhd. ("PetDag") and TNB Energy Services Sdn. Bhd. ("TNBES") to install 100 EV charging stations, ChargEV, by 2018.

As of 1 March 2022, chargeEV public stations are located in Selangor, KL, Putrajaya, Johor, Kedah and Sarawak. The list of charging stations is available on their website.21

All PHEV or BEV cars officially sold on the Malaysian market are compatible with the chargEV network.22

In February this year, MGTC has entered into a joint venture with Yinson Green Technologies (M) Sdn Bhd, with the aim of expanding ChargEV's existing infrastructure from 400 odd numbers of charging stations to 2500 units.23

KEY STATS OF MARCH 2021

Powering Electric Mobility

Figure 1: chargeEv's statistics as of 21 March 2022

Shell Recharge

A collaboration between Shell and ParkEasy as an initiative to improve electric charging with smart parking bays.

Currently located at Sunway Medical Centre, Shell Mint Hotel, iOi City Mall, Lot 10, Sunway Pyramid Mall, Sunway Velocity, and 163 Retail Park Mont Kiara.24

3 Porsche and Shell Collaboration between Porsche Asia Pacific and Shell to implement Southeast Asia's first cross-border high performance charging network with 12 charge points at six Shell stations strategically located along Malaysia's North-South highway, offering EV drivers the possibility of convenient travel between Singapore, Kuala Lumpur, and Penang in the future.

Through this partnership, six Shell stations will be equipped with 180 kW direct-current (DC) chargers, offering the highest charging capacity across Singapore and Malaysia. The chargers come with two CCS Type 2 charging connectors, allowing a single vehicle to be charged at up to 180 kW, or two vehicles to charge simultaneously at up to 90 kW each.

The offering will be rolled out in stages with four stations to be ready in the second half of 2021 and two additional stations by the first half of 2022.

This will complement the established 175 kW high performance chargers available at all Porsche Centres in Malaysia, as well as the growing "Porsche Destination Charging" network at selected hotels, airports, sports clubs, and other attractive venues.25

JomCharge

Announced in October 2020, DC chargers will be installed at various points along the North-South Expressway to reduce range anxiety for electric car drivers travelling between major cities like Johor Bahru, Melaka, Kuala Lumpur and Penang.

Besides the chargers at Ayer Keroh rest stop in Melaka, it is also set to install DC fast charging points at rest and relaxation (RnR) pitstops in Skudai, Johor as well as Bukit Gantang, near Ipoh, Perak.

21 MALAYSIA

INCREASING RENEWABLE ENERGY (RE) GENERATION TO POWER EVS

The Government's target of having 31% RE in its installed capacity in 2025 and 40% in 2035 is definitely in the right direction in supporting the powering of the EVs using RE. In the next 15 years, RE capacity in Peninsula Malaysia is projected to increase from the current 4,430 MW to 10,944 MW. Given the potential of solar as the main RE source, the Malaysian Government is planning to introduce battery energy storage systems (BESS), with a total capacity of 500 MW from 2030 onwards.26

Recognising the importance for Malaysia to accelerate the transition into low carbon mobility, the Chief Strategy and Ventures Officer of Tenaga Nasional Berhad ("TNB") being the largest utility in Peninsular Malaysia, Datuk Fazlur Rahman Zainuddin had stated that "TNB is prepared to lead this exciting transition, not only as the infrastructure provider, but to drive a collaborative approach with a coalition of stakeholders to realise this important step towards decarbonisation".

With the need to increase the installation of charging stations, there will be a requirement to upgrade the power transmission and other systems to support them. Therefore, an integrated plan is required to consider the manner in which the infrastructure of the future is to be equipped such as making available charging stations at housing areas and the manner in which electricity supply can be provided to fast-charging stations along highways.

in the early 1990s, even as their performance has improved. BNEF projects that the cost of a lithium-ion EV battery pack will fall below US$100 per kilowatt-hour by 2023, or roughly 20% lower than today.

As the vast majority of lithium-ion batteries are produced in China, Japan and South Korea accordingly, recycling capabilities are growing fastest there. Foshan-based Guangdong Brunp -- a subsidiary of CATL, China's largest maker of lithium-ion cells have been reported to be able to recycle 120,000 tonnes of batteries per year which is equivalent of what would be used in more than 200,000 cars, where the firm is able to recover most of the lithium, cobalt and nickel. Government policies are helping to encourage this - China already has financial and regulatory incentives for battery companies that source materials from recycling firms instead of importing freshly mined ones.27

The costs of batteries can also be further managed through subscription plan arrangement. Oyika Pte Ltd, a Singapore Startup and a subsidiary of Yinson Holdings Bhd, provides a battery swap service bundled with an electric motorbike with affordable subscription plans. Oyika works with local e-motorbike manufacturers to adapt their brand-agnostic technology for local use resulting in swappable batteries that work with most e-motorbike brands and models in Southeast Asia. They offer subscription plans such as, pay-per-use, prepaid weekly or postpaid monthly plan which can swap depleted batteries for fully charged ones at an Oyika swap station.

FUTURE OF HYDROGEN

In Detroit, United States, General Motors ("GM") and Shell, through its wholly owned subsidiary MP2 Energy, LLC are collaborating to provide comprehensive energy solutions programs to GM's customers and supply chain partners, including fixed-rate home energy plans backed by 100% RE resources. We believe similar arrangement can also be considered for adoption by our utilities and local automotive makers here to ease and expedite the uptake of EVs in Malaysia.

BETTER AND CHEAPER BATTERIES

The mass adoption of EVs will also rely heavily on cheap, dependable batteries. Batteries are the largest cost contributing to the final price of electric cars. Cheaper batteries could make EVs more affordable. The battery packs in EVs which hold tens of kilograms of valuable metals are built from thousands of cells, with electronics to manage charging and discharging. In managing the increase of the demands for such batteries, researchers are looking into ways to make recycling it easier so that the amounts needed in future designs can be reduced. As it is still less expensive, in most instances, to mine metals than to recycle them, the main goal is to develop efficient processes to recover valuable metals cheaply enough to compete with freshly mined ones where research efforts have been focused on improving the process to make recycled lithium economically attractive.

There may also be potential in hydrogen fuel cell technology as part of the decarbonisation strategy for the mobility system. In 2019, South East Asia's first integrated hydrogen production plant and refuelling station was launched in Kuching, Sarawak. The facility was built by Sarawak Energy Berhad, in collaboration with Linde EOX Sdn. Bhd., and includes a plant that produces hydrogen through electrolysis, as well as a refuelling station to initially serve three hydrogen fuel cell electric buses imported from China under the ownership and management of Sarawak Economic Development Corporation (SEDC). Sarawak is believed to have two key competitive advantages as a potential hydrogen producer its industrial electricity tariffs are highly competitive at both national and regional level and renewable hydropower dominates its generation mix renewable hydropower which can be used to produce green, carbon-neutral hydrogen.

Hydrogen fuel cell electric vehicles ("FCEVs") are expected to become more affordable than BEVs in the future. Based on analysis by Deloitte, the total cost of ownership of FCEVs is forecasted to be less than BEVs by 2026, and less than that of ICE vehicles around 2027. This is because the majority of fuel cell system costs are manufacturing-cost associated due to high technological requirements, instead of materials cost. This leaves significant room for cost improvements as production ramps up to achieve economies of scale. In comparison, commodity-type raw materials (such as lithium and cobalt) make up a significant portion of total costs of BEVs.

Given that the cost of lithium-ion batteries having plummeted substantially, they are likely to remain the dominant technology for the foreseeable future. They are now 30 times cheaper than when they first entered the market as small, portable batteries

FCEVs are also refuelled similarly to ICE vehicles and thus have very short refuelling time compared with the charging time for BEVs. Additionally, FCEVs is found to have the lowest environmental impact and greenhouse gas emissions across its

MALAYSIA

lifecycle compared with BEVs and ICE vehicles, and there is still room for improvement from increased use of renewable energy in hydrogen production. Given the potential for hydrogen production in the country and the advantages of FCEVs over BEVs, the possibility of manufacturing of FCEVs in Malaysia should not be overlooked.

REGULATING THE FUTURE OF MOBILITY

Creating an ecosystem that promotes EV

mobility through the adoption of EVs. Effective policies has to be implemented which facilitates EV infrastructure and caters for the transition towards electrification of transportation.

Hence, government support of the EV market is crucial for widespread adoption to occur. Much of this transition is going to depend on government support and infrastructure build out in terms of grid readiness to support the increase in electricity demand and also availability of charging stations to enable higher take up of EVs.

Regulating the future of mobility is complex and challenging as it involves the need to foster innovation, stimulate economic wealth, improve safety and increase access to transportation. This extends far beyond the need to ensure the vehicle's ability to safely navigate the streets.

According to Roslan Abdullah, the CEO of Proton Edar, a feasibility study conducted on investment and sales of EVs shows that it does not match, meaning it is not a positive investment yet.28 The limited investments means EVs are more exclusive and expensive in Malaysia. Considering also the charging anxiety that is still prevailing among those intending to switch to EV, there is a huge gap to bridge to achieve sustainable urban

Having government policy which provides practical incentives and firm framework that promote long term investment in the development and adoption of EVs is important as an enabler. Clear guidance on the standards of EVs that would meet regulatory requirements is crucial as automakers and technology companies are investing heavily in the development of the EVs to avoid efforts having to be abandoned for failing to meet regulatory approval.

Regulators have to craft a more forward-looking and comprehensive approach to this new mobility technology to ensure a mobility ecosystem that is more efficient, effective, and inclusive.

WHERE DO WE BEGIN?

Decarbonisation strategy

To put Malaysia on a path towards a future of sustainable transport, transport electrification should be recognised as a key pillar of the nation's decarbonisation strategy to reduce emissions at national level. A decisive government policy push is required to unlock a much-needed investment and fast-track EV industry growth and charging infrastructure development.

The Path Forward For EVs In Malaysia

EVs may still be considered niche and unaffordable currently but they are expected to completely replace ICE vehicles in the next few decades.

Social influence, financial benefits, environment concerns, infrastructure readiness, and government intervention are some of the factors affecting the acceptance of EVs. Even though the government has introduced schemes such as free charging and reduction in EV road tax, there is still no policy in place to promote incentives for people to own an EV. Some schools of thought believe that the accumulated cost savings from the free charging, not buying fuel and the reduction in road taxes is significantly low compared to the cost difference between conventional ICV and an equivalent EV.29

It is acknowledged that the transition to EVs takes time but we must plan ahead and set targets to be achieved in stages or phases in order to meet our goals.

Setting Realistic Goals

Relevant measures should be put in place to ensure that Malaysia's National Electric Mobility Blueprint targets of having 100,000 EV, 100,000 electric motorcycles, 2,000 electric buses, and 125,00030 charging stations can be achieved by 2030.31

Education and awareness campaign

The subject of sustainability should be incorporated into the curriculum to educate children on the need and importance of preserving the environment and the issues that could arise from climate change as education should begin from schools. Nurturing a sustainable culture and living should be at the forefront of the governments' policies, private sectors' agenda and individual aspirations.

23 MALAYSIA

Promoting Locally Manufactured EVs

The Ministry of Environment and Water, together with MGTC, have prepared a Low Carbon Mobility Blueprint 2021-2030. Notably, there is an allocation for support of manufacturers of local EVs, which clearly indicates the government's expectation for EVs to be manufactured locally. Promoting EV projects such as the MyKar will be a step forward where it demonstrates that locally-manufactured EVs are technologically and commercially viable.

In March this year, Volvo Car Malaysia has announced its plan to produce its first assembled EV, by manufacturing the CKD unit of EVs at its local manufacturing facility. With this, it will be the first automative brand in Malaysia to complete a PHEV line for all its car models.32

The MyKar A prototype EV developed by a Malaysian start-up company, EV Innovations Sdn. Bhd., a subsidiary of System Consultancy Services Sdn. Bhd. Designed and built in Malaysia, it was developed in the hope that the EV technology would eventually be applied in a locally-manufactured EV.

Objective To highlight the potential of a locally-manufactured EV that is both technologically advanced and economically viable for the Malaysian and ASEAN automotive markets.

Future Plans EV Innovations has signed a Memorandum of Agreement with MARii to collaborate in developing local technologies for application in the MyKar, including a battery management system and EV wireless charging technology. At least another five units of the MyKar will be manufactured for testing and homologation, allowing the MyKar to progress from a prototype to a roadworthy vehicle.

Stronger as ASEAN

Malaysia is strategically located for trade within ASEAN. Coordinated transportation systems with an electrified rail and EV recharging network could also be promoted within the ASEAN region. The promulgation of an ASEAN Grid will also enable ASEAN countries to share their connected electricity grid to meet the increase demand for electricity from the wide adoption of EVs.

The ASEAN Business Advisory Council (ASEAN-BAC) 2020, ASEAN BAC Malaysia has collaborated with CARI ASEAN Research and Advocacy in publishing the report entitled "Pathway Towards Recovery and Hope for ASEAN or Pathway 225" to capture recommendations by the private sector in Malaysia in response to the major developments in Malaysia. It has identified the following five Es as the road to recovery from this pandemic. We believe these can similarly apply to making Malaysia as a hub for the development of EVs in the ASEAN region:

ECONOMY

The economy must be stimulated by increasing government spending and implementing projects to create jobs and increase employment. The benefits of these projects should be spread out to various stakeholders in line with `shared prosperity' championed by the government.

EMPLOYABILITY

We must focus on enhancing employment rates by creating economic activity, supporting businesses, implementing upskilling and reskilling programmes and leveraging gig-economy and global employment opportunities.

EDUCATION

We must offer fast-track training opportunities to create a futureready workforce that bridges the skills gap if we hope to realise Malaysia's vision to become a digital nation. Infrastructure alone will not be enough to attract FDI and convince tech giants to consider Malaysia as their regional hub.

ENTREPRENEURSHIP

Entrepreneurs must be given access to training, money, markets, and mentors. We need to help our entrepreneurs become more tech-savvy so they can compete globally.

EMPATHY

Both the public and private sector should explore ways to give back to help businesses and individuals who have been negatively impacted by the repercussions of the pandemic. We are all in this together.

MALAYSIA

Malaysia has to work harder in competing with some of its neighbouring ASEAN countries who can offer lower-cost for investors and are more business-friendly. Seizing the ecosystem opportunity in mobility requires a new mindset, informed decisions, and strong conviction. Malaysians will have a great deal of national pride if there are EVs manufactured by Malaysian car companies. Malaysia Automotive, Robotics & IoT Institute chief executive officer, Datuk Madani Sahari, said in a recent panel discussion that "now is the right time to push for the EV agenda, as all parties are converging and the right incentives will help pivot from their existing operations". She further added that "among the low-hanging fruits to encourage EV adoption are tax incentives, including for complete built up (CBU) models, to allow importers to properly gauge demand before deciding to expand production through the complete knock-down (CKD) approach, that will also bring down the price".

The future of mobility will likely challenge regulators as they seek to balance multiple, potentially competing priorities: fostering innovation and economic growth while ensuring the public good; weighing near-term safety against long-run societal benefits; playing the role of a catalyst, convener, and transit operator in addition to rulemaker.

As such, to drive EV uptake, a decisive policy push will be required to unlock much-needed investment, as well as to fasttrack industry growth and charging infrastructure development. To put Malaysia firmly on a path towards a sustainable future of mobility and to future proof its automotive industry, it is imperative for policymakers and investors to collaborate, and capitalise on strategic partnerships with public and private sectors in ASEAN to pivot to EVs.

25 MALAYSIA

MALAYSIA ENERGY EFFICIENT VEHICLES: PATHWAY TO LOWERING MALAYSIA'S

PART II TRANSPORTATION CARBON FOOTPRINT

Transportation Fueling Our Growing Greenhouse Gas Problem

Since 1980 until 2018, there has been a growing demand for energy in Malaysia. As our nation developed, driven by the manufacturing sector, our economic status improved and our purchasing power grew stronger. We were able to afford things that made our lives easier and more comfortable, electric appliances for example and air conditioning in particular. We also became more mobile and many more households owned a car or even two. Motorcycle ownership also increased as a relatively cheap mode of transport. All this consumer demand locally and globally meant the industries involved in meeting this supply, from the power sector to the manufacturing sector to the agricultural sector also ramped up production in tandem.

The increase in human activity has unfortunately led to an increase in greenhouse gas ("GHG") emissions. On a global level, we emit an eye-watering 50 billion tonnes of GHG each year with 16% from transportation,1 mainly road transport which includes cars, trucks, lorries, motorcycles and buses. GHG emissions from the transportation sector is primarily a function of fossil fuel energy consumption i.e. combustion.2 It is also estimated that around 95% of the world's transportation energy comes from petroleum-based fuels, largely petrol and diesel.

transportation stood at 55,188 Gg (21%) of total CO2 emissions in 2016, the second highest source of carbon emission after power generation. Between 1990 and 2016, the average annual growth rate was 5.9%.

Where We Stand In Malaysia

In Malaysia, the transportation sector is also a major contributor of GHG emissions. In 2018, transport accounted for 36.4% of energy consumed, making it the highest consuming energy consuming sector. Similar to the global experience, road transport dominates and accounted for approximately 90% of usage.3 From a CO2 point of view, emissions from road

Source: Energy Commission, `Malaysia Energy Statistics Handbook 2020' (2021) p 46

All these numbers starkly highlight that in order to address the climate crisis we are facing, we need to see a tenfold increase in our efforts to reduce the GHG emissions from transportation.

MALAYSIA

Just Stop Driving?

transits ("MRTs"), did not develop as rapidly. Our first LRT system began operating in 1996 while our first MRT started serving commuters in July 2017.5 While the bus system have been in place since the 1970s,6 reliability, and for a while connectivity, has always been an issue.

Source: `Clothes dryer vs the car: carbon footprint misconceptions' (Financial Times)

According to calculations published by the Financial Times,4 not owning a car ranks as the best way to reduce our carbon footprint compared to other advisable measures. However, most Malaysians will not be able to "give up" travelling by road even with the knowledge of the devastating effects of GHG emissions on the environment.

huge spaces reserved for parking ones vehicle, from rectangle boxes marked out along the road to multi-level parking lots. Places which stand empty half the time once we return to our homes. This issue is explored further by Hua Sia Yen in her article "Green Mobility An Essential Element of Sustainable Cities

and Communities".

Urban development has for a better At the same time, our urban public part of the last century centered on transportation sector, in terms of light catering for personal transportation rail transport ("LRTs") and Mass rapid

Overall, reducing the number of carbon emitting vehicles on the road entails a combination of measures. This includes providing viable alternatives to road transportation better public transport, low carbon emission and electric vehicles, shifting freight mode from road to electric powered rail system to looking into our urban planning and how we live, work and play.

However, road transportation will continue to be a major mode of transport in the immediate future. This article will focus primarily on the role that energy efficient vehicles ("EEVs") can play in de-carbonising land transportation as well as the accompanying measures needed. A snapshot of the key policies and legislation supporting sustainability efforts in in Malaysia's transportation sector will be discussed. While carbon emissions from the aviation sector is also an area that needs to be tackled, it will not be covered in this article.

Sustainability In The Transport Sector - Policies And Regulatory Framework

POLICIES

Recognising the need to balance environmental concerns and sustainability with the increasing mobility of the population, the Government of Malaysia has over the last 20 years or so been formulating and implementing a host of policies and initiatives aimed at the de-carbonising Malaysia's transportation sector.

1991

Natural Gas for Vehicles Program

Among the focus points of the Sixth Malaysia Plan (19901995) and the Seventh Malaysia Plan (1996 2000) for the energy sector was to increase the role of natural gas in the country's energy mix. This program was implemented by PETRONAS in 1991 in the Klang Valley during the push for diversification of Malaysia's energy mix but compared to petroleum and diesel, remains limited in its use.7

2005

National Biofuel Policy

The fast depletion of fossil fuels, coupled with the increasing awareness of environmental issues, concern for increasing GHG emissions and escalating petroleum prices led to the formulation of this policy, spearheaded by the Ministry of Plantation Industries and Commodities Malaysia.

The policy aimed to position Malaysia as a major global biodiesel producer and envisioned that biofuel would be one of the five energy sources for Malaysia to be used for transport, industry, technologies, export and for a cleaner environment.

27 MALAYSIA

2010 2014

Among the initiatives proposed in the policy was the establishment of the Malaysian Standard specification for B5 diesel (a blend of 5% palm biodiesel with 95% diesel petroleum) and having B5 diesel pumps at selected petrol stations and to gradually increase the proportion of processed palm oil in the diesel blend. The current mandate is B10, which is a blend of 10% palm biodiesel with 90% diesel petroleum. There is a proposal to manufacture biofuel with a 20% palm oil component i.e. B20 palm oil biodiesel but due to the COVID-19 pandemic, this nationwide mandate has been delayed from mid-2021 to the end of 2022 for the transport sector.8 At the moment, it has only been implemented in Langkawi, Labuan and Sarawak.9

Clean Air Action Plan

This action plan presents a set of strategies and indicators that together provide a roadmap to achieve better air quality by reducing the frequency, severity and duration of poor air quality episodes. In the implementation of this clean air action plan, a co-benefit that arises is in terms of reducing GHG emissions and combating global warming. Major contributors to GHG emissions are targeted in the plan including motor vehicles.

A snapshot of the action plans and targeted time frame is set out below.

NO. ISSUES

STRATEGIES

ACTIONS

1.0 EMISSIONS

MOTOR VEHICLES EMISSION REDUCTIONS

FROM MOTOR VEHICLES

1.1

Vehicle technology, fuel

a)Introduce progressive plan for implementing more stringent

quality, inspection

vehicle emissions standards for

and maintenance

all new vehicles.

b)Review and upgrade existing fuel quality (specifications).

c)Promote and support conversion to NGV.

d)Promote and support the use of environment-friendly fuel such as biofuel.

1.2 Enforcement a)Review existing emissions standards.

b)Carry out stringent enforcement actions against smoky vehicles on the roads

Source: Department of Environment, Malaysia, `Clean Air Action Plan' p 19

TIME-FRAME TARGET YEARS

Short-term

2021

Long-term

2015-2017

Short-term Short-term

Immediate & on-going

Short-term

2011

Short-term

Immediate & on-going

National Automotive Policy

The National Automotive Policy 2014 was issued by the Ministry of International Trade and Industry (MITI) ("NAP 2014") and it is a revision of the NAP 2006 with a focus on green initiatives, development of technology and human capital, market expansion and enhancement of the automotive industry.

In line with this, the objectives include the reduction of carbon emission; making Malaysia the regional automotive hub in EEVs through strategic investments; adaptation of high technology for domestic market; and to penetrate regional and global markets by 2020. The NAP 2014 also introduced the official classification of EEVs, which is detailed further below.

Under NAP 2014, six roadmaps were established to support its implementation:

Malaysia Automotive Technology

Roadmap (MATR)

Malaysia Automotive Supply Chain Development Roadmap (MASCR)

Malaysia Automotive Human Capital

Roadmap (MAHR)

Development of Automotive Authorised Treatment

Facilities Framework (ATF)

Malaysia Automotive Bumiputera Development

Roadmap (MABDR)

Malaysia Automotive Remanufacturing Roadmap (MARR)

MALAYSIA

2020

2019-2030

National Automotive Policy

The National Automotive Policy 2020 ("NAP 2020") continues the objectives of NAP 2014 including its EEV policy. It also provides for certain enhancements to Malaysia's automotive in the era of digital industrial transformation. Among others, the enhancements include the introduction of new advance technology elements, namely Next Generation Vehicles, Mobility as a Service and Industrial Revolution 4.0.10

Under NAP2020, Malaysia aims to develop critical components in the production of EVs between 2020 and 2024. These critical components include the battery management system, thermal management system, battery pack and capacity.

National Transport Policy

On 18 October 2019, Malaysia launched the National Transport Policy to serve as the overarching roadmap to guide relevant federal ministries and agencies as well as State Governments and local authorities11 in the development an efficient, comprehensive, secure and sustainable transport sector. The aim of the policy is to enhance Malaysia's economic competitiveness and support the well-being of its people.

In line with the United Nations Development Programme's Sustainable Development Goals, the policy include the advancement towards a green transport ecosystem. The thrust of the policy aims to address the following issues: air pollution, particularly GHG emissions from all modes of transport; unsustainable consumption of resources; poor waste management, particularly disposal of old vehicles and logistics waste; water pollution, particularly discharge of oil, chemicals, waste and ballast; noise pollution; high fuel consumption especially in the land transport; and compliance with environment laws, both national and international.

The five major strategies that will be employed are:

2021-2030

enforcing compliance to acts/regulations and shift towards environmental

standards

prioritising public transport

network as a fundamental structure in urbanised areas

accelerating implementation of low carbon

mobility initiatives

instituting measures to control pollution,

noise and waste from the transport sector

developing effective communication, education and public awareness (CEPA) to create behavioral change

The measure of success will be the achievement of 45% of GHG emissions intensity of GDP by 2030 across all its key emitting sectors, adoption of cleaner fuel such as biodiesel and electric vehicles and the increase in public transport modal share.

Low Carbon Mobility Blueprint Decarbonising Land Transportation

In line with the National Transport Policy action plan to accelerate the implementation of low carbon mobility initiatives, the Ministry of Environment and Water together with the Malaysian Green Technology and Climate Change Centre released the Low Carbon Mobility Blueprint on April 2021.

1234

GHG emissions and energy reduction via vehicle fuel economy and emission

improvement

GHG emissions and energy reduction via electric mobility adoption in strategic

applications

GHG emissions and energy reduction via alternative fuel

adoption

GHG emissions and energy reduction via

mode shift

The Low Carbon Mobility Blueprint at the time of publishing has yet to be approved by Cabinet and it remains to be seen whether all the proposals will be adopted.

MALAYSIA

2021-2025

12th Malaysia Plan

The 12th Malaysia Plan, coordinated by the Economic Planning Unit, sets out the development plans, ideas and policies for the nation over a five-year period with the objective of a Prosperous, Inclusive, Sustainable Malaysia. The plan builds on the Government's commitment to sustainable development, introduced under the preceding 11th Malaysia Plan (2016 2020) with one of the core theme's being advancing green growth for sustainability and resilience.

Under this core theme, implementing a low-carbon, clean and resilient development is a key priority area. A low carbon mobility blueprint will be introduced to guide the planning, implementation, monitoring and evaluation of green mobility initiatives and it is likely that this is a reference to the aforementioned Mobility Blueprint [awaiting Cabinet approval].

Among the low-carbon strategies highlighted in the 12th Malaysia Plan is the enhancement of green mobility through: Promotion of the usage of green vehicles as a preferred mode of transport to drive the transition to

green mobility. Review of incentives provided to local manufacturers to produce green vehicles and purchase of these

vehicles by consumers. Making mandatory an energy-efficient driving programme for all classes of vehicles. Adoption of fuel economy standards to increase fuel efficiency for new vehicles will also be encouraged. Expansion of the B20 biodiesel programme that contains 20% palm methyl ester throughout the country

in stages. Introduction of the B30 programme at the end of the 12th Plan to further increase the use of biofuel. Encouraging the private sector to invest in advancing next generation vehicles, technologies and

supporting infrastructure, such as energy-efficient, hydrogen-powered and electric vehicles, and their charging stations. Triple-helix collaboration (i.e. among three key players, namely academia, industry and government) will be intensified, while the green-related incentive schemes will be enhanced (such as Green Technology Financing Scheme (GTFS), Green Investment Tax Allowance (GITA) and Green and Income Tax Exemption (GITE).

2022

Budget

Budget 2022, tabled on 29 October 2021, seeks to support the development of the EV industry and encourage domestic demand in line with the Low Carbon Mobility Blueprint and NAP 2020. The Budget introduces tax exemptions and reliefs for passenger vehicles, motorcycles and commercial vehicles. The proposal includes 100% import duty and excise duty exemption for completely built-up (CBU) EVs from 1 January 2022 to 31 December 2023, 100% import duty exemption on components for locally assembled EV) and 100% excise duty and sales tax exemption for completely knocked-down (CKD) EVs from 1 January 2022 to 31 December 2025.

The proposal also includes road tax exemption of up to 100% for EVs and individual income tax relief of up to RM2,500 for the costs of installation, rental, purchase (including equipment hire-purchase) or EV charging facility subscription fees.

LEGISLATION

Malaysian Biofuel Industry Act, 2007

The Act creates a blending mandate for palm oil biodiesel with petroleum diesel. It also establishes a regulatory regime for the licensing of blending, storage, transportation, and export of biodiesel from palm oil. Currently, the Act only regulates

palm olein and methyl ester. Based on the Malaysian Biofuel Industry (Blending Percentage and Mandatory Use) Regulations 2019, the mandatory biodiesel blend for Diesel Euro 2 is B1012 whereas for Diesel Euro 5, the mandatory biofuel blend is B7.

MALAYSIA

The Environmental Quality Act 1974

The Environmental Quality Act 1974 ("EQA") provides that unless licensed, no person shall emit environmentally hazardous substances, pollutants or wastes into the atmosphere beyond acceptable conditions.13 Under section 21 of the EQA, the Minister, after consultation with the Council may introduce regulations specifying acceptable conditions for the emission, discharge or deposit of environmentally hazardous substances, pollutants or waste.

The existing regulations under the EQA sets pollution standards for petrol,14 diesel15 and motorcycle16 engines. These regulations generally prohibit in Malaysia the manufacture and import of such engines that release into the atmosphere, pollutants (namely carbon monoxide (CO), hydrocarbons (HO) and nitrogen oxides (NOx)) above the permitted level.

Environmental Quality (Control of Petrol and Diesel Properties) Regulations 2007 and the Environmental Quality (Control of Petrol and Diesel Properties) (Amendment) Regulations 2021

These regulations provide for the standards of properties applicable to petrol and diesel, which is allowed to be produced, stored, distributed, transported, supplied, sold or offered for sale within Malaysia.17

Pursuant to the 2021 amendment regulations gazetted on 26 March 2021, the EURO2M standards introduced in 2007 for petrol and diesel has been replaced by the EURO5 standard. EURO5 refers to exhaust emission standards of new vehicles sold in the European Union.

However, the relevant properties and test methods that are applicable to the petrol and diesel standards will be introduced on a staggered basis, with diesel standards being introduced from 1 April 2021 to 1 April 2023 while the new requirements for the petrol standards being introduced from 1 September 2025 to 1 September 2027.

De-Carbonisation Through Energy Efficient Vehicles

One of the measures to address the rising GHG emissions from vehicles is to switch to EEVs.

Energy Efficient Vechiles

EEVs are defined as "vehicles that meet a defined specifications in terms of carbon emission level (g/km) and fuel consumption (l/100 km)."

EEVs INCLUDE:

Fuel Efficient Vehicles

Hybrids

EVs

Alternativelyfuelled Vehicles

(e.g compressed natural gas, liquefied petroleum gas, biodiesel, ethanol, hydrogen and fuel cell)18

EEVs contribute to lowering GHG emissions because when less petrol is consumed, less GHG is emitted. This is achieved either through efficiency, i.e. a vehicle consuming less fuel to cover the same distance, using alternate fuels such as biodiesel and ethanol, which burn cleaner than petrol (which is carbon based), resulting in fewer GHG emissions19 or complete avoidance, i.e. through electric vehicles which emit zero emissions. In the current Malaysian market, vehicles that meet certain prescribed vehicle performance standards can be recognised as an EEV and enjoy the incentives mentioned earlier.

Notwithstanding that the definition of EEVs also includes specifications in terms of carbon emission level (g/km), at

present only the level of fuel consumption based on the type and curb weight of the vehicle forms part of the assessment whether a relevant vehicle is energy efficient, which is set out in NAP 2014.

(A) For Passenger and Commercial Vehicles

SEGMENT DESCRIPTION

B C

E F J Others

Micro Car City Car Super Mini Car Small Family Car Large Family Car Compact Executive Car Executive Car Luxury Car Large 4x4 Others

KERB WEIGHT (KG)

801-1,000 1,001-1,250 1,251-1,400

1,401-1,550

1,550-1,800 1,801-2,050 2,051-2,350 2,351-2,500

FUEL CONSUMPTION (L/100KM)

4.5 5.0 6.0 6.5

7.0

9.5 11.0 11.5 12.0

31 MALAYSIA

(B) For Two Wheelers

Engine Size (cc)

50-100 101-150 151-200 201-250

Fuel Consumption (L/100KM) 2.0

2.2

2.5

3.0

Source: Malaysia Automotive Association, `National Automotive Policy (NAP) 2014' p 7

It is worth noting that when NAP 2014 was published, EURO 2M was the prevailing fuel quality standard and the reason why the criteria applied to EEVs would be based on fuel consumption and not carbon emission based. This was because with the lower standard EURO 2M, it would be not be possible to meet any meaningful carbon mission standards. As such it was further stated that carbon emission standards would only be used once the EURO 4M standard was introduced.20

Measures To Enhance EEV's Decarbonisation Role

INTRODUCTION OF VEHICLE PERFORMANCE STANDARDS

While it is commendable that the Government has introduced EURO 5 and is encouraging the purchase of EEVs in Malaysia through the incentives mentioned above, the only way to truly make a significant reduction in carbon emissions is to completely stop the entry of new cars that are not EEVs unto our Malaysian roads. This can be achieved by introducing regulation implementing vehicle performance standards for all vehicles, which is one of the most effective ways to reduce carbon emissions and improve fuel consumption.

Vehicle performance standards or fuel economy standards set maximum allowable levels of fuel consumption or GHG emissions per unit distance traveled. Their objective is to ensure that all vehicles achieve certain minimum performance targets. This thereby raises the vehicle fleet's energy efficiency and reduces emissions. As such, vehicle performance standards can achieve both reductions in GHG emissions and reduce our dependency on petrol.

Effectively, this means that vehicles that do not meet a minimum vehicle performance standard will not be allowed to be manufactured, assembled, imported or sold in Malaysia. This includes second-hand and reconditioned vehicles in order to avoid Malaysia becoming a dumping ground for high carbon emitting vehicles. With other nations tightening their regulations on carbon emitting vehicles, countries which do not have such standards will be at the receiving end of the high carbon vehicles.

This approach is similar to the minimum energy performance standards ("MEPS") that are applicable to certain prescribed equipment in Malaysia such as air-conditioning, lights, televisions and refrigerators.21 The performance standards that are set for manufacturers and importers should also not just pay lip service to carbon emission reductions. They should be sufficiently aggressive in order to drive technological advancements rather than being easily met.

INCORPORATING CARBON EMISSION BASED STANDARDS

As combating the climate crisis is our most pressing goal, reducing GHG emissions must be the main target. Carbon emissions standards ought to be introduced as part of Malaysia' vehicle performance standards. Not only do emission based standards better account for leaking refrigerant from air conditioning systems,22 it also brings into focus our main target i.e. the reduction of CO2. Fuel consumption standards are useful but for Malaysia, fuel efficiency is not the biggest consideration in light of our petrol prices being among the lowest in the region.23 Even though fuel subsidies have generally been removed in 2014, RON95, the most commonly used vehicle petrol, and diesel is subject to a ceiling price of RM2.05 and RM2.15 respectively.

An example of how this can be achieved is by amending the current environmental quality regulations, which control the emissions from petrol engines, diesel engines and motor vehicles to also include CO2 emission levels. When the emission standards were promulgated in the late 90s and early 2000, its main target was the preservation air quality. While the currently regulated emissions of carbon monoxide (CO), hydrocarbons (HO) and nitrogen oxides (NOx) are indeed harmful to the environment, there is no cap on CO2 emissions, the main GHG produced by fossil fuel combustion.

GHG emissions and its ability to exacerbate the impact of climate change were not on the radar of most people. However, it is undeniably a different story today. As the EURO 5 standard have now been introduced, it would be timely to now introduce carbon emission standards for EEVs, which we understand is being contemplated at the moment.24

MALAYSIA

PERIODIC REVIEW AND TIGHTENING OF STANDARDS

Having vehicle performance standards is a good starting point but they must not be left to stagnate. There must be continuous tightening of vehicle performance standards, which must be made known several years' in advance in order for automakers to plan ahead in terms of investment.25 In that way, manufacturers will be compelled to work on improving their technology.

As such, any regulations implementing vehicle performance standards must have a built in periodic review mechanism. This is similar again to the regulations governing MEPS which has a five-year obligatory review for the relevant equipment to ensure that the energy efficiency standards are kept up to date.

fuel standards as again, it would make an already pricey vehicle even more expensive while running on a lower standard fuel.27 The increase in vehicle cost makes may mean a big proportion of the population, predominantly the lower and middle income group, will be deprived of owning their own mode of transport. While arguably this is good for the environment, it can hinder development unless our public transport system can correspondingly meet the travel needs of the Malaysian population from an affordability and connectivity point of view. As such, until engines

manufactured in Malaysia are ready to meet the higher standards, there would not be much point to introduce higher fuel standards.

The draft Low Carbon Mobility Blueprint's action plan proposes a regulation update requiring new vehicles to meet the EURO 6 fuel standards by 2030 for petrol and diesel engines. This is a welcome move and amendments should be made with enough lead time in order to give sufficient time for local manufacturers to plan their investment horizon.

An example where standards languished for far too long would be our emission standards. The Clean Air Action Plan was issued in 2010 with certain action plans and target years to improve fuel quality specifications and address emission from motor vehicles. The NAP 2014 also mentioned progressive plans for tightening emission standards and reviewing emission standards and it was expected that a EURO 4 roadmap would be announced within the same year.26 However, it has taken us 14 years to move from the EURO 2M standard (2007) to EURO 5 (2021).

However, any introduction of higher fuel standards must be in step with the technological capability of current engines in the local market to run on such higher standards. The effect on the stakeholders along the transportation value chain, from fuel suppliers, local vehicle manufacturers, importers, dealerships, testing facilities and the ultimate consumers must be taken into consideration to avoid the knock on effects. For fuel suppliers, unless the vehicle engines are built to run on higher fuel standards, any benefits from a carbon emission standpoint will be negligible. For local manufacturers, improving the design and technology to produce vehicles which emit less carbon comes with a corresponding increase in the price tag as engines that run on higher standards are more expensive.

COMPLETE MOVE TO FULLY ELECTRIC VEHICLES

While having cars that burn less fuel is good, the reality is fuel is still being burnt and CO2 is still being released. The ultimate goal would be the total phasing out of fossil fuel vehicles and a complete switch to battery electric vehicles, which are electric vehicles with chargeable batteries and no internal fuel combustion engine. However, until our electric vehicle infrastructure and ecosystem are in place, the goal of completely phasing out fossil fuel vehicles will have to wait for now. This is further discussed in the article "Future of EVs in Malaysia: Towards a More Electrified and Sustainable Economy".

At the same time, we must also bear in mind that even as we increase the number of electric vehicles on the road, the source of electricity in Malaysia is 80% generated by coal and gas.28 While this percentage is projected to decrease as we increase our use of renewable energy, our electricity will still be about 70% produced by fossil fuels. While it is acknowledged that EVs in Malaysia may not be completely GHG emissions free, the advantages outweigh this but it must go hand in hand with our efforts to increase our renewable energy efforts.

There is also no incentive to import foreign brands into Malaysia with low emission engines that can run on higher

Source: Energy Commission, `Report on Peninsular Malaysia Generation Development Plan 2020 (2021 2039)' (March 2021) p 12

MALAYSIA

TAX REBATES AND INCENTIVES New vehicles

While there is a growing awareness of climate crisis and the devastating effect of GHG emissions on our planet, most purchases are not made with future environmental concerns in mind, especially when faced with the higher upfront cost and the perceived savings are insufficient. As such, the Government needs to design a basket of appropriate taxes or levies balanced with appropriate rebates in order to push consumers to purchase an EEV. For example, tax should be imposed at the point of purchase based on the carbon emitting level of a vehicle in order to reflect the environmental cost of vehicles that are more polluting. At the same time, the revenue collected from such taxes can go towards rebates for EEVs such as, fully electric vehicles or hybrids with zero or minimal carbon emissions.

MALAYSIA

End-of life scrapping incentive for high emission vehicles

While carbon based vehicle emission standards and the earlier mentioned taxes and rebates ensures new vehicles on the road have a lower carbon footprint, there is still a huge stock of high carbon emitting vehicles on the road. As such, there must be measures to tackle these existing vehicle stock on the road. Appropriate incentives need to be put in place to encourage owners to scrap their older polluting models in order to take them off the road. For example, in 2009, Japan introduced a "cash-for-clunkers" programme that paid drivers a certain amount for scrapping vehicles above a certain number of years in return for buying a vehicle that meet fuel efficiency standards.29

The Road Ahead

Reducing carbon emission from transportation is a crucial part of the strategy to fight the climate crisis. At the same time, we have the need to be mobile, to move from place to place for commerce, leisure, work and a myriad other reasons. As such, we need to transform how we get around. We must work towards making every vehicle on the road an EEV one. The Government must prioritise this goal and put in place concrete plans and timelines to ensure our future mobility is a zero carbon one.

MALAYSIA GREEN MOBILITY: AN ESSENTIAL ELEMENT OF

PART III SUSTAINABLE CITIES AND COMMUNITIES

Decade of Action and Delivery for Sustainable Development

At the Sustainable Development Goals ("SDGs") Summit in 2019, United Nations SecretaryGeneral Antnio Guterres called for a global Decade of Action, based on the risk then as now that the world will fail to achieve the goals of the 2030 Agenda for Sustainable Development.

Climate change, species loss and rising resource consumption are quite clearly pushing the Earth's boundaries. Equally as urgent is the need to resolve questions of equity between generations and regions. This prompted the United Nations to call, at the SDG Summit, for the next ten years to be the Decade of Action or, strictly speaking, the "Decade of Action and Delivery for Sustainable Development". The only chance of still achieving the SDGs lies in a concerted effort by the international community and each individual state to move much more quickly and ambitiously in implementing the 2030 Agenda.

Our government should therefore pick up the pace on the path to greater sustainability, both at home and in international cooperation. The pressure to act has intensified worldwide in the face of the COVID-19 pandemic. This difficult time has nonetheless brought us to the growing realisation that global challenges can only be overcome with by global efforts.

Make cities inclusive, safe, resilient and sustainable

One of the SDGs is to make cities inclusive, safe, resilient and sustainable. The world is becoming increasingly urbanised.

sanitation systems, roads and transport), worsening air pollution and unplanned urban sprawl.1 By 2030, one of SDG 11's targets is to provide access to safe, affordable, accessible and sustainable transport systems for all, improving road safety, notably by expanding public transport, with special attention to the needs of those in vulnerable situations, women, children, persons with disabilities and older persons.

It is no doubt that green mobility is an Rapid urbanisation is resulting in a growing number of slum dwellers, inadequate and essential element of sustainable cities overburdened infrastructure and services (such as waste collection and water and and communities.

35 MALAYSIA

HERE WE LOOK AT SOME OF THE WORLD'S MOST SUSTAINABLE CITIES AND WHAT MAKES THEM SO SUCCESSFUL

Canberra became the first Australian jurisdiction in 2019 to be powered by 100% renewable energy. In 2019, the Australian Capital Territory ("ACT") government unveiled its new climate action strategy, which provides a roadmap for reaching its target of net zero carbon emissions by 2045.

The strategy includes dozens of measures covering transport, housing, waste management and urban planning. The strategy seeks to accelerate the uptake of electric vehicles in the ACT, flagging the potential for discounts on vehicle registrations and low interest loans. Walking, cycling and the use of public transport would also be encouraged through the design of new housing developments.

Canberra, Australia

Canberra, Australia is leading the way on green transportation. An incredible 88.6% of Canberra's transport infrastructure is green, with a vast network of public transport options. You can get almost anywhere without a car. The city also runs a ridesharing service, encouraging people to travel as groups and cut back on solo driving.2

The government considered introducing a scheme in which developers would be able to contribute to "sustainable transport projects" instead of building a car park. Thousands of new trees will be planted on Canberra's streets, with the government setting a target of 30% canopy coverage across the city by 2045. In 2019, the city had about 21% tree canopy coverage. The government has committed to achieving the emissions target without purchasing carbon offsets.3

Eco incentives are at the forefront of Copenhagen's priority list. The capital is set to become the first CO2-neutral city by 2025. More people enjoy cycling than using a vehicle to get around, with only 29% of households owning a car, and the city has introduced even more cycle lanes. The popularity of cycling has increased even further, as most hotels across the city now provide guests with bicycles. It has become one of the most bicycle friendly cities in the world. In addition, Copenhagen has adequately invested in bicycle infrastructure creating a well-connected network of bike lanes. Copenhagen's efficient bike system is integrated with other modes of transportation providing safe and convenient means for traveling through the city.

One part of the efficient cycling system is the "Green Wave" which puts the importance of the cyclists before cars.4 The Green Wave refers to a couple major bike thoroughfares that are specifically designed for cyclists. The first street to adopt this idea, Norrebrogade, has an average speed of 20.3 kilometer per hour. This is possible because the streets lights are synced with the bicyclists pace, ensuring they get all green lights into the center of city as long as they maintain the pace. The Green Wave success has provided 35,000 people with easy commuting during rush hour times and has sparked the development and expansion of two more streets, Osterbrogade, and Amagerbrogade.

With Copenhagen's environment friendly modes of transport, sensitivity to climate change, sustainable urban redevelopment, and efficient energy use tactics, the city provides

Copenhagen, Denmark

accessibility towards sustainable options. Copenhagen's success is then attributed to how accessible and livable its planned projects are for its everyday citizens.

Copenhagen uses an interdisciplinary approach to fund a defence towards climate change. According to its 2011 Climate Adaptation Plan, it is imperative that technological knowledge, combined with proper funding, produces projects that withstand anticipated flooding from the water and sewage system.5 The city is also investing in efficient energy through district heating and cooling. In this system, heat and chilled water is produced centrally and later carried out towards surrounding neighborhoods.

MALAYSIA

Copenhagen seeks to reform its current urban structures towards smarter energy use. "Retrofitting" is when old buildings are modernised with energy-efficiency in mind, without taking away the aesthetics of the architecture. Copenhagen is using this technique to decrease 10% of its electricity usage and 20% of its heat consumption by 2025.

Renovations include replacing old windows and creating insulated walls, doors, and roofs. In addition to this, green roof gardens and solar cells are added. Advanced technology is also being implemented, where buildings can come equipped with visual monitors of the overall water and energy flow throughout the structure. Advanced heat sensitive technology will be able to indicate how much heat is lost from the building.6

The energy transition and climate action transformation area (SDGs 7 and 13) demands an integrated approach based on protecting the climate. The adoption of the 2030 Climate Action Programme and the Federal Climate Change Act provided important waymarkers for the implementation of the Climate Action Plan 2050 and the binding European climate targets for 2030. Sustainable transformation requires energy consumption to be halved by 2050. Greenhouse gas emissions and economic growth must be decoupled. As a contribution to the target of greenhouse gas neutrality by 2050, energy must increasingly be generated from renewable sources. This may also open up new value-creation potential for Germany as a location for business and industry.

Berlin, Germany

With the rise in electric vehicles, Berlin has installed more than 400 charging points across the city and has encouraged citizens to think about changing vehicle type. Not only this, but residents are not seeing the need for personal cars and are opting to share with one another in a bid to save the planet.

Germany is on the right path. They already generate one third of their electricity from renewables. That significantly reduces emissions of greenhouse gases. In comparison to 1990, these emissions have been reduced by 27.7% in 2014.

The guiding principles on which the German National Sustainability Strategy are based are inter-generational equity, quality of life, social cohesion and global responsibility. Indicators are laid out in the strategy with medium and long-term objectives to be achieved.

Construction and buildings, as well as the transport sector, are addressed as part of the sustainable building and mobility transition transformation area. It links with SDGs 7, 8, 9, 11, 12 and 13. Here, too, there are synergies with other sustainability factors. Given its upstream and downstream processes, the construction and buildings sector is closely interwoven with other areas of transformation. Sustainable construction requirements cover energy efficiency and climate neutrality, biodiversity safeguards, the conservation of resources and the use of renewable raw materials, a reduction in land area use, the sustainable procurement of products and services, including respect for human rights in supply chains, and measures to ensure the health and comfort of users. All of these requirements demand an approach involving different ministries and sectors.

Taking all of the aspects into account, buildings are responsible for around 40% of greenhouse gas emissions. The German Government therefore put even more effort into promoting sustainable, climate-neutral construction, and will draw up an interministerial action plan in the course of 2021.

By way of example, emissions of greenhouse

gases are to be cut by 40% by 2020. By 2050 renewables are to account for 60% of the energy mix, while organic farming is to account for one-fifth of all agricultural activity in the

coming years.

The transformation of transportation can succeed only if mobility is recognised as an essential element of life in society that must remain accessible to all. At the same time, mobility must be increasingly responsive to environment and climaterelated concerns. To guide this process towards sustainability, in September 2018, the German Government launched the National Future of Mobility (NPM) platform. Since the beginning of 2021, further powerful leverage has come from the introduction of carbon pricing in the transport sector. There must be a particular effort to bring technological innovations and developments in alternative drive technologies and fuels etc. to market quickly, to do full justice to changing mobility needs and the role of the transport sector in climate action.7

37 MALAYSIA

Amsterdam wants to be a city in which energy is used sparingly, where they only generate energy sustainably, and where they re-use raw materials and resources infinitely. The ambitions of Amsterdam's governing bodies are clear.

Aims to reduce CO2 emissions in Amsterdam by 55% in 2030, and 95% in 2050.

The city will stop using natural gas before 2040 and within the next 10 years they will have only emission-free transport by road and water. In 2050, Amsterdam will be a circular city everything they produce and consume will be reusable. Amsterdam also wants to be a city that copes well with the effects of climate change, such as flooding, increasing periods of hot weather and drought, and changes to biodiversity.

Amsterdam, Netherlands

A wide range of measures were introduced in the Mobility Plan for Amsterdam in 2030.8 Key goals include:

Creating more space in the city centre by restricting car traffic and introducing 30km/h zones

You may associate this city with cycling, as it is the main type of transportation. However, when it comes to vehicles, the authorities are trying to reduce the number of emissions being emitted by introducing electric vehicles around the city, which has been accompanied with around 300 charging points.

While growth is inevitable, it is important that the city remains accessible to everyone. There is simply not enough room to accommodate bicycles, pedestrians, public transport and cars side by side everywhere in the city. Choices will have to be made. For example, in the future it will no longer be possible for people to claim a parking space for themselves. Amsterdam is moving from individual to collective forms of mobility, so cars are no longer to be owned, but simply to be used.

Introducing new cycle bridges and ferry services across the IJ waterway, as well as more bicycle parking

facilities (both underground and at street level)

Building more underground parking

Improving traffic flow on important routes, public transport

Building better cycle routes and cycle crossings

Adding more high-quality pedestrian areas

Setting course for sustainability at all levels

Quite apart from the COVID-19 pandemic and its implications, the global challenges facing our economic, social and ecosystems are more present than they have ever been. Action to date falls far short of what is needed to be on course for sustainable development.

Sustainable development means shaping the future with vision, imagination and creativity. It means having the courage to break new ground and try something new. It is about how we want to live in future, and how we intend to answer the questions our globalised world poses in terms of our societies and the way we do business.

The sustainability strategy is thus very far-reaching in terms of subject matter and is designed to be revised and further developed. It is a foundation for political reforms and for changes in the way businesses and consumers act. It is all about overarching responsibility for economically, environmentally and socially viable development for all generations.

International organisations, and multilateralism as an overall approach, as well as close exchange with partners in a shared community of values and interests, play an important part in global progress towards sustainability. Based on the articles on "Energy Efficient Vehicles Pathway to Lowering Malaysia's

Transportation Carbon Footprint" by Khoo Yu Lin, the Malaysian Government is committed to multilateral action and to multilateral approaches to achieve its status as a sustainable country alongside international partners.

MALAYSIA

PHILIPPINES

EV INDUSTRY IN THE PHILIPPINES: A BRIEF OVERVIEW

Introduction

The electric vehicle ("EV") industry in the Philippines has been going strong for the past few years, but some may still consider it to be in its budding state because EVs have not penetrated the mainstream market and consciousness of many Filipinos. Further, while there are policies already in place, they remain to be confined with the initiatives of administrative bodies and regulators as a more robust and encompassing legislative framework from the Philippine Congress that can cover the many facets of the EV industry is yet to emerge. Currently, the prevailing legislative framework for EVs in the Philippines is mostly in the form of incentives.

However, hope remains steady as the energy policies of the Philippines are gradually changing in response to the initiative to adopt, promote, and support sustainable and greener technologies to ensure the country's energy security and independence.1

Technology ("DOST"), and Department of Public Works and Highways ("DPWH").

These government agencies can implement their own issuances and circulars to regulate the EV industry, but as a matter of convenience and avoidance of overlaps with jurisdiction, a unified administrative issuance, or even a legislative mandate, is much preferred by many. Whether such joint administrative issuance or legislative mandate will see the light of day is unclear. Despite this, one thing is certain: these government agencies help shape the legal and regulatory environment of the EV industry. For example, the DOE has released the Philippine Energy Plan for 2017-2040, which highlights the Philippine government's goal of expanding and intensifying the promotion, adoption and commercialisation of alternative fuels and energy technologies ("AFET"), and EV is one of the AFETs being prioritised by the energy department.

The Philippine government has shown its support to the growth of the EV industry through the work of the Department of Energy ("DOE"), Department of Trade and Industry ("DTI") and its attached agency Board of Investments ("BOI"), the Land Transportation Office ("LTO") under the Department of Transportation ("DOTr"), Bureau of Internal Revenue ("BIR") and various local government units. Other government institution partners include the Department of Environment and Natural Resources ("DENR"), Department of Science and

One of the medium term goals (for the years 2019 to 2022) in the Philippine Energy Plan is to develop policy guidelines and regulatory framework for EV charging stations, and develop minimum level of energy performance for EV charging stations in accordance with the principles laid down in the Energy Efficiency and Conservation Act. Ultimately, the goal is to deploy applicable AFET, including EV, for transport and nontransport purposes from 2023 and beyond.

Figure 1: Philippine Energy Plan for 2017-2040 by the DOE.2

39 PHILIPPINES

Admittedly, the Philippine government cannot meet its medium and long term EV objectives alone. It has to coordinate and create a collaborative partnership with the private sector, including investors, funders and transport groups, so that AFET, such as EVs, can compete in the Philippine market.

Over the years, there has been a steady increase in the number of EV market players. According to the DTI, EV market players include at least 54 manufacturers and importers, 11 manufacturers of parts and components, and 18 dealers and traders. Meanwhile, according to LTO, in 2018, there were about 7,000 EVs traversing Philippine roads, majority of which are electric tricyles or e-trikes (in the Philippines, tricycles are used to carry passengers between close distances), electric motorcycles, and electric jeepneys (a mode of public transportation). There is still a lot to do to make EVs accessible to the general consuming public, as the market for EVs for personal use generates only about 1% of the entire EV market in the Philippines, with the market consisting mostly of members of the upper class.3

Current legislative framework for EVs is mostly incentive-based

As mentioned, the current legislative framework for EVs is mostly within the context of incentives.

Various stakeholders remain hopeful despite such data. In fact, the DTI and the Electric Vehicle Association of the Philippines ("EVAP"), the largest EV organisation in the Philippines, project that at least 21% of the total number of motor vehicles in the Philippines will be EVs by 2030, and the Philippines will turn into "the third auto manufacturing hub in ASEAN and a global manufacturing hub for low cost transportation and commercial vehicles".4

Projections are not the only thing the Philippine government and the private sector can work on together to forward the EV agenda. This collaborative relationship is also best illustrated through the various projects of the Philippine government, current and proposed, that are backed by the EV industry. Some of which include:5 Market transformation through the Introduction of Energy

Efficient Electric Vehicles Project, which consists of the signing of four memoranda of agreement and 36 deeds of donation with qualified local government units and national government agencies in various regions in the Philippines to deploy 3,000 e-trikes. The DOE reports that the E-Trike Project was able to attract 14 firms and inventors engaged in the business of EV manufacturing, assembly and importation with a corresponding investment of PHP562 million (approximately USD 12 million); Re-fleeting of government vehicles towards the use of alternative fuel vehicles, including EVs; Field demonstration of EV fast charger, which is a project of DOE and the DOST-Science and Technology on Energy Application ("DOST-STEA") to showcase technologies that could power up EVs faster than the usual charging methods; Lanes within Metro Manila dedicated to bicycles and electric scooters; Inclusion of electric jeepneys in DOTr's Public Utility Vehicle ("PUV") Modernisation Program, an initiative that would phase out jeepneys (patterned from World War II-type jeeps that were converted into public transport vehicles) that are of certain age, and replacing them with environmentally-friendly alternatives, which consist of either Euro 4-compliant vehicles or EVs. Based on existing reports, at least 10% of public utility jeepneys is targeted to be replaced by EVs under the PUV Modernisation Program.6

To illustrate, EV manufacturers and assemblers can avail of incentives available to typical motor vehicle enterprises. An example is the Comprehensive Motor Vehicle Development Program ("CMVDP") of the BOI.

Participants of the CMVDP are entitled to avail lower tariff rates for knocked-down ("KD") parts and components for assembly, subject to the issuances of Certificates of Authority to import by the BOI. The production and/or assembly covered under the MVDP shall be in KD condition only.

Further, only brand-new Original Equipment Manufacturer ("OEM") of KD parts and components for assembly purposes shall be eligible for importation under the CMVDP subject to such limitations as may be imposed by the BOI, in addition to the compliance with certain conditions. One of such condition is that the new participant shall, within one year from date of registration with the CMVDP, invest in the manufacture and/or assembly of motor vehicles and its parts and components at least USD10 million for passenger car assembly; USD8 million for commercial vehicle assembly (e.g., buses); or USD2 million for motorcycle assembly.

There are also tax and tariff laws and policies particularly applicable to the EV industry. Under the recent Tax Reform for Acceleration and Inclusion Law ("TRAIN Law"), purely electric vehicles are exempt from the excise tax on automobiles. Hybrid vehicles,7 on the other hand, are subject to 50% of the applicable excise tax rates on automobiles. In line with the government's thrust towards efficient use of fuel in the transport sector, Executive Order No. 488, series of 2006, grants zero tariffs on importation by participants in the commercial development program of components, parts, and accessories for the assembly of hybrid (electric and gasoline/diesel), electric, flex-fuel (bio-ethanol and bio-diesel) and Compressed Natural Gas ("CNG") vehicles.

The establishment of charging or refueling stations for alternative energy vehicles,8 except LPG-run vehicles, is among the preferred activities listed in the 2020-2023 Investment Priority Plan ("IPP"). The charging stations could refer to a "service station" designed to simultaneously fast charge

PHILIPPINES

multiple vehicles similar to gasoline/diesel stations or a network of at least five charging stands. Business enterprises engaged in such activity may register with the BOI to avail of fiscal and non-fiscal incentives. Subject to certain conditions, incentives that may be enjoyed include the following: Income Tax Holiday ("ITH") for four to six years, which may be

extended up to eight years maximum; zero percent duty on importation of capital equipment, spare

parts, and supplies; exemption from wharfage dues, export tax, duty, impost and

fees; and employment of foreign nationals.

entitled to continue enjoying ITH (if currently availing ITH) for the remaining ITH period. On the other hand, enterprises currently availing of the 5% gross income tax shall be allowed to continue availing the incentive for 10 years.

In addition, another regulatory development applicable to the EV industry is the adoption by the Philippines, through the Bureau of Philippine Standards of the DTI, of the following International Organisation for Standardisation ("ISO") and International Electrotechnical Commission ("IEC") standards on EVs as Philippine National Standards ("PNS"):9

The DOE may certify and endorse to the DTI-BOI any person/ entity that intends to engage in any activity related to the development, establishment, and operation of EV charging stations in the Philippines for the availment of fiscal incentives.

PNS IEC 61851-1:2019 Electric vehicle conductive charging system Part 1: General requirements

The IPP is renewed every three years. It is good to note that for the past years, the establishment of charging or refueling stations for alternative energy vehicles has consistently been recognised as a preferred area of investment.

Note, however, that the recently enacted Corporate Recovery and Tax Incentives for Enterprises ("CREATE") Act, the second installment of the tax reform program of the government, rationalised incentives provided for by investment promotion agencies ("IPA") under existing laws. To qualify for incentives under the CREATE Act, an enterprise must be engaged in a project or activity included in the Strategic Investment Priority Plan ("SIPP"). Similar to the IPP, the SIPP will be formulated by the BOI in coordination with other government agencies and will be approved by the President of the Philippines. The SIPP will be valid for three years, subject to review and amendment every three years thereafter. It is thus expected that the 2020 IPP will be replaced by the SIPP soon.

Incentives under the CREATE Act include ITH of four to seven years, special corporate income tax of 5% of gross income in lieu of all national and local taxes, enhanced deductions, duty exemption on importation of capital equipment, raw materials, spare parts, or accessories, and value added tax ("VAT") exemption on importation and VAT zero-rating on local purchases. Registered business enterprises with incentives granted prior to the effectivity of the CREATE Act shall be

PNS IEC/TS 62840-1:2019 Electric vehicle battery swap system Part 1: General and guidance PNS IEC 62840-2:2019 Electric vehicle battery swap system Part 2: Safety requirements

PNS ISO/TR 13062:2019 Electric mopeds and motorcycles Terminology and classification

PNS ISO 13063:2019 Electrically propelled mopeds and motorcycles Safety specifications

PNS ISO 13064-1:2019 Battery-electric mopeds and motorcycles Performance Part 1: Reference energy consumption and range PNS ISO 13064-2:2019 Battery-electric mopeds and motorcycles Performance Part 2: Road operating characteristics

These standards provide for mandatory safety requirements and technical specifications governing the EV industry.

41 PHILIPPINES

LICENSING AND ACCREDITATION OF EV COMPANIES

Once the local entity is established, an investor that engages in the manufacture, assembly, importation, rebuilding or dealing of motor vehicles (including EVs) or its components shall apply for accreditation with the LTO.10

EV considerations by potential investors

As various stakeholders project the Philippines to become an EV hub in the coming years, it would not come as a surprise if many foreign investors and firms start rushing in and take part in the Philippine EV industry. Prior to investing in and engaging in the Philippines' EV market, a potential EV investor should take into account the regulatory framework, including licensing and permit requirements, relevant to the Philippine EV industry.

Briefly, to do business in the Philippines, an EV investor should look into the several business vehicles that may be available depending on the business model and activities proposed to be conducted in the Philippines. A foreign investor may consider establishing representative offices, branch offices and subsidiaries or domestic corporations. In addition to the submission of documentary requirements, such as Articles of Incorporation, By-Laws and if applicable, special permits or endorsements from various government agencies, the incorporation of an entity necessitates compliance with capitalisation and nationality restrictions depending on the activities that the corporation desires to engage in.

With respect to capitalisation requirements, generally, the Foreign Investments Act requires a paid-in capital of more than USD 200,000 for a local entity to be foreign-owned. Otherwise, the foreign equity is limited to up to 40%. Special capitalisation and nationality requirements may be applicable if an entity will engage in the retail trading of EVs, thus, a foreign investor should study and be familiar with Philippine laws and regulations before setting up a company in the Philippines.

The purpose of this accreditation is to give the entities the right to transact business with the LTO in order to comply with the various requirements of the agency, including the filing of stock reporting for the purpose of certifying that each motor vehicle or its component has already been reported to the LTO, sales reporting and registration of motor vehicles and its components.

The accreditation is important as LTO only facilitates transactions or requests made by accredited entities. The accreditation certificate issued to an entity is valid for one year, effective on the date of approval, and renewable every year.

CLASSIFICATION AND REGISTRATION OF EVS

In 2021, the LTO issued Administrative Order No. 2021-039, or the Consolidated Guidelines in the Classification, Registration and Operation of All Types of Electric Motor Vehicles ("LTO Guidelines"). Prior to the issuance of the LTO Guidelines, the existing LTO issuances only dealt with light EVs, low speed vehicles and e-trikes. The LTO has recognised that EV technology has advanced in such a level and speed that many other types of EVs are being manufactured, designed and made, which necessitates the establishment of new EV classifications.

Under the LTO Guidelines, EVs are defined as motor vehicles powered by electric motors with power storage charge directly from external sources. The LTO Guidelines explicitly excludes hybrid vehicles from the definition of EVs.

There are four general classifications of EVs under the LTO Guidelines.

Personal Electric Mobility Scooter and Electric Kick Scooter

A two, three or four-wheeled vehicle, with or without operable pedals, powered by electrical energy with less than 300 wattage capable of propelling the unit up to a maximum speed of 12.5 km/hr.

Classification

Category L

Category M

Motor vehicles with less than four wheels and including four-wheeled vehicles with restrictions on maximum speed, maximum mass and maximum rated power. There are seven sub-classifications under Category L, including e-trikes classified under Categories L4 and L5.

At least four-wheeled EVs solely powered by electric energy and designed to carry heavier passenger loads than electric quadricycles under Categories L6 and L7. Category M is further classified into M1, M2 and M3.

Most models of electric sports utility vehicles and vans fall under Category M1, public utility electric jeepneys are classified under Category M2, and electric buses are under Category M3.

Category N

At least four-wheeled EVs solely powered by electric energy and designed to carry heavier goods. This category is further classified into N1, N2 and N3. Trucks and cargo vans are typical examples of Category N EVs.

Description

PHILIPPINES

Operation

Operation shall be limited within private roads (for electric mobility scooter) and barangay roads only (for electric kick scooter), and driver's license and registration of the EV are not required for its use.

Most EVs falling in this category are operated on private and barangay roads but may be allowed to go beyond such roads to cover other local and national roads for purposes of crossing and only if authorised by the concerned local government unit.

Valid driver's license is required for most of the EVs in this category.

Existing rules and regulations governing the operation of Category M vehicles with diesel/gas fuel type shall be adopted for their EV counterpart.

Existing rules and regulations governing the operation of Category N vehicles with diesel/gas fuel type shall be adopted for their EV counterpart.

Under this category, only electric motorcycles (Category L3), e-trikes (Categories L4 and L5) and electric quadricycles (Categories L6 and L7) may be used for public transport subject to existing laws and regulations.

For EVs that require registration prior to their use and operation, the existing policies, rules and regulations on the registration of their diesel/fuel counterparts shall be observed, except EVs are not required to undergo emission testing. To encourage compliance with the registration requirements, special lanes are to be established for the registration of EVs.

REGULATIONS APPLICABLE TO CHARGING STATIONS

The table that follows provides an overview of the various regulations applicable to one very important component of the EV industry: charging stations.

ACTIVITY

NATURE OF REGULATORY REQUISITE / MANDATE

Establishment and operation of EV charging stations, battery swapping and other similar activities

Notification to the DOE prior to engagement in any operation and establishment of charging stations, or before the construction thereof.11

Conduct of any activity relative to EV charging stations

Compliance with EV Charging Stations Policy Guidelines12 and the following codes: Building Code of the Philippines for restrictions and minimum standards depending on the power

to be provided and made available to EV users

Philippine Electrical Code for restrictions and minimum standards

DOE Department Circular No. DC 2020-12-0026 which provides for the guidelines on energy conserving design of buildings

Philippine National Standards

Importation of EV components

Import documentation and permit shall be secured with the Bureau of Customs.

The EV Charging Stations Policy Guidelines are the latest in the Philippine government's exercise of its regulatory powers. In addition to the mandatory notice prior to engagement in any EV charging station activity, the guidelines also contain the following pertinent provisions: compliance with the relevant laws covering safety, accessibility, operability, and sustainability and integrity standards with

respect to the location and installation of EVCS and its electrical-related components; all public and private charging stations may be allowed to impose and collect reasonable charging fees; labeling and marking requirements such as rated voltage, rated current, identification of the EV charging station as DC/AC output,

protection grade, charging interface, among others; and private and public buildings and establishments including retail outlets may designate dedicated parking slots that will be

installed with EV charging stations.

43 PHILIPPINES

New EV policies are in the pipeline

There are a number of Bills13 pending before the Philippine Congress dealing with the subject of EVs and charging stations. The Bills seek to encourage the use of EVs and hybrid vehicles by providing incentives to manufacturers/importers and end-users. While existing Philippine laws provide for preferential tax rates only, the Bills propose for tax exemptions and other non-fiscal activities. The following proposals are common among the Bills:

Mandating industrial and commercial companies, public transport operators, and government agencies to allocate at least five percent of their fleet for EVs within a certain timeframe

Exemption from excise tax on the manufacture or assembly of completely knocked-down ("CKD") parts of plug-in hybrid EVs as well as on the importation completely built units of the same

Requiring the designation of dedicating parking slots for the exclusive use of EVs in private and public buildings and establishments and the installation of charging stations

VAT exemption on the purchase and importation of EVs, its spare parts, and components, and of charging equipment

Requiring gasoline stations to designate dedicated spaces for the installation of charging stations

30% from the payment of the motor vehicle user's charge imposed by the Land Transportation Office

Mandating the establishment of green routes (i.e., public transportation routes to be exclusively traversed by public utility EVs) in local government units

Mandating the inclusion of manufacture and assembly of EVs, charging stations, parts and components, and the establishment and operations of charging stations in the annual IPP for a minimum of ten years

Non-fiscal incentives such as expeditious registration and issuance of a special type of vehicle plate, exemption form the number-coding scheme, expeditious processing of application for franchise/ permits to operate for public utility EVs

Encouraging financial institutions to provide concessional financial packages such as preferential interest rates and payment scheme for the acquisition of EVs and electric charging stations

Providing for exemption from payment of excise taxes, duties, and VAT on the importation of completely built units of EVs and charging stations

To give teeth to the mandatory provisions, the Bills provide penalties consisting of fines for violations of the law.

Conclusion

There is potential in the EV industry in the Philippines, even more so, that there is a growing advocacy for more sustainable alternatives to everyday items, and the call for solutions to the climate crisis is at its peak. The adoption and commercialisation of EVs should be encouraged if the country will reduce its dependence on petroleum and traditional gas consumption, and continue its commitment to a cleaner environment.

There are, without a doubt, prevailing challenges and roadblocks to the growth of the EV industry and the increasing of EV investors entering the Philippine market. However, the gradually changing EV landscape in the Philippines provides investors wide room to work and negotiate with regulators in creating and putting in place new policies to better promote a sustainable and energy independent economy. This creates an opportunity for all stakeholders involved to shape the industry and, more importantly, to shape a future where the environment and sustainability are at the forefront.

PHILIPPINES

SINGAPORE

ACHIEVING SINGAPORE'S ELECTRIC DREAM

Introduction

Singapore has been exploring the adoption of electric vehicles ("EVs") for more than a decade now. In 2009, an EV task force was put together by the Energy Market Authority and the Land Transport Authority ("LTA") to assess the feasibility of EVs in Singapore. Fast forward to February 2021, the Singapore Government unveiled the Singapore Green Plan 2030 (the "Green Plan").

The Green Plan is a nation-wide movement to advance Singapore's sustainable development agenda.

Under the Green Plan, Singapore intends to require all new car and taxi registrations to be of cleaner-energy models from 2030. By 2040, Singapore

plans to require all vehicles to run on cleaner energy.

Improving charging infrastructure

As at 31 December 2021, EVs represent only about 0.4% of the total motor vehicle population in Singapore. To facilitate the adoption of EVs, Singapore has set a goal to improve EV charging infrastructure across the country.

Singapore also plans to have eight EVready towns where every public carpark in these towns will be fitted with charging points by 2025. The ultimate aim is to make every HDB town (public housing estate in Singapore) an EV-ready town by 2030s. For non-landed private residences such as condominiums, the Government introduced an EV Common Charger Grant to kickstart the installation of shared EV charging infrastructure in these premises. The grant, part of a SGD30 million dedicated budget, is available to the first 2,000 chargers installed from July 2021.

Besides measures by the Government, private sector players, such as BlueSG and Charge+, have also been ramping

up their investments in and deployment of charging points. The LTA plans to support commercial players by setting up regulatory sandboxes for them to design and introduce innovative and unique EV charging solutions. There is also a movement towards providing financing to support the industry, with one financial institution offering loans to vehicle rental companies to build charging stations. Some financial institutions are also expanding financing progressively to cover private condominiums and commercial buildings. With stronger support from the Government and greater financial resources, opportunities for business development in the charging infrastructure sector will emerge and help accelerate the adoption of EVs.

45 SINGAPORE

Encouraging the use of EVs

Industry developments

In addition to improving charging infrastructure, the Government is also offering financial incentives to encourage people to switch to EVs. The new Electric Vehicle Early Adoption Initiative entitles new or secondhand electric car or electric taxi registered between 1 January 2021 and 31 December 2023 to a 45% rebate of the additional registration fee payable or SGD 20,000, whichever is lower. From 1 January 2021 to 31 December 2022, the rebates for less pollutive vehicles in Bands A1 and A2 have been increased by SGD5,000 for cars and SGD7,500 for taxis under the Vehicular Emissions Scheme. Coupled with the Electric Vehicle Early Adoption Initiative, consumers are able to enjoy combined cost savings of up to SGD45,000 when they buy an electric car, and up to SGD57,500 for an electric taxi. Further, from January 2021, the road tax for EVs will be revised downwards.

Many other modes of transportation such as taxis and public buses have taken the lead to switch to EVs. SMRT, a major transport operator in Singapore, has pledged to replace its entire taxi fleet to EVs within five years. Taxi companies such as HDT Singapore Taxi have rolled out electric taxis. LTA is committed to having a 100% cleaner energy bus fleet by 2040. In line with this vision, LTA bought 60 electric buses, which have been fully deployed by August 2021.

Hyundai unveiled plans to set up an EV manufacturing plant in the Jurong Innovation District, which is slated to be operational by 2022. The investment is worth almost SGD400 million and the facility is expected to produce up to 30,000 vehicles every year by 2025 for local consumption and export.

An increasing number of financial institutions have also heeded the Government's call to facilitate the adoption of EVs by offering low interest rates on EV-rental car loan and EV-car purchase loan. It is anticipated that the higher rebates and affordable loans will make financing of EVs more easily accessible and push EV adoption by narrowing the upfront cost gap between EVs and their less environmentally friendly equivalents.

Conclusion

The Green Plan sends a clear signal from the Singapore Government that EV adoption is a question of when, not if. One of the biggest challenges in the past few years is to grow the number of EV charging stations, such that private car owners can experience the same level of convenience as refueling at a petrol kiosk.

As some of the financial incentives under the Green Plan are slated to expire within a couple of years, it is critical that charging infrastructure is ramped up quickly ahead of demand so that consumers can enjoy even lower switching cost. In the past few years, almost all forms of public transportation such as buses and taxis have been moving towards some form of electrification, whether hybrid or fully electric. As EV charging stations are gradually rolled out in more residential estates, it will not be long before more Singapore private car owners make the switch to EVs.

SINGAPORE

THAILAND

THAILAND TO BECOME THE NEW EV HUB

Since the pandemic outbreak started in early 2020, a number of economic sectors have been hit hard by the severe global economic recession and the automotive industry is one of the industries, which has experienced an unprecedented drop affected by the pandemic. Despite the drops in general automotive sales, it turned out that the electric vehicles ("EV") market has been keeping up surprisingly well with the EV global sales rising by 43%.

The booming EV market is more apparent in Europe and China as in 2020, approximately 1.3 million EVs were sold in both leading EV territories. Resulting from the growth of the sale rate in the EV market, many leading automakers and industrial countries intend to become the leading EV sellers. Toyota Motor, one of the largest automakers from Japan, has recently proposed to increase global EV sales of 5.5 million EVs annually by the next five years, for example.

In response to the radical changes underway in the global automotive industry, the Thai government has rolled out

a roadmap aiming to make Thailand become an EV hub in Southeast Asia. With the EV master plan, the government is expecting an increase in EV production to 30% of automotive production by 2030. The government has also announced a bold plan to move to only sell zero-emission EVs by 2035 as it aims to become the EV regional production hub.

To embrace the goals of the EV roadmap, the government is also working on the electricity sector by expanding the EV charging station with the support from Metropolitan Electricity Authority (MEA) and Provincial Electricity Authority (PEA).

Furthermore, the government offers significant support in the form of tax and non -tax incentives to attract any Thai or Foreign investor to invest in EV country through the Thailand Board of Investment ("BOI"). BOI has recently approved new promotion packages, which will replace the first EV package that expired in 2018, to expedite the production of EV, EV parts, or EV-related equipment by offering qualified investors various incentives covering all major aspects of the EV supply chain.

47 THAILAND

Incentive promotion schemes for different types of EVs

These types of EVs were re-promoted by the BOI since it was expired in 2018. The criteria

for applicant investors set by the BOI includes, the EVs for sale must meet the standards, the

Manufacturing of Battery Electric Vehicle

applicant investor must have a scheme to manufacture at least one material component of the EV and an investment package that includes at least a BEV manufacture scheme (by the applicant investors only), electric battery manufacture scheme (either by the applicant investors

1 ("BEV"), Plug-In Hybrid Electric Vehicle

or other manufacturer), and the training on technology and technical support scheme for local suppliers, etc. In the case of BEV Platforms, there must be an energy storage system, a charging

("PHEV"), Hybrid

module, and a front & rear axle module, with the product standards requirement not associated

Electric Vehicle ("HEV") with platform production exempted.

and BEV Platform

In regard to the BEV and BEV Platform, the promoted investor will be eligible to receive more

incentives from the BOI in the case that the investment package amount of BEV is more than THB

5 billion.

These types of promotions are newly promoted by the BOI. The applicant investors also have

to meet the criteria set by the BOI, similar to the first item, e.g. the Battery Electric Motorcycles

Manufacturing of

and Tri-cycles that for sale must meet the standards set by BOI and have an investment

2 Battery Electric Motorcycles, Tricycles,

package which includes the Battery Electric Motorcycles and Tricycles manufacture scheme, electric battery manufacture scheme, and the training on technology and technical support

and Tricycle Platform

scheme for local suppliers, etc. The BOI also extends the package to cover the production of

Battery Electric Tricycle Platforms where the requirements are the same as described in the

first item.

3 Manufacturing of Battery Electric Bus, Truck and Platform

Similar to both items above, the applicant investors also have to meet the criteria set forth by the BOI and have an investment package

The promotion of electric bicycles or E-Bikes is BOI's latest policy. The investment package for

this type of promotion requires a scheme for manufacturing electric bicycles, a scheme for

4 Manufacturing of Electric Bicycle (E-Bike)

manufacturing electric batteries (either by the applicant investors or other manufacturers), and a scheme for managing used batteries. In addition, the frame of an electric bicycle must be

constructed of lightweight materials, such as chrome-moly, titanium alloy and carbon fiber, etc.,

and the batteries used in an electric bicycle must be made with eco-friendly technology.

5 Manufacturing of Component and Equipment of EV

The number of approved projects has shown that the challenges to Thailand to become the EV regional production hub - concerns among the individual buyers over the small number of charging stations or high battery prices - are gradually being resolved. This allows the government to continue to build trust among individual buyers towards using EVs.

Therefore, with the right government policy implementation and incentivisation, Thailand's goal to become Southeast Asia's EV hub may be possible.

Although the data has shown that EVs currently makes up less than 1% of cars in Thailand, the Thai EV market has shown great resilience considering the pandemic overall automotive sales have faced and, according to the strong policy support.

THAILAND

Therefore, with the right government policy implementation and incentivisation, Thailand's goal to become Southeast Asia's EV hub may be possible.

VIETNAM

IS VIETNAM READY FOR EV BREAKTHROUGH? GENERAL BACKGROUND OF ELECTRIC VEHICLE ("EV") DEVELOPMENT IN VIETNAM

Overview

In recent years, the global trend is moving towards mass adoption of EVs. Such trend is mainly driven by the worldwide effort to reduce carbon emission and work towards zero emission altogether. EVs have seen fastpaced development and expansion in a number of densely populated cities around the world (e.g. Bangkok and Beijing). However, it still lacks popularity among Vietnamese people despite the rapid increase in domestic demand for automobiles with the country's fastgrowing middle class.

The automobile demand in Vietnam is projected to reach a staggering amount of 800,000 units per annum by 2025 and 1,000,000 million units per annum by 2030,1 demonstrating a huge potential in the Vietnam automobile industry for clean-fueled vehicles. According to the 2020 report by the Vietnam Automobile Manufacturers Association ("VAMA"), despite the COVID-19 pandemic, the automobile consumption has continued to gather momentum by achieving 407,487 units for all types of vehicles in 2020, exceeding 401,809 units in 2019. As the pandemic continues, recent statistic from VAMA remains optimistic

with 40,072 automobiles sold in March 2021, which is a boost of 127% over the previous month.

The huge potential in the Vietnam automobile market comes with a painful and irreversible price to the environment. Since many vehicles in Vietnam are still powered by fossil fuel (running on gasoline or diesel),

the high volume of emissions from the increasing number of automobiles, especially on the roads of major crowded cities like Hanoi and Ho Chi Minh City, would only continue to worsen the already heavy air pollution problem in Vietnam. Vietnam is ranked as the 21st most polluted country across the globe in 2020 based on the data collected by the air quality monitoring firm, IQAir.

Therefore, the ideal solution would be to strike the right balance between being able to meet the country's growing automobile demand with the satisfying the public sentiment of minimising harmful emissions and pollutions to the environment for a sustainable future. At the current climate, Vietnam is unfortunately still far from finding such balance. As such, the mass adoption of affordable EVs in Vietnam may just be the green, cleaner and renewable solution to both pollution and traffic congestion issues.

49 VIETNAM

VIETNAM'S

ADVANTAGES IN THE EV SPACE

It was not until VinFast Trading and Production Limited Liability Company's ("VinFast") successful launch of three lines of smart electric SUVs on 22 January 2021 that the Vietnamese people (especially the growing middle class) became more environmentally cautious of the adverse consequences of air pollution. This has led to growing interest in an affordable, environmentally aware vehicle to curb deterioration to the environment caused by its conventional competitor.

On 24 March 2021, VinFast officially announced that it would receive orders for the first model, named VF e34, priced at VND690 million with many attractive promotions for those ordering prior to 31 June 2021. Within 12 hours of the opening for preorders, 3,692 orders poured in, a record breaking first in the Vietnam market. The enthusiastic reception is strong evidence of the

gradual shift towards using an electrified transportation which benefits the environment. VinFast is undoubtedly a pioneer in initiating and facilitating such shift in Vietnam.

Another advantage in the evolvement of EV in Vietnam is that the industry is still a fledgling industry as compared to others. As such, it can potentially attract a great number of foreign investments into Vietnam which can open up more business opportunities in a vibrant and densely populated market dominated by the middle class with steady incomes.

In addition, given that EV is an industry of the future and its positive impacts on both socio-economic and environmental aspects, it is anticipated that legislators will have to eventually enact a transparent legal framework and propose incentives to promote its usage in the domestic automobile market.

The significant issue affecting the public's interest in EV use is the short travel distance per charge and long charging time, both of which are inherent disadvantages arising from the current battery technology.

With each full charge (which typically takes around 8 to 10 hours charge time in the case of a dead battery), the distance that an EV could travel is much less than the distance that a normal vehicle could. In order to minimise such inconvenience, a network of public charging stations and battery exchange along the roads is required. However, the charging infrastructure in Vietnam is relatively poor and at present, limited. Development of such infrastructure may open up further concerns on whether the power grid system supplying electricity to those charging stations is sufficient to meet EV needs.

Therefore, for EVs to start gaining a foothold in the Vietnam market and attain its full potential in the mitigation of carbon emission, critical progress is required to decarbonise electricity generation, develop its charging infrastructure, integrate EVs in power systems and advance on sustainable battery manufacturing and its recycling.

Even with proper infrastructure deployed for EVs, strong ambition and action from the Government in influencing the infrastructure and pricing of EVs are pivotal to enable mass adoption of EVs in the country.

The lack of (a) a transparent and specific regulatory framework; and (b) supportive incentives and policies (especially those aimed at cutting taxes, fees and charges for supply and user levels), which are tailored to reduce air pollution, encourage transition to EVs and management of the standard of EVs are considered as critical barriers that Vietnam has to overcome. Meanwhile, some other countries in the Southeast Asia region such as Thailand and Indonesia are pulling ahead with attractive policies for different types of electrified vehicles or according to the carbon dioxide emission.

VIETNAM'S

DISADVANTAGES IN THE EV SPACE

In a country where two-wheeled vehicles dominate the roads, competition with such conventional means of transport is also challenging to the Vietnam EV industry. In relation to foreign investment, offshore manufacturers may be reluctant to invest in or enter into the Vietnam EV market as it is difficult to compete with VinFast, a wholly Vietnamese owned automobile manufacturer with strong local support and influence in the Vietnam automobile industry.

VIETNAM

understanding on strategic cooperation with Production LLC and ProLogium Technology Co., Ltd., a world leader in the commercialisation of solid-state battery technology based in Taiwan, to manufacture solid-state batteries for its electric cars in Vietnam. This strategic step will improve the quality of VinFast electric automobiles in terms of longer travel distances, significant reduction in charging time and increase in the frequency that EVs can be charged.

Vietnamese legal framework and policy for EVs

In the absence of specific laws and regulations on EVs, the general legal framework for automobiles is also applicable to EVs.

Policies and mandates to promote demand and encourage EV consumption (e.g. by curtailing cumbersome taxes, fees and charges from tax authorities and traffic authorities and mandating the usage of EV) have not been properly introduced (especially those to be implemented on a long-term basis), and generally lacked synchronisation. For instance, under Decree No. 70/2020/ ND-CP dated 28 June 2020 issued by the Government of Vietnam ("Decree 70"), automobiles manufactured or assembled by local companies, including EVs, enjoyed a 50% reduction on the registration fee up to 31 December 2020. However, upon its expiry, the Ministry of Finance has not introduced any extension. The Thai Embassy, Indonesian Embassy and the European Chamber of Commerce (EuroCham) have expressed their concerns that such reduction manifests discriminatory treatment against imported cars.

On 18 January 2021, the Prime Minister promulgated Directive No. 03/CT-TTg requesting the Ministries and provinciallevel People's Committees to boost the implementation of policies and programs regarding air quality management in an effort to combat environment harm and

minimise adverse impacts upon people's health ("Directive 03"). The Ministry of Transport is responsible for formulating national programs and projects on development of an environmentalfriendly public transport system and EVs to be submitted to the Prime Minister whilst the Ministry of Industry and Trade is tasked with proposing policies on exploitation, processing and import of raw materials (e.g. lithium, cobalt, etc.) for production of batteries for EVs. It is expected that the opportune directions from the Prime Minister as well as upcoming policies of the relevant ministries will lay the groundwork for a breakthrough of Vietnam EV industry.

Future of EV in Vietnam

The Vietnam EV industry has promising potential to thrive in the next decade due to its population of about 100 million, including a large number of young people who are passionate about and eager to experience new technologies. Hence, overcoming challenges of EV uptake to make the most out of the market's potential should be classified as top priority for Vietnam.

To successfully commercialise EVs in Vietnam, it is necessary to enhance energy storage capacity, which is currently the weakest link of EV to enable longer travel distance after each charge as well as shorter charging time. On March 2021, VinFast announced that it has signed a memorandum of

In parallel, more and more public charging stations would need to be set up extensively not only in residential facilities such as parking lots, convenience stores, basements of apartment buildings, schools and filling stations but also along main roads of the country, especially national highways, inter-provincial roads and avenues. Automobile manufacturers are well aware of such shortage of charging stations and are rapidly developing the local infrastructure. Recently, VinFast has been actively calling on individuals and enterprises with suitable premise to cooperate with it to install and operate EV charging stations. Resolving major EV issues of low capacity and poor infrastructure can help ease people's doubts or hesitations on the use of EVs.

In relation to regulations, experts have pointed out that the Government should have a deep awareness of an inevitable trend towards using electric automobiles and have also urged for prompt proposals and implementation of comprehensive regulations and supportive incentives for electrified vehicles before it is too late. Directive 03 has been a recent landmark development for EVs in Vietnam with hope that it will pave the way for the introduction of a more detailed legal framework in the near future to bring the Vietnam EV industry to greater heights.

51 VIETNAM

In a recent interview, the vice chairman of the National Traffic Safety Committee has shared that the Government needs to create a comprehensive program which includes a system of incentives and supportive solutions for both users and manufacturers.

For automobile users, the Government should consider proposing incentives at

Of course, such incentives and policies must be curated to run for a long haul. On this note, there is a private initiative by Vingroup aiming to encourage improvement of the living environment towards a sustainable future, called the Green Future Fund which will instantly donate VND30 million to its customers who switch from fossil fueled vehicles to EVs. Apart from the above suggested incentives, the Government needs to have a diversified and adaptive portfolio of regulatory and fiscal measures including (a) providing support for relevant ancillary industries to EV namely production and import of battery or other components to shorten the technology development time; and (b) setting clear and long term vision and goals for the industry through regulatory policies and mandates impelling automobile manufacturers to sell a higher number or share of electrified or otherwise more efficient vehicles.

Vietnam is already a step behind on supporting EV adoption, but it can learn from and adopt successful experiences from other countries in developing its EV industry.

For automobile manufacturers, introducing policies to encourage

THAILAND

A neighbouring country of Vietnam with a thriving EV industry in Southeast Asia, has issued new incentives to boost EV production and the supply chain such as a three-year tax exemption for plugin hybrid vehicle manufacturers and eight-year corporate income tax exemption for battery manufacturers.

CHINA

Subsidised from RMB20,000 to RMB40,000 depending on the type of EV and invested in a nationwide ready-made electricity supply infrastructure network. In addition, each locality in China has its own incentives, for example, fee for licence plate issuance applicable to electric automobiles is complimentary in the city of Shanghai.

KOREA

Provides a one-time subsidy of KRW14 million and cuts down taxes, insurance fees, highway use fees and parking fees for EV users.

GERMANY

EV purchasers will get a direct subsidy of between EUR3,000 and EUR5,000 and enjoy a reduction of value-added tax or exemption from tolls within three, five or 10 years whilst the EV itself is exempted from annual sales tax.

In order to achieve a breakthrough in the EV industry, Vietnam needs to utilise the inherent advantages of its market and EVs as well as take initiative to overcome difficulties from multiple perspectives as highlighted and analysed above.

VIETNAM

Green mobility is one of the four policy goals to achieve sustainable mobility, according to Sustainability Mobility for All (SuM4All), a premier advocacy platform hosted by the World Bank for international cooperation on transport and mobility issues.

UNIVERSAL ACCESS

Connect all people and communities to economic and social opportunities.

EFFICIENCY

Optimise the predictability, reliability and cost

effectiveness of mobility.

GREEN

Minimise the environment footprint of mobility (GHG emissions, noise and air pollution).

SAFETY

Drastically reduce fatalities, injuries and crashes.

Source: Global Roadmap of Action Toward Sustainable Mobility (2019)1

MOVING TOWARDS GREEN MOBILITY

Increase the use of electric vehicles ("EVs")

Who Can Participate & Contribute? INDIVIDUALS Where possible, purchase and use EVs. COMPANIES Adopt and prioritise the purchase of EVs over hybrid and internal combustion engine (ICE) vehicles as company cars. GOVERNMENT Develop policies, including the provision of incentives to promote the use of EVs2. Develop a comprehensive and adequate network of charging infrastructure and provide incentives to promote private

investment in charging infrastructure. Adopt EVs in government, state-owned enterprise and government-linked companies' fleets. Develop policy to promote recycling of batteries for EVs to ensure sustainability.

What Have Others Done?

Norway Incentives for EV

The Norwegian government provides generous incentives for EVs: zero import, VAT, and road tax; toll-free travel for plug-in cars; publicly financed charging stations, etc.

As a result, Norway has the highest per capita number of all-electric (battery only) cars in the world, with EVs representing 47% of the nation's newly registered passenger cars in June 2018.3

California Zero Emission Vehicle (ZEVs) Programme

California's Zero Emission Vehicle (ZEVs) Programme requires automakers to produce and offer for sale a number of ZEVs (i.e. full battery-electric and hydrogen fuel cell) and plug-in hybrid-electric vehicles each year, based on the total number of cars sold in California by the automakers. Requirements are in terms of percent credits, ranging from 4.5% in 2018 to 22% by 2025 where each vehicle will receive credits based on its electric driving range. The more range a vehicle has, the more credit it receives. Credits not needed for compliance in any given year can be banked for future use, traded, or sold to other automakers.4

ZEV regulation will accelerate the electrification of the fleet by setting new rules that will help prepare ZEVs for a wider market of consumers and implementing ZEV credit requirements that will aggressively increase the ZEV market share beyond 2025.5

Shift to public transport as the default mode of transport with cleaner fuel

Who Can Participate & Contribute? INDIVIDUALS Whenever possible, take public transport, and use the parking facilities at the station or the first and last mile connectivity services. COMPANIES Arrange shuttle buses to send employees to and from the nearest public transport stations. Provide employees with direct allowance to take public transport. For example, providing employees with monthly Touch n Go

credits as part of travelling allowance. GOVERNMENT Develop a comprehensive network of public transport that is timely, cost effective, accessible, and reliable. Provide adequate parking spaces at public transport stations. Improve first and last mile connectivity by constructing quality sidewalks near public transport stations and providing

shuttle bus services to connect stations with nearby high-density buildings and areas (e.g. shopping mall, office building, schools, high rise residential buildings, etc.). Develop policy to encourage and accelerate the decarbonisation of the public transportation system, including the use of electric-powered or clean fuel-powered vehicles.

What Have Others Done?

Japan Development of rail network and business site certification system for green commuting

Japan promotes a modal shift toward public transportation, particularly rail, through the development of urban railroad lines as well as the high-speed rail network.

The Excellent Eco-Commuting Business Site Certification System, introduced in 2009, complements this approach by rewarding businesses that actively promote green commuting.6 Efforts led by companies include encouragement to employees, provision of information for trains and buses, review of commuting systems and introduction of commuter buses.7 There are 739 business facilities registered under the Excellent Eco-Commuting Business Site Certification System as of March 2019 which includes Yamaha Motor Co., Ltd and Hitachi Construction Machinery Tierra Co., Ltd.

Sarawak Hydrogen-powered train and bus

The Sarawak State Government launched South East Asia's first Integrated Hydrogen Production Plant and Refueling Station in Kuching and introduced Sarawak's first hydrogen fuel cell electric buses in 2019. The production plant is able to produce 130kg of hydrogen per day at a purity of 99.999% by way of water electrolysis and is capable of supporting and fully refueling up to 5 fuel cell buses and 10 fuel cell cars per day.

The hydrogen buses can travel 300km in a single refill and passengers are able to check the real-time location of the hydrogen buses through H2 Sarawak App.

Under Phase 1 of the Kuching Urban Transportation System (KUTS) project which involves the construction of two lines and 27 stations covering approximately 50km, the autonomous rail transit ("ART") rolling stock will be powered exclusively by hydrogen fuel cells.8 Once in operation, Sarawak's ART will be the first vehicle of its kind in the world to be powered by hydrogen fuel cells.9 The first and last mile connectivity for the stations will be serviced by hydrogen fuel-cell feeder buses.

To produce "green" hydrogen through water electrolysis with zero greenhouse gas emissions, the electricity used has to come from renewable sources. Sarawak Energy Berhad, the state-owned utility and Petroliam Nasional Berhad (PETRONAS) have entered into Memorandum of Understanding in November 2020 to collaborate on a joint techno-commercial evaluation of a large-scale hydrogen production facility. The evaluation covers the possibility of utilising Sarawak's renewable hydropower in the electrolysis process to produce green hydrogen and in doing this, generate Renewable Energy Certificates in support of the renewable energy market. Data sharing from this collaboration is expected to provide a measure and insights to the potential of a hydrogen supply chain in Asia.10

Shift from road-based freight to rail freight

Who Can Participate & Contribute? COMPANIES Businesses to use rail freight instead of road-based freight as part of its strategies to achieve its sustainability goals. GOVERNMENT Develop policies and provide incentives to encourage modal shift in favour of rail freight.

What Have Others Done?

Japan Financial support and certification program for company and product

Financial support is provided for the development of larger capacity railway freight cars and containers. Subsidies are also provided to help the conversion of passenger train lines for freight purposes.11

The Eco Rail Mark certification program is being implemented to reduce carbon dioxide (CO2) emissions in the distribution sector. The ecolabel recognises businesses and their products that use the rail freight transport.

To obtain the certification:12

Company

Required to use railways for more than 15% of land freight transportation covering distances more than 500km.

Product

Required to be transported using railways for more than 30% of land freight transportation covering distances more than 500km.

The ecolabel also serves to raise consumers' awareness of the need to protect the environment. It also encourages more consumers to support businesses and products that cause less CO2 emission.

Companies that have received Eco Rail Mark includes, Hitachi, Ltd., Nippon Paper Industries Co., Ltd., Nissan Chemical Corporation. Hitachi and Nippon Paper Industries have also obtained certification for their products.

Switzerland

Imposition of heavy vehicle fee Switzerland has been successful in the shift from road to rail freight. Proper funding and strategy for the development of railway infrastructure and services has been successful. The adoption of the Alpine Initiative in 1994 to protect the Alps from transit traffic, where there is a ban on the increase of the capacity of transalpine roads, provides that transalpine freight traffic must be transported by rail.13

The railways now transport 2/3 of transalpine freight, allowing the number of trucks to be kept under certain limits. Rail freight is made more competitive to road due to the introduction of the heavy-vehicle fee, which is also used to fund rail infrastructure maintenance.14 The heavy vehicle fee is levied on trucks with a total weight of more than 3.5 tonnes and has resulted in a decrease in heavy goods vehicle (HGV) traffic across the Alps (1.27 million trips in 2008 against 1.4 million in 2000).15

Electrification of port and promoting the use of cleaner fuel and electric-powered vessel

Who Can Participate & Contribute?

GOVERNMENT Work together with port authorities to provide port-based incentives and implement enhanced

schemes to encourage ships to use cleaner marine fuels or reduce air emissions while in port. Further, promote the use of electric vessels.

Develop policies and work together with the port authorities to pursue further electrification of the port to reduce emission at the port. Includes, construction of shore-side power and electrification of port cranes, cargo handling equipment and drayage trucks.

Develop policies to encourage the use of electric fishing boats including the shift of subsidy from diesel and petrol fuel to the use of electric fishing boats and provide incentives to attract private investments. Currently, fishing boats in Malaysia are mainly powered by motor engines fuelled by diesel. Under the Diesel and Petrol Subsidy Scheme for Fisherman, in 2018, 54,718 vessel owners have received fuel subsidies where the amount of subsidised diesel distributed to fishermen was 715,941,818 litres which is worth RM534,061,616.56 while subsidised petrol distributed to fishermen was 88,400,653.66 litres which is worth RM66,464,372.62.16

What Have Others Done?

China Subsidies for port electrification

Shanghai port has benefited from government subsidies covering 7080% of the costs linked to the construction of shorebased electric power supply equipment covering 26 port berths.17

Kenya

Electric fishing boat Fishermen on Lake Victoria, Africa's largest lake, have begun using some of Africa's first electric fishing boats in February 2020. A Kenya-based start-up, Asobo, is offering the lease of battery-powered engines to some of the tens of thousands of fishing boats which go out onto the water. It also undertakes repairs and charges the batteries. This is a cheaper and greener alternative for the fishermen compared to petrol engines which release harmful emissions and cause air and lake pollution.18

Singapore

Port-based incentives The Maritime and Port Authority of Singapore ("MPA") has introduced the Maritime Singapore Green Initiative since 2011. Currently there are four voluntary programmes under the initiative which are designed to recognise and provide incentives to companies that adopt clean and green shipping practices over and above the minimum required by the International Maritime Organisation ("IMO"):19

Green Ship Programme The programme reward ship owners who voluntarily adopt solutions that enable ships to exceed environmental regulatory standards mandated by IMO.

Singapore-flagged ships that adopt energy efficient ship designs exceeding current IMO's Energy Efficiency Design Index ("EEDI") requirement and/or adopt LNG as fuel or fuel with lower carbon content than LNG would be qualified to enjoy a reduction of their Initial Registration Fees and a rebate on their Annual Tonnage Tax and receive a Green Ship Certificate issued by MPA, each to the qualifying ship and company owning the ship.

Green Port Programme To encourage ocean-going vessels calling in Port of Singapore to adopt solutions to reduce the emission of pollutants. Vessels that qualify could enjoy 25% concession in port dues (throughout entire port stay or five days or less), if it: uses LNG as a marine fuel in the Port of Singapore; or exceeds current IMO's EEDI requirements.

Additional 10% concessions by tapping on services provided by LNG-fuelled harbour craft during port stay.

Green Energy and Technology Programme To encourage Singapore-based maritime companies to develop or conduct pilot trials for green technologies that can help vessels meet IMO's 203020 targets. Ocean-going vessels registered under the Singapore Registry of Ship ("SRS") and harbour crafts licensed to operate within the Port of Singapore are eligible to apply. Under the previous Green Technology Programme, eligible companies can apply for grants of up to 50% of qualifying costs to co-fund the development and adoption of green technological solutions.

Green Awareness Programme To encourage companies to pursue advanced sustainability reporting in areas of carbon reporting and internal carbon pricing. A series of workshops and training are being conducted to build up capabilities of local maritime companies in carbon accounting.

Development and use of sustainable aviation fuel with electric and hydrogen-powered aircrafts

Who Can Participate & Contribute? COMPANIES Aviation companies to deploy fuel-efficient aircraft and increase investment in the development and use of sustainable aviation fuel. GOVERNMENT Develop policies and provide incentives to encourage the adoption of hydrogen as an alternative fuel.

What Have Others Done?

United Airlines Investment in carbon capture technology, sustainable aviation fuel and electric aircraft startup

United Airlines has pledged to become 100% green by reducing its greenhouse gas (GHG) emissions by 100% by 2050. It has committed to a multimillion dollar investment in revolutionary atmospheric carbon capture technology known as Direct Air Capture rather than indirect measures like carbon offsetting in addition to continuing to invest in the development and use of sustainable aviation fuel (SAF). United Airlines became the first airline in the world to announce a commitment to invest in Direct Air Capture technology.21

In July 2021, United Airlines Ventures (UAV),22 along with Breakthrough Energy Ventures (BEV) and Mesa Airlines, made a joint investment of USD35 million in electric aircraft startup Heart Aerospace for the development of ES-19, a 19-seat electric aircraft that has the potential to fly customers up to 250 miles before the end of this decade. In addition to UAV's investment, United Airlines has conditionally agreed to purchase 100 ES-19 aircraft, once the aircraft meet United Airlines's safety, business and operating requirements. Mesa Airlines, United's key strategic partner in bringing electric aircraft into commercial service, has also agreed to add 100 ES-19 aircraft to its fleet, subject to similar requirements.23

British Airways Investment in the development of hydrogen-powered aircraft

In March 2021, British Airways together with a group of investors invested a total of USD24.3million in ZeroAvia a leading innovator in decarbonising commercial aviation in an effort to accelerate the development of 50+ seater aircraft capable of running on zero emissions hydrogen-electric power.24

According to ZeroAvia, it could achieve commercialisation for its hydrogen-electric power as early as 2024, with flights of up to 500-miles in up to 20-seater aircraft. With this new investment, ZeroAvia expects to have 50+ seat commercial aircraft in operation in five years' time and it accelerates the company's vision of powering a 100-seat single-aisle aircraft by 2030.

The airline also teamed up with ZeroAvia through its parent company International Airlines Group's (IAG) Hangar 51 accelerator programme to explore how hydrogen-powered aircraft can play a leading role in the future of sustainable flying. The project identified economic, network and consumer appeal advantages as well as clear environmental benefits.

ZeroAvia has completed the world first hydrogen fuel cell powered flight of a commercial-grade aircraft in September 2020 with the Piper M-class 6-seat plane completing taxi, takeoff, a full pattern circuit and landing at the company's R&D facility in Cranfield, England.25

Icelandair Exploring the possibilities of electric and hydrogen power to decarbonise domestic network

With the aim to decarbonise flying and exploring the possibilities of electric and hydrogen power, Icelandair has signed a letter of intent with Universal Hydrogen, a company that has designed a hydrogen conversion kit for regional aircraft and a letter of intent with Heart Aerospace, with the goal of electrifying regional air travel. Icelandair is committed to reduce its impact on the environment and become one of the world's first airlines to fully decarbonise its domestic network.26

Accelerate research and development (R&D) for low-carbon and zero-carbon solutions

Who Can Participate & Contribute? GOVERNMENT Provide government funding and increase public-private collaboration for research and development (R&D) of low-carbon and zero-carbon solutions for transportation sector including identifying sustainable alternative fuels.

What Have Others Done?

Singapore Public-private cooperation for maritime decarbonisation

In February 2021, the MPA joins five other industry partners, namely MISC Berhad, Lloyd's Register, Samsung Heavy Industries, MAN Energy Solutions and Yara International ASA, in the Castor Initiative, to support the development and trials of vessels utilising ammonia as an alternative marine fuel.27

In April 2021, MPA signed a memorandum of cooperation ("MoC") with BW Group, Sembcorp Marine, Eastern Pacific Shipping, Ocean Network Express, Foundation Det Norske Veritas and BHP to establish a fund for a maritime decarbonisation centre to be set up in Singapore. Under the MoC, each private sector partner will contribute SGD10million to support the establishment of the centre, fund maritime-decarbonisation-related research and technology development projects and collaborate with institutes of higher learning and research institutes. MPA will add SGD60million R&D funding to these contributions, bringing the fund to a total of SGD120 million.28

In August 2021, MPA and the Singapore Maritime Institute ("SMI") awarded funding to three consortiums led by Keppel FELS Limited, SeaTech Solutions and Sembcorp Marine, comprising a total of 30 enterprises and research institutions, to research, design, build and operate a fully electric harbourcraft over the next five years. While only three proposals had been selected, the joint call for proposals by MPA and SMI drew strong interest from the maritime community with 73 maritime companies and 10 institutes of higher learning and research institutes submitting a total of 16 proposals.29 These electrification pilot projects will demonstrate both commercial and technical viability of specific use cases for full electric harbourcraft and will support Singapore's broader plans to mitigate greenhouse gas (GHG) emissions by the maritime transport sector. The three selected proposals, adopting either new build or retrofit strategies, will tap on MPA's Maritime GreenFuture Fund for the research, testing and piloting of low-carbon technologies. MPA has set aside SGD9million under such fund to co-fund jointindustry projects and trials.

LAOS CAMBODIA

BRUNEI

MALAYSIA INDONESIA

Mohamad Rozaiman Abdul Rahman

Managing Partner of ZICO R.A.R (a member of ZICO Law) +673 713 2929 [email protected]

Fadjar Widjaksana Kandar

Co-Managing Partner of Roosdiono & Partners (a member of ZICO Law) +6221 2978 3888 [email protected]

Gilbert Gan

Managing Partner of Zaid Ibrahim & Co. (a member of ZICO Law) t. +603 2087 9999 [email protected]

Khoo Yu Lin

Partner of Zaid Ibrahim & Co. (a member of ZICO Law) +603 2087 9818 [email protected]

Geraldine Oh Kah Yan

Resident Partner of ZICO Law Myanmar +95 1 538 362 [email protected]

Chua Wei Min

Director of ZICO Insights Law +65 6443 4920 [email protected]

THAILAND PHILIPPINES

Matthew Rendall

Managing Partner of Soksiphana&associates (a member of ZICO Law) +855 23 999 878 [email protected]

Aristotle David

Managing Partner of ZICO Law Laos +856 21 410 033 [email protected]

Amin Abdul Majid

Partner of Zaid Ibrahim & Co. (a member of ZICO Law) +603 2087 9976 [email protected]

Hua Sia Yen

Partner of Zaid Ibrahim & Co. (a member of ZICO Law) +603 2087 9901 [email protected]

Felix Sy

Managing Partner of Insights Philippines Legal Advisors (a member of ZICO Law) +63 2 7903 1291 [email protected]

Threenuch Bunruangthaworn

Executive Partner of ZICO Law Thailand +662 6777 588 [email protected]

VIETNAM SINGAPORE MYANMAR

Tay Zi Li

Partner of ZICO Law Vietnam

+84 28 3915 1000 [email protected]

CONTRIBUTORS

CAMBODIA

Eszter Papp

Associate of Soksiphana&associates (a member of ZICO Law)

INDONESIA

Fadjar Widjaksana Kandar

Co-Managing Partner of Roosdiono & Partners (a member of ZICO Law)

Amanda Herodita Kansil

Associate of

Roosdiono & Partners (a member of ZICO Law)

Javas Mesa Briantama

Alumni of

Roosdiono & Partners (a member of ZICO Law)

MALAYSIA

Amin Abdul Majid

Partner of Zaid Ibrahim & Co. (a member of ZICO Law)

Khoo Yu Lin

Partner of Zaid Ibrahim & Co.

(a member of ZICO Law)

Hua Sia Yen

Partner of Zaid Ibrahim & Co.

(a member of ZICO Law)

Chelsea Lim Chaw Sea

Senior Associate of Zaid Ibrahim & Co.

(a member of ZICO Law)

Audrey Siew Sze Yen

Senior Associate of Zaid Ibrahim & Co.

(a member of ZICO Law)

Sonia Soon Nea

Associate of Zaid Ibrahim & Co.

(a member of ZICO Law)

PHILIPPINES

Felix Sy

Aubbrey Lim

Managing Partner of Insights Philippines Associate of Insights Philippines

Legal Advisors (a member of ZICO Law)

Margarita Louise Masangkay

Associate of Insights Philippines

Legal Advisors (a member of ZICO Law)

Reeneth B. Santos

Associate of Insights Philippines

Legal Advisors (a member of ZICO Law)

SINGAPORE

Heng Jun Meng

Alumni of ZICO Insights Law

THAILAND

Threenuch Bunruangthaworn

Executive Partner of ZICO Law Thailand

Archaree Suppakrucha

Partner of

ZICO Law Thailand

Ratthachat Kumhom

Junior Associate of

ZICO Law Thailand

VIETNAM

Tay Zi Li

Partner of ZICO Law Vietnam

LIST OF REFERENCES

INTRODUCTION

ASEAN'S LOFTY GOALS FOR ELECTRIC VEHICLES

1 Marine Gorner and Leonard Paoli, `How global electrical car sales defied Covid-19 in 2020' (IEA, 28 January 2021) .

2 Viviana Demonte, `Electric vehicles driving ASEAN sustainable growth' (EIAS, 3 February 2021) .

3 Dale Hardcastle, Raymond Tsang and Francesco Cigala, `Finding a new route to Southeast Asia's electric vehicle future' (Bain & Company, 26 June 2019) .

CAMBODIA

THE RISE OF THE ELECTRIC TUK-TUK: HOW THE RIDE-HAILING INDUSTRY IS PRESSING FORWARD THE PRODUCTION OF ELECTRIC VEHICLES IN CAMBODIA

1 Hin Pisei, `Locally-made electric auto-rickshaw on sale by end of 2021, maker says' The Phnom Penh Post (30 March 2021 .

INDONESIA

BATTERY-POWERED ELECTRIC VEHICLE: A STEP FORWARD TO GREEN MOBILITY IN INDONESIA

1 `Indonesia's Nickel Natural Resources Is The Largest In The World,

Sri Mulyani Is Optimistic That Indonesia Will Be The Main Player In

Electric Vehicle Batteries' (VOI, 16 March 2021)

ekonomi/39178/sda-nikel-indonesia-terbesar-di-dunia-sri-mulyani-

optimis-tanah-air-jadi-pemain-utama-baterai-kendaraan-listrik>.

2 `Tesla investment to position Indonesia as EV battery production hub

report' (Mining.com, February 2021)

tesla-investment-to-position-indonesia-as-ev-battery-production-

hub-report/>

2 AEER, `Nikel Baterai Kendaraan Listrik: Ketidakadilan Ekologi di

Kawasan Asal Sumber Daya' (February 2020)

content/uploads/2020/02/Nikel-Baterai-Kendaraan-Listrik.pdf>.

3 Dio Dananjaya, `Produsen CATL Siapkan Rp 70,6 Triliun untuk Pabrik

Baterai di RI' Kompas (21 December 2020)

kompas.com/read/2020/12/21/070200115/produsen-catl-siapkan-

rp-70-6-triliun-untuk-pabrik-baterai-di-ri>.

4 The Q multiplier factor refers to the electricity tariff multiplier in bulk

sales of electricity, to distinguish commercial and non-commercial

electricity consumers, determined by PLN.

5 The N multiplier factor refers to the electricity tariff multiplier factor

in special services determined by PLN.

6 Article 36 of Presidential Regulation No. 74 of 2021 concerning

Amendment of Government Regulation No. 73 of 2019 concerning

Tax Imposition for Vehicle Classified as Luxury Goods.

7 `Indonesia Is Ready To Become The World's Electric Vehicle Industry

Player' (VOI, 27 March 2021)

indonesia-is-ready-to-become-the-worlds-electric-vehicle-industry-

player>.

8 Novy Lumanauw, `Presiden Jokowi Groundbreaking Pabrik Baterai

Kendaraan Listrik di Karawang' (Investor Indonesia, 15 September

2021)

groundbreaking-pabrik-baterai-kendaraan-listrik-di-karawang>.

9 `Toyota Investasi Rp28 T di Indonesia, Janji 10 Mobil Listrik' CNN Indonesia (12 March 2021) .

10`Mitsubishi Xpander Hybrid Dipastikan Diproduksi di Indonesia' CNN Indonesia (11 March 2021) .

MALAYSIA

FUTURE OF EVS IN MALAYSIA: TOWARDS A MORE ELECTRIFIED AND SUSTAINABLE ECONOMY

1 Veronika Henze, `Battery Pack Prices Cited Below $100/kWh for the First Time in 2020, While Market Average Sits at $137/kWh' (BloombergNEF, 16 December 2020) .

2 Cheah Chor Sooi, `Malaysia a laggard in the Asean region's EV race; Thailand in forefront' (Focus Malaysia, 18 February 2021) .

3 Dr Amalina Amir, `Electric vehicles catalyst for growth of new economic industry' New Straits Times (25 February 2021) .

4 Rahimi Yunus, `Fast EV chargers along NSC by 1Q21' The Malaysian Reserve (23 October 2020) .

5 Cheryl Heng, `Singapore's electric car charging providers put expansion plans in place amid push from the government' South China Morning Post (17 February 2021 .

6 Roland Irle, `Global EV Sales for 2021 H1' (EV-Volumes.com) .

7 Andres J Hawkins, `General Motors' electric vehicle plan just got even more expensive' (The Verge, 16 June 2021) .

8 `Govt ends tax breaks for hybrids and EEVs' The Malaysia Reserve (31 March 2017) .

9 Ministry of International Trade and Industry, `National Automotive Policy 2020' (Prime Minister Office) .

10Ayisy Yusof, `Low carbon mobility blueprint to drive larger participation of EV players' New Straits Times (20 April 2021) .

11Ezra Dyer, `Mercedes-Benz is bringing an electric sprinter to the US' (Car and Driver, 8 December 2020) .

12`GM Will Boost EV and AV Investments to $35 Billion Through 2025' (GM, 16 June 2021) .

13Oxford Economics and Cisco, `Technology and the future of

ASEAN jobs: The impact of AI on workers in ASEAN's six largest

economies' (Oxford Economics, September 2018)

oxfordeconomics.com/recent-releases/dd577680-7297-4677-aa8f-

450da197e132>.

14Siti Indati Mustapa, et al, `Evaluation of Cost Competitiveness of

Electric Vehicles in Malaysia Using Life Cycle Cost Analysis Approach'

(2020) 12(13) Sustainability

1050/12/13/5303/pdf>.

15`Short-Term Electric Vehicle Subscriptions' (Borrow)

joinborrow.com/>.

16`The Smart Alternative to Buying or Leasing' (Steer)

steerev.com/>.

17Ministry of Energy, Green Technology and Water Malaysia, `Green

Technology Master Plan Malaysia 2017-2030' (Prime Minister's

Office)

Green-Technology-Master-Plan-Malaysia-2017-2030.pdf>.

18`About Us' (Comos) .

19Khalil Salah, Nazri Kama, `Unification Requirements of Electric

Vehicle Charging Infrastructure' (2016) 7(1) International

Journal of Power Electronics and Drive System (IJPEDS) 246-253

UnificationRequirementsofElectricCharging.pdf>.

20Zachary Shahan, `Technical & Design Guidelines For EV Charging

Infrastructure -- #CleanTechnica Report' (CleanTechnica, 16

February 2019)

design-guidelines-for-ev-charging-infrastructure-cleantechnica-

report/>.

21 `FAQs'

(ChargeNow)

faq/#1588229474895-32ef8fa3-5917>.

22`FAQs What cars can I charge at a chargeEV station'

chargenow.chargev.my/faq/#1588229474895-32ef8fa3-5917>.

23`Yinson JVs With MGTC To Co Establish Malaysia's Largest EV

Charging Network' (Business Today, 22 February 2022)

www.businesstoday.com.my/2022/02/22/yinson-jvs-with-mgtc-to-

co-establish-malaysias-largest-ev-charging-network/>.

24`FAQ Shell recharge with ParkEasy' (Shell)

my/motorists/shell-recharge/shell-recharge-with-parkeasy/_jcr_

content/par/toptasks.stream/1606120686407/

54395080c3a63782e43464f3c8a366600bcc96a1/faq.pdf>.

25`Porsche Asia Pacific and Shell implement high performance charging

network' (Porsche Newsroom, 6 April 2021)

porsche.com/en/2021/company/porsche-asia-pacific-shell-

cooperation-first-high-performance-charging-network-southeast-

asia-24093.html>.

26`Malaysia focusing on increasing renewable energy capacity' The

Star (22 June 2021)

news/2021/06/22/malaysia-focusing-on-increasing-renewable-

energy-capacity>.

27David Castelvecchi, `Electric cars and batteries: how will the world

produce enough' (nature, 17 August 2021)

com/articles/d41586-021-02222-1>.

28K Kathirgugan, `When will Proton make an electric car' Free Malaysia

Today (11 March 2021)

category/opinion/2021/03/11/when-will-proton-make-an-electric-

car/>.

29Siti Indati Mustapa, et al, `Evaluation of Cost Competitiveness of

Electric Vehicles in Malaysia Using Life Cycle Cost Analysis Approach'

(2020) 12(13) Sustainability

1050/12/13/5303/pdf>.

30Rahimi Yunus, `Malaysia faces EV charging network challenges' The

Malaysia Reserve (22 April 2021)

com/2021/04/22/malaysia-faces-ev-charging-network-challenges/>.

31GreenTech Malaysia, `National Electric Mobility Blueprint, Positioning

Malaysia as the `Electric Mobility Marketplace'' (Malaysian Green

Technology Corporation, 3 April 2015)

data/files/library/malaysia/RE/12.4%20page%2011.pdf>.

32`Volvo Car Malaysia plans to produce first locally-assembled EV in

Shah Alam' New Straits Times (18 March 2022)

nst.com.my/business/2022/03/781229/volvo-car-malaysia-plans-

produce-first-locally-assembled-ev-shah-alam>.

ENERGY EFFICIENT VEHICLES: PATHWAY TO LOWERING MALAYSIA'S TRANSPORTATION CARBON FOOTPRINT

1 Hannah Ritchie and Max Roser, `Emissions by sector' (Our World in Data, 2020) .

2 ASEAN Secretariat, `Sustainable Land Transport Indicators on Energy Efficiency and Greenhouse Gas Emissions Guidelines' (2019).

3 Energy Commission, `Malaysia Energy Statistics Handbook 2019' (2020) .

4 Chelsea Bruce-Lockhart, `Clothes dryer vs the car: carbon footprint misconceptions' Financial Times (17 April 2020) .

5 `Kuala Lumpur MRT Line 1 started full operation' (tunnel, July 2017) .

6 Azmi Abdul Aziz, `Malaysia's 2030 Agenda Accessible and Sustainable Public Transport' (Prasarana Malaysia Berhad).

7 Amir F. N. Abdul-Manan, Azizan Baharuddin and Lee Wei Chang, `ExPost Critical Evaluations of Energy Policies in Malaysia from 1970 to 2010: A Historical Institutionalism Perspective' (2015) 8(3) Energies 1936-1957.

8 `Malaysia targets full rollout of B20 biodiesel plan by end-2022' The Star (15 June 2021) https://www.thestar.com.my/business/ business-news/2021/06/15/malaysia-targets-full-rollout-of-b20biodiesel-plan-by-end-2022>.

9 Arjuna Chandran Shankar, `Implementation of B20 biodiesel mandate in Sabah, Peninsular Malaysia delayed again' The Edge Markets (2 June 2021) .

10Ministry of International Trade and Industry, `National Automotive Policy 2.0' (27 February 2020) .

11The Malaysian Administrative Modernisation and Management Planning Unit, `National Transport Policy 2019-2030' (MyGovernment) .

12A blend of 10% palm biodiesel with 90% diesel petroleum. 13Section 22 of the Environment Quality Act. 14Environmental Quality (Control of Emission from Petrol Engines)

Regulations 1996. 15Environmental Quality (Control of Emission from Diesel Engines)

Regulations 1996. 16Environmental Quality (Control of Emission from Motorcycles)

Regulations 2003. 17Regulataion 4 (Compliance to the properties) of the Environmental

Quality (Control of Petrol and Diesel Properties) Regulations 2007. 18Definition by the Malaysian Automotive Institute, now known as the

Malaysia Automotive Robotics and IoT Institute. 19`Biofuels & Greenhouse Gas Emissions: Myths versus Facts'

(Department of Energy) . 20Malaysia Automotive Association, `National Automotive Policy (NAP) 2014' para 23. 21Section 23C (Equipment to meet requirements) of the Electricity Supply Act 1990. 22`Chapter 6, Vehicle Performance Standards' in Hal Harvey, Designing Climate Solutions: A Policy Guide for Low Carbon Energy (Island Press 2018). 23Azalea Azuar, `Malaysia's petrol cheapest in Asia Pacific, says Picodi' . 24Hans, `Malaysia mulls CO2 emission as requirement for EEV, more hybrids to come?' (WapCar, 17 December 2020) . 25`Chapter 6, Vehicle Performance Standards' in Hal Harvey, Designing Climate Solutions: A Policy Guide for Low Carbon Energy (Island Press 2018).

26`NAP 2014: No details on Euro 4 fuel introduction roadmap, to be announced in two months' (paultan.org, 20 January 2014) .

27Hans, `Malaysia mulls CO2 emission as requirement for EEV, more hybrids to come?' (WapCar, 17 December 2020) .

28Energy Commission, `Report on Peninsular Malaysia Generation Development Plan 2020 (2021-2039)' (March 2021) p 12

29Chang-Ran Kim, `Japan to offer cash to scrap old cars, buy new ones' Reuters (9 April 2009) .

GREEN MOBILITY: AN ESSENTIAL ELEMENT OF SUSTAINABLE CITIES AND COMMUNITIES

1 `Goal 11: Make cities inclusive, safe, resilient and sustainable' (Sustainable Development Goals) .

2 Kasey Cassells, `The world's most sustainable cities' (Uswitch, 14 May 2021) .

3 Dan Jervis-Bardy, `Gas to go under ACT government's zero emissions plan' The Canberra Times (16 September 2019) .

4 `Transportation Biking' (Urban Design and Planning in Copenhagen) .

5 `Sustainability' (Urban Design and Planning in Copenhagen) .

6 `Sustainability' (Urban Design and Planning in Copenhagen) .

7 `Germany's National Sustainable Development Strategy' (The Federal Government) .

8 `Policy: Traffic and transport' (City of Amsterdam) .

PHILIPPINES

EV INDUSTRY IN THE PHILIPPINES: A BRIEF OVERVIEW

1 An Act Providing the National Energy Policy and Regulatory Framework for the Use of Electric Vehicles and the Establishment of Electric Charging Station, Senate Bill No. 1382, 18th Congress, 1st Regular Session (2020).

2 `Alternative Fuels and Energy Technology' in Department of Energy, Philippine energy Plan 2018-2020 accessed 19 May 2021.

3 Jeanne Santiago, `Market Intelligence: Philippines Electric Vehicles Market' (International Trade Administration, 22 April 2020) accessed 19 May 2021.

4 Bernie Cahiles-Magkilat, `PH eyes 21% EVs of all vehicles by 2030' Manila Bulletin (28 September 2020) accessed 19 May 2021.

5 Department of Energy, supra note 1. 6 Jeanne Santiago, `Market Intelligence: Philippines Electric Vehicles

Market' (International Trade Administration, 22 April 2020) accessed 19 May 2021.

7 A hybrid electric vehicle refers to a motor vehicle powered by electric energy, with or without provision for off-vehicle charging, in combination with gasoline, diesel or any other motive power. Provided, that, for purposes of the TRAIN Law, a hybrid electric vehicle must be able to propel itself from a stationary condition using solely electric motor.

8 Alternative energy vehicles refer to vehicles that run on non-fossil based fuels except for Compressed Natural Gas (CNG).

9 `DTI-BPS adopts International Standards on electric vehicles' (Department of Trade and Industry Bureau of Product Standards, 22 January 2020) accessed 19 May 2021.

10Under LTO Administrative Order No. AVT-2014-023, each entity is defined as follows: Manufacturer natural or juridical person engaged in the local manufacture of chassis and/or body of a motor vehicle; Assembler natural or juridical person engaged in the local assembly of a brand new motor vehicle engine/motor, chassis and/or body to make brand new motor vehicles; Importer natural or juridical person engaged in the importation of motor vehicles and/or its components; Dealers natural or juridical person engaged in the selling of motor vehicles and/or its components

Under LTO Administrative Order No. 2021-039, however, manufacturers, assemblers, importers or dealers of EVs that do not require registration need not seek accreditation from the LTO.

11Department of Energy, Providing for a Policy Framework on the Guidelines for the Development, Establishment, and Operation of Electric Vehicle Charging Stations in the Philippines, Department Circular No. DC2021-07-0023, Section 4 (9 July 2021).

12 Id. 13Senate Bill No. 1382, Senate Bill No. 1223, Senate Bill No. 638, Senate

Bill No. 479, Senate Bill No. 472, Senate Bill No. 174, House Bill No. 4075, House Bill No. 1004.

VIETNAM

IS VIETNAM READY FOR EV BREAKTHROUGH? GENERAL BACKGROUND OF ELECTRIC VEHICLE ("EV") DEVELOPMENT IN VIETNAM

1 https://vietnamnet.vn/en/feature/when-will-electric-cars-see-aboom-in-vietnam-713749.html

INFOGRAPHIC

MOVING TOWARDS GREEN MOBILITY

1 World Bank, `Global Roadmap of Action Toward Sustainable Mobility' (Sustainable Mobility for All, 2019) .

2 For more information on latest national policies on EV, please refer to "Infographic Series 1 (Part V) - Electrified Mobility in Malaysia: A Step Forward?" (January 2022)

3 Nancy Vandyke, Javier Morales Sarriera and Gurpreet Singh Sehmi, `Moving toward green mobility: three countries, three different paths' (World Bank Blogs, 19 December 2018) .

4 `Zero-Emission Vehicle Program' (California Air Resources Board) .

5 `Advanced Clean Cars Program' (California Air Resources Board) .

6 World Bank, `Global Roadmap of Action Toward Sustainable Mobility' (Sustainable Mobility for All, 2019) .

7 Ministry of Land, Infrastructure, Transport and Tourism, `White Paper on Land, Infrastructure, Transport and Tourism in Japan, 2019' Chapter 8 .

8 `KUTS' (Sarawak Metro) . 9 Sharon Kong, `Sarawak: Towards Sustainable Mobility' Borneo Post

(28 February 2021) . 10`Sarawak Energy, Petronas Ink MoU for Greater Collaboration in Hydrogen Production Exploration' (Sarawak Energy Berhad, 10 November 2020) . 11World Bank, `Global Roadmap of Action Toward Sustainable Mobility' (Sustainable Mobility for All, 2019) . 12`Eco Rail Mark' (Ministry of Land, Infrastructure, Transport and Tourism of Japan) . 13`Protecting the Alps' (Alpine Initiative) . 14World Bank, `Global Roadmap of Action Toward Sustainable Mobility' (Sustainable Mobility for All, 2019) . 15The Swiss Confederation, `National Reporting to CSD 18/19 by Switzerland Transport' (United Nations Department of Economic and Social Affairs Sustainable Development) . 16Fisheries Development Authority of Malaysia, `Annual Report 2018' . 17World Bank, `Global Roadmap of Action Toward Sustainable Mobility' (Sustainable Mobility for All, 2019) . 18Leila Nathoo, `Fisherman in Kenya swap petrol outboard motors for electric engines; BBC News (4 March 2021) . 19`Maritime Singapore Green Initiative' (Maritime and Port Authority of Singapore) .

20A reduction in carbon intensity of international shipping (to reduce CO2 emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008).

21`United Makes Bold Environmental Commitment Unmatched by Any Airline; Pledges 100% Green by Reducing Greenhouse Gas Emissions 100% by 2050' (United, 10 December 2020) .

22United Airlines' venture capital fund committed to supporting and investing in emerging technologies and sustainable solutions `United Airlines Ventures' (United) .

23`Electric Aircraft Set to Take Flight by 2026 Under New Agreements with United Airlines Ventures, Breakthrough Energy Ventures, Mesa Airlines, Heart Aerospace (United, 13 July 2021) .

24`British Airways Sets Its Sights On Zero Emissions Aircraft as It Announces Investment in Tech Innovator ZeroAvia to Speed Up Development of Hydrogen-Powered Aircraft' (British Airways, 31 March 2021) .

25`ZeroAvia Completes World First Hydrogen-Electric Passenger Plane Flight' (ZeroAvia, 25 September 2020) .

26`Exploring the possibility of electric and hydro powered flight' (Icelandair, 15 July 2021) .

27`MPA joins industry in Ammonia Fuelled Tanker Joint Development Project' (Maritime and Port Authority of Singapore, 24 February 2021) .

28`MPA Inks Collaborations with Partners to Advance Decarbonisation Efforts in Maritime Industry' (Maritime and Port Authority of Singapore, 21 April 2021) .

29`MPA and SMI to Co-fund Three Joint Industry-Research Consortiums to Develop and Pilot Electric Harbourcraft in Singapore' (Maritime and Port Authority of Singapore, 5 August 2021) .

ZICO Law is a network of leading independent local law firms focused on ASEAN. With a presence in 18 cities in all 10 ASEAN member countries, our over 300 lawyers enable our clients to enjoy value-added legal services by leveraging on a combination of local expertise and regional insights. More about us: www.zicolaw.com

ASEAN INSIDERS, by origin and passion

This publication was edited by ZICO Law Knowledge Management & Training. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without our prior written permission. This publication is updated as at 30 March 2022. The information in this publication is for general information only and is not a substitute for legal advice. If you require any advice or further information, please contact us.

ZICO Law Network - Fadjar Widjaksana Kandar and Amin Abdul Majid

Save & file
View original
Forward
Share
Follow
Please login to follow content.
Like
Instruct

Register now for your free, tailored, daily legal newsfeed service.

Green publication 2.0 | future of Mobility

Filed under

Popular articles from this firm

Abuse of dominance in Malaysia *

The Construction Industry Payment and Adjudication Act 2012 comes into force *

Competition Compliance in Malaysia *

Malaysia: Federal Court rattles bond market *

Vertical Agreements in Malaysia *

Related practical resources PRO

Related research hubs