Malaysia Transport and Climate Profile 2026

Outline

MALAYSIA

TRANSPORT AND CLIMATE PROFILE

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Background

Malaysia, an upper-middle-income country with a population of 35.6 million, faces significant challenges in reducing carbon emissions. In 2024, the transport sector emitted 61.2 million tonnes of greenhouse gases, making up about 18% of the total emissions across the economy. An important point is the absolute decoupling of sector growth from emissions: transport CO2 emissions grew by 4.3% annually before the Paris Agreement, but this rate has now slightly reversed to a -0.2% annual decline. Despite progress, the road sector still dominates with 97% of transport emissions, while rail and domestic navigation contribute almost nothing (0%), and domestic aviation accounts for 3%.

The sector's energy profile is still heavily reliant on fossil fuels. In 2023, oil products made up 94% of transport energy use, down slightly from 97% in 2015. Meanwhile, biofuels and electricity accounted for just 5% and <1%, respectively, indicating slow progress in adopting alternative fuels compared to regional counterparts. Although Malaysia's transport CO2 emissions per unit of GDP (44.5 gCO2e per USD) has decreased significantly since 2000, it remains above the Asia-Pacific average of 29.0 gCO2e per USD, highlighting the need for more structural changes efficiency.

Malaysia's transport networks are highly vulnerable to climate-related hazards. Since 2000, the nation has experienced 76 natural disasters, with flooding making up 84% of these incidents. Under a scenario with a 4.5-degree temperature rise, over 82% of Malaysia's road and rail infrastructure could face more frequent and severe rainfall events. Currently, the estimated average annual damage to transport infrastructure stands at 151.6 million USD, about 0.012% of GDP, with roads accounting for 58% of the losses and rail for 40%.

The economic cost of the current transport regime is further exacerbated by fossil fuel subsidies. Between 2016 and 2023, transport petroleum subsidies reached 24.4 billion USD, incurring high external costs to society, primarily through congestion (62%) and road crashes (35%). Furthermore, road fuel subsidies consume roughly 8% of total government revenue, creating a fiscal challenge as the country moves toward electrification.

Malaysia has a notably high motorization rate of 909 vehicles per thousand people, almost three times the Asia-Pacific average of 317. The road network is evenly divided between two-wheelers (47%) and light-duty vehicles (47%). Although rapid transit infrastructure grew from 4.7 km per million urban residents in 2015 to 11.0 km in 2024, accessibility is still limited. In 41% of Malaysian cities, 8 out of 10 residents do not have easy access to public transport, and only 16% of urban areas meet the 50% accessibility threshold.

Malaysia demonstrates significant potential in the shift to electric mobility, with a score of 81 out of 100 on UNEP's E-mobility Readiness Index. From 2017 to 2024, EV imports totaled 2.3 billion USD, making up 28% of all road vehicle imports by 2024. Currently, the market is mainly composed of light-duty vehicles, which constitute 98%, while electric buses represent just 1.8% of total bus imports trade.

Malaysia's climate ambition is anchored in its Third Nationally Determined Contribution (NDC 3.0), published in 2025. The country intends to reduce its GHG emissions intensity relative to GDP by 45% by 2030, compared with 2005 levels. For the 2035 horizon, Malaysia aims for an absolute reduction of 15–30 million tonnes of CO2 equivalent from peak levels. While the NDC and current long-term strategies lack transport-specific GHG targets, such targets are integrated into the Twelfth Malaysia Plan 2021-2025.

Current policy measures predominantly focus on mitigation (87%), with only 17% dedicated to adaptation. Main policy areas include transport institutional reform, vehicle efficiency standards, biofuels, and transit-oriented development (TOD). Important guiding documents beyond the NDC are the Low Carbon Mobility Blueprint 2021-2030 and the National Transport Policy 2019-2030. However, these frameworks currently see limited impact, as the NDC and Long-Term Strategy (LTS) together account for just 1% of the top 10 measure types, indicating that much of the operational policy work is embedded within sector-specific blueprints rather than overarching climate strategies commitments.

Malaysia's approach to minimizing unnecessary motorized travel is increasingly embedded in national spatial planning to counter urban sprawl and shorten trip distances. The National Physical Plan Chapter 7 (Implementation) and the National Low Carbon Cities Masterplan promote Transit-Oriented Development (TOD) as core strategies, emphasizing densification and mixed land use around transit hubs and corridors. The government advocates for "Work-Play-Shop-Stay" development models, as outlined in the National Transport Policy 2019-2030, to reduce the need for long-distance commutes. This effort is complemented by the Low Carbon Mobility Blueprint 2021-2030, which pushes local authorities towards "car-lite" planning and sustainable land use intensification.

The focus on transitioning to energy-efficient transportation remains high, with major investments in expanding the rail network and enhancing last-mile connectivity. The Twelfth Malaysia Plan 2021-2025 highlights projects like the East Coast Rail Link (ECRL), LRT3, and MRT3 as crucial for shifting freight and passenger travel from road to rail. To make public transport the preferred choice of the people, the National Land Public Transport Master Plan calls for seamless ticketing and comprehensive passenger info systems. Additionally, the Malaysia Road Safety Plan 2022-2030 and the Green Technology Master Plan 2017-2030 support active mobility development through dedicated micromobility lanes and "Bike N Ride" initiatives, aiming to boost non-motorized transport usage.

To enhance the efficiency of motorized transport, Malaysia is aggressively pursuing vehicle electrification and higher-grade biofuel adoption. The National Automotive Policy 2020 focuses on advancing Next Generation Vehicles (NxGV) and Energy Efficient Vehicles (EEV). The National Energy Policy 2022-2040 aims for a 38% electric vehicle market share by 2040, supported by the Low Carbon Mobility Blueprint 2021-2030, which plans for 10,000 charging stations nationwide by 2025. The phased rollout of biodiesel blends, from B20 to B30, is outlined in the National Biofuel Policy 2006 and the Twelfth Malaysia Plan 2021-2025 to lower emissions in heavy-duty and logistics sectors.