Catalysing Malaysia’s green hydrogen regional hub aspirations

In tackling climate change, energy companies in Southeast Asia are stepping up their commitments to net zero carbon emissions through key investments in technology and a portfolio of clean energy assets, which include hydrogen.

In Malaysia, these efforts are aligned with the government’s active role in promoting green hydrogen to accelerate climate action and reduce greenhouse gas emissions through the development of policies and regulations to support the sector’s growth and attract investments.

Hydrogen is a versatile energy carrier that can be used in various applications, from combustion and electricity generation to industrial processes. The molecule is widely seen as a key element of the future energy system, contributing to a lower carbon future.

A colourless and odourless gas, hydrogen is mostly found bound with oxygen in the form of water and must be extracted through a production process involving a range of feedstocks and technology. Globally, hydrogen is classified into different colour categories based on the production method, as well as the feedstock and source of energy used.

Grey hydrogen is produced using fossil fuels like natural gas and coal through steam reforming and coal gasification, which release carbon dioxide (CO2) into the air in the process. Blue hydrogen is made in a similar manner with the introduction of carbon capture technology to prevent CO2 from being released.

Green hydrogen is considered the most premium as it is produced by splitting water using electrolysis powered by renewable energy like solar and offshore wind, emitting zero carbon emissions in the process. It is therefore recognised as a clean form of energy.

Still, a major hurdle in green hydrogen production lies in its high cost.

Through a collaboration with Universiti Kebangsaan Malaysia (UKM), Petronas has developed a proton exchange membrane (PEM) electrolyser to produce lower carbon hydrogen. This is the first commercial hydrogen electrolyser made in Southeast Asia, as others are mainly produced in Europe, the US and East Asia.

Colin Patrick, the general manager responsible for hydrogen result delivery and Borneo opportunities at Petronas, said efficiency and cost are two critical factors in hydrogen production, especially during the electrolysis process.

“Prioritising high efficiency can lead to an exponential rise in equipment capital costs. My role in both research and business requires me to look at achieving a balance between efficiency and cost considerations,” he says.

Petronas’ PEM electrolyser achieves around a 20% increase in efficiency compared to the technology that has existed for longer, which uses the current PEM that is in the market and alkaline water electrolyser (AWE). This allows the electrolyser to produce hydrogen at a much lower cost and contribute to achieving economies of scale, which is an all-important factor to push for more widespread adoption of green hydrogen.

Petronas’ foray into green hydrogen builds on the company’s experience in producing blue hydrogen at its petrochemical plants and refineries. Coupled with advances in electrolysis research and development, the global energy company also positions itself as a competitive green hydrogen solution provider.

Colin, who hails from Sarawak, played a pivotal role in catalysing lower carbon hydrogen production within the region. During his secondment to Sarawak Energy Bhd in 2018, he developed Southeast Asia’s first hydrogen production and refuelling station, while simultaneously formulating the Hydrogen Economic Blueprint for the state.

His efforts have helped propel Sarawak to the forefront of the green hydrogen economy’s advancement, making waves not only within Malaysia but also across the broader Southeast Asian landscape. Upon his return to Petronas in 2020, Colin took the lead on its hydrogen technology programme to produce the PEM hydrogen electrolyser and a route to market.

Petronas, through its subsidiaries, and SEDC Energy Sdn Bhd — a wholly-owned subsidiary of Sarawak Economic Development Corp — are collaborating on the commercial production of green hydrogen and the exploration of its value supply chain in Asia to meet the demand for global cleaner energy solutions. This arrangement includes the supply and operation of the PEM electrolyser to Sarawak’s Darul Hana and Batu Kawa refuelling stations.

Sarawak had a head start due to its favourable energy mix, in which about 75% of the state’s electricity is generated by hydropower, which is considered a form of renewable energy.

Green hydrogen is currently used in Sarawak mainly to decarbonise the transport sector. It is gaining more traction with its impending use to power an autonomous rapid transit (ART) fleet in Kuching that is expected to commence operations as early as 2025.

Colin says Sarawak’s active pursuit of a green hydrogen economy also helped attract foreign partners from South Korea and Japan to bring their investments and market expertise into the state. Companies from both countries are collaborating to build Sarawak’s first hydrogen plant in Bintulu.

“This is an area where we can develop the technology and see the application in our own country. We envision for this to be a new pillar of growth for both Petronas and Malaysia, and we believe Sarawak is our strategic partner for the launchpad,” Colin says.

Colin hopes to follow in Sarawak’s footsteps in terms of the growth in hydrogen application, where there are currently 11 fuel cell electric vehicles in the state’s market.

“To achieve this, we need to work hand in hand with government agencies, local government and other industry players such as the mobility and chemical industries to encourage more production of green hydrogen,” he adds.

He notes the Malaysian government’s recent announcement on the construction of a mobile refuelling station in Putrajaya, marking hydrogen’s first footing in Peninsular Malaysia.

“With all these news and developments, we hope to build interest and start seeing hydrogen production being scaled up, industrialised and, ultimately, generate positive market traction,” Colin says.

To further drive the hydrogen production momentum, Colin says he was tasked with getting the country’s supply chain ready.

“Getting the PEM project up and running hinges on nailing down a solid supply chain. A big hurdle is securing the delivery of various components. Finding some of the more specialised components in Malaysia can be a challenge as they are mostly produced in South Korea, Japan and certain parts of China,” he explains.

Another piece of the jigsaw is helping to design viable business models for users to accelerate adoption of green hydrogen. In Sarawak, Petronas is working with the state to explore several options, including using hydrogen generation as a service, the potential development of an electrolyser assembly plant in Kuching, and the more conventional model involving engineering, procurement and construction.

“This is where we want to partner with the local industry to advance their knowledge in producing complex and technical components,” Colin says.

Syaharudin Hassan, Petronas’ group procurement head of industry shaping and collaboration, echoes the importance of industry collaboration and the key role the company plays as an integrated energy solutions provider.

“We encourage collaboration across all industries to ensure that the industry ecosystem remains resilient and competitive. This is to ensure that we meet market demand, harness efficiency, and drive innovation and opportunities for local companies to expand in the new markets from development, manufacturing up to maintaining the energy solutions at scale.”