Do You Need to Hire a
Registered Energy Manager? A Guide to the EECA.
Reading Time: Approximately
7-8 minutes
Key Takeaway: Malaysia's
Energy Efficiency and Conservation Act (EECA) 2024, which became law on January
1, 2025, introduces mandatory energy management requirements for specific
businesses. For many "Energy Consumers," appointing a Registered Energy
Manager (REM) isn't just a suggestion—it's a legal obligation. Understanding Do
You Need to Hire a Registered Energy Manager? A Guide to the EECA is crucial
for ensuring compliance, avoiding significant penalties, and proactively
driving energy efficiency within your organization.
Problem: Malaysia's new EECA
2024 is now in full swing, and you're hearing a lot about "Registered
Energy Managers." Is this just another piece of jargon, or does it apply
directly to your business? Many companies are confused about whether they need
to hire one and what that even entails.
Agitate: Ignoring the
requirements of the EECA could lead to serious consequences, including hefty
fines and damage to your company's reputation. Without a clear understanding,
you risk non-compliance and missing out on significant energy cost savings.
Solve: This guide will
simplify Do You Need to Hire a Registered Energy Manager? A Guide to the EECA,
breaking down who needs one, what their responsibilities are, and the crucial
steps you need to take to comply. We'll help you navigate the new regulations
with confidence.
Summary
The Energy Efficiency and
Conservation Act (EECA) 2024, effective January 1, 2025, mandates that certain
"Energy Consumers" appoint a Registered Energy Manager (REM). Your
business is likely considered an "Energy Consumer" if its total
energy usage (electricity, natural gas, thermal energy, etc.) for any 12
consecutive months equals or exceeds 21,600 Gigajoules (GJ). Once notified by
the Energy Commission (EC), you typically have three months to appoint a REM.
The REM is responsible for establishing and monitoring an Energy Management
System (EnMS), preparing annual Energy Efficiency & Conservation (EE&C)
reports, advising on energy-saving measures, and ensuring data accuracy.
Failure to appoint a REM when required can lead to fines of up to RM50,000.
Understanding Do You Need to Hire a Registered Energy Manager? A Guide to the
EECA is essential for compliance and unlocking your business's energy-saving
potential.
1. The Energy
Efficiency and Conservation Act (EECA) 2024: A Game Changer
Malaysia is serious about
reducing energy waste and becoming more sustainable. That's why the Energy
Efficiency and Conservation Act (EECA) 2024 was created and came into effect on
January 1, 2025. This new law is a big deal because it brings new rules for how
businesses and even large buildings use energy. It replaces older rules like
the Efficient Management of Electrical Energy Regulations 2008 and expands to
cover more types of energy, not just electricity.
The main goals of the EECA
2024 are to:
- Improve energy efficiency: Make sure
energy is used wisely and not wasted.
- Promote energy conservation: Encourage
everyone to save energy.
- Support carbon neutrality: Help Malaysia
reach its goal of having zero net carbon emissions by 2050.
One of the most important
parts of this new law for businesses is the requirement to appoint a Registered
Energy Manager (REM). So, the big question on many minds is: Do You Need to
Hire a Registered Energy Manager? A Guide to the EECA will help clarify this.
2. Are You an
"Energy Consumer" Under EECA 2024?
The EECA 2024 doesn't apply to
every single business. It specifically targets those that use a large amount of
energy. The law uses the term "Energy Consumer" to define these
businesses.
So, what makes you an
"Energy Consumer"?
Your business is considered an
"Energy Consumer" if your total energy usage for any 12 consecutive
months (a full year) equals or exceeds 21,600 Gigajoules (GJ).
- What is 21,600 GJ?
- To give you a better idea, this amount of
energy is roughly equal to an annual electricity bill of about RM 2.4
million OR an annual natural gas bill of about RM 1 million.
- This threshold covers the consumption of
all types of energy resources listed in the Act, which includes
electricity, natural gas, coal, various types of fuels (diesel, petrol,
liquefied petroleum gas), and even thermal energy like chilled water or
steam, if you purchase it.
- How does the Energy Commission know if I'm
an Energy Consumer?
- The Energy Commission (EC), which is the
body in charge of this law, will identify businesses that meet this
energy consumption threshold.
- If your business is identified, the EC
will send you a written notice informing you that you are now classified
as an "Energy Consumer" under the EECA 2024.
If you receive this notice,
then the answer to "Do You Need to Hire a Registered Energy Manager?"
is very likely YES!
Once you receive that notice,
a clock starts ticking. You will have a specific timeframe (usually three
months) to appoint your Registered Energy Manager. This highlights why it's so
important to understand these requirements now, before you're scrambling to
comply.
3. What Exactly is a
Registered Energy Manager (REM)?
A Registered Energy Manager
(REM) is a qualified professional who is officially registered with the Energy
Commission (EC). They have specific knowledge and skills in energy management
and are crucial for helping affected businesses meet the EECA 2024 requirements.
Who can be a REM?
- Internal Employee: A REM can be one of
your existing employees who undergoes the necessary training and
certification to become registered with the EC. Or, you could hire a new
employee who is already a Registered Energy Manager.
- An internal REM can serve your company
and potentially a maximum of seven other related companies within the
same corporation.
- Outsourced Professional: You can also hire
an external energy consulting firm or an Energy Service Company (ESCO) to
provide REM services. They will assign a certified REM to your company on
a contract basis.
- For initial appointments, an outsourced
REM can only be appointed for a period not exceeding three years from the
date you receive the EC notice. This ensures companies consider building
internal capabilities in the long run.
Types of REMs: The EECA 2024
introduces two types of REMs:
- REM Type 1: Focuses on energy management
systems, electrical energy system audits, and general energy-saving
measures.
- REM Type 2: Has all the knowledge of Type
1, plus additional knowledge on thermal energy systems audits and thermal
energy-saving measures. The type of REM you need depends on your company's
energy consumption threshold (e.g., if you consume 50,000 GJ/year or more,
you'll need a Type 2 REM).
Understanding the types of
REMs and whether you need to appoint an internal or external one is a key part
of answering Do You Need to Hire a Registered Energy Manager? A Guide to the
EECA.
4. What Are the Duties
of a Registered Energy Manager (REM)?
A Registered Energy Manager
(REM) isn't just a title; it's a role with very important duties under the EECA
2024. These duties are designed to ensure your company effectively manages its
energy and complies with the law.
Here are the key
responsibilities of a REM:
- 1. Develop and Implement an Energy
Management System (EnMS):
- The REM is responsible for helping your
company create and put into action an Energy Management System (EnMS).
Think of an EnMS as a structured plan or framework (like ISO 50001) that
helps your company continuously monitor, control, and improve its energy
use.
- This involves setting up energy policies,
setting energy saving goals, creating action plans, and making sure the
system is running smoothly. You will typically have 12 months from
receiving the EC notice to establish your EnMS.
- 2. Monitor EnMS Implementation:
- It's not enough to just set up the
system. The REM must actively monitor how well the EnMS is working.
- This includes verifying the accuracy of
collected energy data, ensuring regular meetings of your company's Energy
Management Committee (at least four times a year), and reviewing the
system with top management (at least once a year).
- 3. Prepare Energy Efficiency &
Conservation (EE&C) Reports:
- The REM is in charge of preparing your
company's annual Energy Efficiency & Conservation (EE&C) Report.
This report details your energy consumption, the performance of your
EnMS, and any energy efficiency improvements made.
- This report must be submitted to the
Energy Commission annually. You'll typically need to submit your first
report within 30 days after the end of the first year of your REM
appointment.
- 4. Ensure Accuracy of Information in
Reports:
- The REM must make sure that all the data
and information provided in the EE&C report are accurate and
reliable. This involves cross-checking data with utility bills, invoices,
maintenance records, and energy audit reports.
- 5. Advise on Energy Saving Measures:
- The REM doesn't just report on energy;
they also advise your company on how to save it. They will use findings
from energy audits (conducted by a Registered Energy Auditor, REA) to
propose specific actions and projects that can reduce energy consumption.
- They also monitor the implementation of
these energy-saving measures.
- 6. Perform Other Duties as Determined by
the Commission:
- The Energy Commission may, from time to
time, determine other duties that the REM must carry out, such as
collecting additional data related to production outputs or operating
hours for industrial facilities.
These duties show that a REM
plays a central and active role in your company's energy management strategy.
Their work is vital for both compliance and for helping your business save
money by being more energy efficient. This directly answers the core question:
Do You Need to Hire a Registered Energy Manager? A Guide to the EECA makes it
clear that if you're an "Energy Consumer," this role is
indispensable.
5. Penalties for Not
Appointing a Registered Energy Manager
The EECA 2024 is a serious
law, and the Energy Commission has the power to enforce its requirements.
Failing to comply, especially with a fundamental requirement like appointing a
Registered Energy Manager (REM), can lead to significant penalties.
Here's what could happen if
your company doesn't appoint a REM when required:
- Hefty Fines:
- The EECA 2024 specifies penalties for
various offenses. For the failure to appoint a Registered Energy Manager,
your company can face a fine not exceeding RM 50,000.
- This is a substantial amount that can
negatively impact your business's finances.
- Fines for Other Non-Compliance:
- Beyond just not appointing a REM, there
are also fines for other related failures, such as:
- Failure to comply with the Energy
Management System (EnMS) requirements (fine not exceeding RM 20,000).
- Failure to comply with the EE&C
Report requirements (fine not exceeding RM 50,000).
- Failure to comply with energy audit
requirements (fine not exceeding RM 50,000).
- Damage to Reputation:
- In today's world, environmental
responsibility and good governance are increasingly important.
Non-compliance with a major energy efficiency law can damage your
company's reputation among customers, investors, and business partners.
- This can lead to a loss of trust, missed
business opportunities, and difficulties in attracting talent.
- Operational Disruption:
- The Energy Commission can carry out
inspections and may take further actions if they find your company
non-compliant. This could lead to disruptions in your operations as you
try to urgently rectify the situation.
It's clear that the financial
and reputational risks of not complying with the EECA 2024 are significant.
Therefore, understanding Do You Need to Hire a Registered Energy Manager? A
Guide to the EECA is not just about ticking a box; it's about protecting your
business and setting it up for success in an increasingly energy-conscious
economy. Proactive compliance is always more cost-effective than dealing with
penalties.
6. The Benefits of
Having a Registered Energy Manager (Beyond Compliance)
While avoiding penalties is a
strong reason to appoint a Registered Energy Manager (REM), their value to your
business extends far beyond just meeting legal requirements. A good REM can be
a strategic asset, driving real savings and long-term benefits.
Here's how a REM can benefit
your company:
- Significant Cost Savings:
- This is perhaps the most direct and
tangible benefit. A REM's primary goal is to optimize energy use. They
can identify inefficiencies, recommend cost-effective upgrades (like LED
lighting, more efficient motors, or better insulation), and implement
operational changes that lead to substantial reductions in your monthly
energy bills.
- These savings can quickly offset the cost
of hiring or training a REM.
- Improved Operational Efficiency:
- By continuously monitoring and analyzing
energy consumption, a REM can help fine-tune your operations. This often
leads to smoother processes, less equipment downtime, and better overall
performance of your machinery and systems.
- Enhanced Sustainability and ESG
Performance:
- A REM helps your company reduce its
carbon footprint by lowering energy consumption. This directly
contributes to your Environmental, Social, and Governance (ESG) goals,
which are becoming increasingly important for investors, customers, and
employees.
- Strong ESG performance can improve your
brand image and attract responsible investment.
- Access to Incentives and Grants:
- REMs are often knowledgeable about
government incentives, grants, and financing options available for energy
efficiency projects in Malaysia. For example, the Energy Audit
Conditional Grant (EACG 2.0) from SEDA Malaysia can help cover the costs
of energy audits, which the REM can then use to propose energy-saving
measures.
- They can help your company apply for and
utilize these programs, further reducing the financial burden of energy
upgrades.
- Risk Management:
- A REM helps manage the risks associated
with rising energy prices, potential energy supply disruptions, and
future regulatory changes. By making your operations more
energy-efficient, your business becomes more resilient.
- Data-Driven Decision Making:
- The REM's role involves collecting and
analyzing vast amounts of energy data. This provides your management team
with accurate, actionable insights into your energy performance, enabling
smarter, data-backed decisions about investments and operational strategies.
- Increased Awareness and Culture Change:
- An effective REM can foster a culture of
energy awareness throughout your organization. By educating employees and
encouraging energy-saving habits, they can create a collective effort
that contributes to overall efficiency.
- Competitive Advantage:
- In a world increasingly focused on
sustainability, being an energy-efficient company can give you a
competitive edge. It can appeal to clients who prioritize sustainable
suppliers and differentiate you in the market.
In short, a Registered Energy
Manager is not just a compliance officer; they are an investment in your
company's financial health, operational excellence, and long-term
sustainability. The answer to Do You Need to Hire a Registered Energy Manager?
A Guide to the EECA isn't just about meeting legal obligations, but about
seizing opportunities for growth.
7. Your Action Plan:
What to Do Next
If you suspect your business
might be an "Energy Consumer" under the EECA 2024, or if you've
already received a notice from the Energy Commission, here's a practical action
plan:
- 1. Verify Your Energy Consumption:
- Gather all your energy bills
(electricity, natural gas, diesel, etc.) for the past 12 consecutive
months.
- Calculate your total energy consumption
in Gigajoules (GJ). Remember, the threshold is 21,600 GJ/year. If you
need help with this calculation, seek expert advice.
- 2. Await (or Respond to) EC Notification:
- The Energy Commission (EC) is responsible
for notifying businesses that meet the "Energy Consumer"
criteria.
- If you receive such a notice, take it
seriously. It marks the official start of your compliance timeline.
- 3. Decide on Your REM Strategy (Internal
vs. Outsourced):
- Consider the pros and cons of hiring an
in-house REM versus engaging an outsourced REM.
- In-house: Do you have an existing
employee with a technical background (engineering, facilities management)
who is willing and capable of undergoing REM training and certification?
Is your company willing to invest in their long-term development?
- Outsourced: Do you prefer to tap into
immediate external expertise without the long-term commitment of a new
hire? Remember the three-year initial limit for outsourced REMs.
- 4. Identify and Appoint Your REM:
- If going in-house, identify the candidate
and enroll them in an EC-registered REM training program.
- If outsourcing, research and select an
EC-registered firm or individual REM. Ensure they are certified for the
appropriate REM Type (Type 1 or Type 2) based on your consumption.
- Formally appoint the REM within the
three-month deadline from receiving the EC notice.
- 5. Begin Energy Management System (EnMS)
Implementation:
- Once your REM is appointed, work with
them to develop and implement your Energy Management System (EnMS) within
the stipulated 12-month timeframe. This involves setting policies,
objectives, targets, and establishing monitoring procedures.
- 6. Prepare for Annual Reporting:
- Your REM will be responsible for
preparing annual Energy Efficiency & Conservation (EE&C) Reports.
Ensure you have systems in place to collect accurate energy consumption
data regularly.
- 7. Explore Energy Audit and Efficiency
Opportunities:
- Work with your REM (who will likely
coordinate with a Registered Energy Auditor, REA) to conduct energy
audits. Use the findings to identify and implement energy-saving
measures.
- Look into grants like the Energy Audit
Conditional Grant (EACG 2.0) from SEDA Malaysia to help fund your initial
energy audits.
- 8. Maintain Continuous Improvement:
- Energy management is an ongoing journey.
Regularly review your EnMS, monitor energy performance, and continuously
seek new ways to improve efficiency.
By following these steps, you
can confidently answer Do You Need to Hire a Registered Energy Manager? A Guide
to the EECA and ensure your business is fully compliant, avoids penalties, and
is on the path to significant energy savings and a more sustainable future.
In summary, with the EECA 2024
now in force, appointing a Registered Energy Manager (REM) is a mandatory
requirement for Malaysian businesses classified as "Energy Consumers"
– those consuming 21,600 GJ/year or more. Upon receiving a notice from the
Energy Commission, you have typically three months to appoint a REM, who will
then be instrumental in establishing your Energy Management System, submitting
annual EE&C reports, and guiding your energy-saving initiatives. Failure to
comply can result in hefty fines up to RM50,000. Beyond avoiding penalties, a
REM is a strategic asset, driving tangible cost savings, enhancing your
company's sustainability profile, improving operational efficiency, and
providing access to valuable government incentives. This is not merely a
compliance burden but a crucial investment in your business's future.
Still uncertain whether Do You
Need to Hire a Registered Energy Manager? A Guide to the EECA applies to your
business, or need expert guidance on compliance and energy management? Our team
of certified professionals can provide tailored advice and support to ensure
your business meets its legal obligations and unlocks its full energy-saving
potential. Don't delay—WhatsApp or call us today at 0133006384 for a
comprehensive consultation!
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