Is Your Building
Legally Required to Conduct an Energy Audit Under EECA 2024?
Reading Time: Approximately
7-8 minutes
Key Takeaway: Malaysia's
Energy Efficiency and Conservation Act (EECA) 2024, effective January 1, 2025,
sets new mandates for energy management. For building owners and managers, this
means specific requirements for energy intensity labels and, crucially, energy
audits. Understanding Is Your Building Legally Required to Conduct an Energy
Audit Under EECA 2024? is critical, as non-compliance can lead to significant
penalties, while compliance offers substantial energy savings and enhanced
building value.
Problem: With Malaysia's new
EECA 2024 in effect, are you unsure if your building needs to conduct a
mandatory energy audit? The rules can seem complex, and the penalties for not
following them are serious.
Agitate: Ignoring this new law
could mean your building faces hefty fines and misses out on significant
cost-saving opportunities. Imagine unexpected financial hits and a tarnished
reputation for not being energy-efficient.
Solve: This guide will clearly
explain Is Your Building Legally Required to Conduct an Energy Audit Under EECA
2024? We'll break down the specific criteria for buildings, the role of energy
intensity labels, and when an audit becomes mandatory, helping you ensure
compliance and unlock potential savings.
Summary
The Energy Efficiency and
Conservation Act (EECA) 2024, which became law on January 1, 2025, applies to
"Persons in Charge of Buildings" (building owners or managers) for
specific office buildings. Your building is potentially affected if it is an
office building with a Gross Floor Area (GFA) of 8,000 square meters or more.
Under EECA, such buildings must first apply for and display a Building Energy
Intensity (BEI) label from the Energy Commission. An energy audit becomes
legally mandatory if your building fails to meet the minimum energy intensity
performance as shown by its BEI label (specifically, if it falls below a 2-star
rating). This audit must be conducted by a Registered Energy Auditor (REA), and
a resulting Energy Efficiency Improvement Plan must be submitted and
implemented. Understanding Is Your Building Legally Required to Conduct an
Energy Audit Under EECA 2024? is vital to avoid penalties and leverage energy
efficiency for cost savings.
1. The New Energy
Efficiency Law: EECA 2024 for Buildings
Malaysia has taken a big step
towards a more energy-efficient future with the Energy Efficiency and
Conservation Act (EECA) 2024, which officially started on January 1, 2025. This
new law aims to help Malaysia save energy, reduce waste, and move closer to its
goal of being carbon neutral by 2050.
While the EECA 2024 affects
many types of energy users (like big factories and commercial businesses), it
has special rules for buildings. If you own or manage a building, it's very
important to know how this law might affect you. The main question on many
minds is: Is Your Building Legally Required to Conduct an Energy Audit Under
EECA 2024? Let's find out.
The EECA 2024 focuses on
"Persons in Charge of Buildings." This means anyone who owns,
manages, or controls a building. For buildings, the law's main goals are to
make them use less energy and become more efficient over time.
2. Is Your Building
Affected? The Key Criteria
Not every building in Malaysia
is immediately affected by the EECA 2024. The law focuses on certain types and
sizes of buildings that use a significant amount of energy.
Your building is likely
affected if it meets these two main conditions:
- Type of Building: It must be an office
building. The law currently focuses on buildings that are built or used
mainly for office purposes.
- Size of Building (Gross Floor Area - GFA):
It must have a Gross Floor Area (GFA) of 8,000 square meters (m2) or more.
- What is GFA? GFA basically means the
total area of floor space inside the building. The EECA guidelines give
specific rules on how to measure this. For example, it usually includes
all enclosed areas on all floors but excludes areas like open parking spaces,
outdoor pedestrian pathways, or certain utility spaces within parking
areas.
- Why 8,000 m2? This threshold targets
larger office buildings where there's generally more potential for
significant energy savings.
What if my building is NOT an
office building or is smaller than 8,000 m2? For now, if your building doesn't
meet these specific criteria (e.g., it's a residential building, a small shop
lot, or a factory that doesn't fall under the "Energy Consumer"
category), it might not be directly required to follow the building-specific
rules of EECA 2024. However, it's still a good idea to consider energy
efficiency for cost savings and environmental benefits, and future expansions
of the law might include other building types or sizes.
If your building falls within
the affected category, then understanding Is Your Building Legally Required to
Conduct an Energy Audit Under EECA 2024? becomes very important.
3. The Building Energy
Intensity (BEI) Label: Your Building's Report Card
Before we talk about energy
audits, you need to understand the Building Energy Intensity (BEI) label. This
is a key part of the EECA 2024 for buildings.
What is a BEI Label?
- Think of the BEI label as a "report
card" for your building's energy performance. It shows how much
energy your building uses per square meter of its floor area over a year.
- The BEI is calculated in units like
Gigajoules per square meter per year (GJ/m2/year) or kilowatt-hours per
square meter per year (kWh/m2/year).
- The label will also come with a star
rating, usually from 1 to 5 stars, where 5 stars means your building is
very energy efficient, and 1 star means it's not.
Why is it important?
- Mandatory Display: If your building is
affected by the EECA 2024, you are legally required to apply for this BEI
label from the Energy Commission (EC) and display it in a visible spot in
your building. This makes the building's energy performance transparent to
everyone.
- Annual Renewal: This label is not a
one-time thing. It needs to be renewed annually, and your building must
maintain a minimum star rating (currently, a minimum of 2 out of 5 stars)
to continue meeting the requirements.
How does it connect to an
Energy Audit? The BEI label is the first step. It tells you how your
building is performing. The energy audit then becomes necessary if your
building's BEI shows that it's not performing well enough.
So, to answer Is Your Building
Legally Required to Conduct an Energy Audit Under EECA 2024?, the BEI label
plays a crucial role in deciding.
4. When an Energy
Audit Becomes MANDATORY for Your Building
This is the core question for
many building owners and managers. Under EECA 2024, an energy audit for a
building is not always a first step but a required action if your building
fails to meet certain energy performance standards.
Here's when an energy audit
becomes legally mandatory for your building:
- Failure to Meet Minimum BEI Performance:
If your office building (8,000 m2 GFA or more) applies for or renews its
Building Energy Intensity (BEI) label and the Energy Commission finds that
its energy intensity performance is below the minimum standard (e.g., it
falls below the required 2-star rating), then an energy audit becomes
mandatory.
- The Energy Commission will notify you if
your building fails to meet this minimum standard.
- Upon receiving this "notice of
non-compliance," you will then be required to conduct an energy
audit.
- Submission of Energy Efficiency
Improvement Plan: Once you conduct the energy audit due to non-compliance,
you must also prepare an Energy Efficiency Improvement Plan. This plan
outlines the specific steps your building will take to improve its energy
performance and reduce its energy intensity. Both the audit report and
this improvement plan must be submitted to the Energy Commission.
Who conducts the energy audit?
An energy audit required under EECA 2024 must be conducted by a Registered
Energy Auditor (REA). An REA is a professional who is officially registered
with the Energy Commission and has the necessary qualifications and experience
to carry out detailed energy assessments. You cannot simply have your
maintenance team do it; it must be a certified REA.
What happens after the audit?
- The REA will provide a detailed report
outlining where your building is losing energy, what equipment is
inefficient, and what changes can be made to save energy.
- Based on this audit, you (with the help of
your Registered Energy Manager, if you also have one, or the REA) will
create the Energy Efficiency Improvement Plan.
- You must then implement the measures
outlined in this plan to bring your building's energy performance up to
standard.
So, to be clear, Is Your
Building Legally Required to Conduct an Energy Audit Under EECA 2024? The
answer is yes, if your office building (8,000 m2 GFA or more) fails to meet the
minimum energy intensity performance standards after applying for its BEI label.
5. What Happens If You
Don't Comply? (Penalties)
The EECA 2024 is a serious law
with real consequences for non-compliance. Ignoring the requirements for your
building can lead to significant penalties.
Here are some of the potential
penalties if your building fails to comply with the EECA 2024 requirements,
including the mandatory energy audit:
- Fines: The Act outlines various offenses
for non-compliance, with fines ranging from RM20,000 to RM50,000 for
certain violations.
- This includes penalties for:
- Failure to apply for and display the
Building Energy Intensity (BEI) label.
- Failure to comply with the minimum
energy intensity performance standards (which would then trigger the
mandatory audit).
- Failure to conduct a mandatory energy
audit when required.
- Failure to submit the energy audit
report or the Energy Efficiency Improvement Plan.
- Failure to implement the approved Energy
Efficiency Improvement Plan.
- Additional Audits/Reports: The Energy
Commission (EC) may require your building to undergo further audits or
submit additional reports if there's a history of non-compliance.
- Damage to Reputation: Beyond financial
penalties, non-compliance can harm your building's reputation. In today's
world, energy efficiency and sustainability are increasingly important to
tenants, investors, and the public. Being seen as non-compliant can
negatively impact your building's image and market value.
It's important to note that
the EC is the body responsible for enforcing these rules and can conduct
inspections to ensure compliance. Therefore, proactively understanding Is Your
Building Legally Required to Conduct an Energy Audit Under EECA 2024? and taking
steps to comply is much better than facing enforcement actions.
6. Benefits Beyond
Compliance: Why Energy Audits Are Good for Business
While the main question for
many is Is Your Building Legally Required to Conduct an Energy Audit Under EECA
2024?, energy audits offer benefits far beyond just avoiding penalties. They
are a powerful tool for your business.
Think of an energy audit as a
health check-up for your building. It tells you where energy is being wasted,
much like a doctor identifies areas for improvement in your health.
Here's how an energy audit can
benefit your business:
- Significant Cost Savings:
- This is often the biggest and most
immediate benefit. Energy audits identify specific areas where your
building is consuming too much energy. This could be inefficient
lighting, old air conditioning systems, poor insulation, or even simple
operational habits.
- By fixing these issues, you can
significantly reduce your monthly electricity bills. Many businesses
achieve 10-30% or more in energy savings after implementing audit
recommendations.
- Improved Building Performance and Comfort:
- An energy-efficient building often means
a more comfortable building. Better insulation, optimized HVAC systems,
and improved lighting can lead to more stable indoor temperatures, better
air quality, and more pleasant working environments for tenants and
occupants.
- This can lead to higher tenant
satisfaction and retention.
- Increased Asset Value:
- Buildings with strong energy performance
(and good BEI ratings) are becoming more attractive to potential buyers
and tenants. They are seen as more modern, cost-effective to operate, and
environmentally responsible.
- This can increase your property's value
and marketability.
- Reduced Carbon Footprint:
- By using less energy, your building is
directly contributing less to greenhouse gas emissions. This helps your
company meet its environmental, social, and governance (ESG) goals and
contributes to Malaysia's national climate targets.
- A lower carbon footprint can enhance your
brand reputation and appeal to environmentally conscious stakeholders.
- Extended Equipment Lifespan & Reduced
Maintenance:
- Energy audits can pinpoint equipment that
is working too hard or inefficiently. By optimizing these systems, you
can reduce wear and tear, extend the lifespan of your equipment (like
chillers, pumps, fans), and lower maintenance costs.
- Access to Green Financing and Incentives:
- Conducting an energy audit and
implementing its recommendations can open doors to various green
financing options and government incentives. For example, the Energy
Audit Conditional Grant (EACG 2.0) from SEDA Malaysia can help cover the
cost of the audit itself. Additionally, investments in green technology
(like solar panels or high-efficiency chillers) identified through an
audit might qualify for tax allowances like the Green Investment Tax
Allowance (GITA).
- Enhanced Data and Decision-Making:
- The audit process involves collecting
detailed energy consumption data. This data, combined with the auditor's
analysis, provides valuable insights that allow you to make smarter,
data-driven decisions about your building's operations and future
investments.
So, while the question Is Your
Building Legally Required to Conduct an Energy Audit Under EECA 2024? is
important for compliance, the long-term benefits of conducting one far outweigh
the initial effort. It's an investment in your building's future efficiency,
profitability, and sustainability.
7. What to Do Next:
Your Action Plan
If you believe your building
might be affected by the EECA 2024 or you're simply looking to be more
energy-efficient, here's an action plan:
- 1. Check Your Building's GFA:
- Confirm the Gross Floor Area (m2) of your
office building. Get accurate measurements if you don't have them readily
available.
- Remember, the threshold for office
buildings is 8,000 m2 GFA or more.
- 2. Understand the BEI Label Process:
- If your building is affected, prepare to
apply for your Building Energy Intensity (BEI) label from the Energy
Commission. This will involve submitting energy consumption data.
- Start collecting historical energy bills
(electricity, natural gas, chilled water if applicable) for the past 12
consecutive months.
- 3. Prepare for Potential Audit:
- If your building's BEI falls below the
minimum standard, you will be required to conduct an energy audit.
- Start researching Registered Energy
Auditors (REAs). These are the only professionals legally allowed to
conduct audits for EECA 2024 compliance. You can find a list of
registered REAs on the Energy Commission's website.
- Consider applying for the Energy Audit
Conditional Grant (EACG 2.0) offered by SEDA Malaysia. This grant can
help cover some of the costs of a professional energy audit conducted by
an EC-registered ESCO. It's a great way to start your energy efficiency journey
with financial support.
- 4. Appoint a Registered Energy Manager
(REM) if required:
- While the immediate trigger for an audit
in buildings is usually a poor BEI, if your building also falls under the
"Energy Consumer" definition (using ≥21,600 GJ/year),
you'll also need to appoint a Registered Energy Manager (REM) and implement
an Energy Management System (EnMS). These two roles (REA and REM) often
work together, but have distinct requirements under EECA.
- 5. Develop an Energy Efficiency
Improvement Plan:
- Once an audit is conducted (whether
mandatory or voluntary), work with the REA to develop a clear plan to
implement the recommended energy-saving measures. Prioritize actions
based on potential savings and cost-effectiveness.
- 6. Monitor and Continuously Improve:
- Energy efficiency is an ongoing journey.
Regularly monitor your building's energy consumption, track the impact of
implemented measures, and look for new opportunities to save energy. This
also helps ensure your annual BEI label remains at or above the required
minimum.
By taking these proactive
steps, you can ensure your building is compliant with the EECA 2024 and
positioned for long-term energy savings and sustainability. The question Is
Your Building Legally Required to Conduct an Energy Audit Under EECA 2024? can
be answered with confidence, knowing you have a plan in place.
In summary, Malaysia's EECA
2024 fundamentally changes how large office buildings (8,000 m2 GFA and above)
must manage their energy. While the immediate requirement is to obtain and
display a Building Energy Intensity (BEI) label, an energy audit becomes
legally mandatory if your building fails to meet the minimum energy intensity
performance standard shown by its BEI rating. This audit must be performed by a
Registered Energy Auditor, leading to a mandatory Energy Efficiency Improvement
Plan. Beyond compliance and avoiding fines up to RM50,000, conducting an energy
audit offers substantial benefits: significant cost savings, improved building
comfort and value, a reduced carbon footprint, and access to valuable
government incentives. It's a strategic investment in your building's future.
Still wondering Is Your
Building Legally Required to Conduct an Energy Audit Under EECA 2024? or need
expert guidance on obtaining your BEI label and navigating compliance? Don't
risk penalties or miss out on savings. Contact us today for a professional assessment
and tailored solutions to ensure your building is compliant, efficient, and
future-ready. WhatsApp or call 0133006284!
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