Malaysia’s push toward industrial decarbonisation is no longer driven by ambition alone, but by all measures is a very real goal. With RM10.5 billion in cumulative energy savings already recorded, the country is entering a new phase where efficiency must move beyond pilot projects and become embedded across operations, infrastructure and policy enforcement.
Much of this progress has been shaped by Malaysia’s strategic alignment between policy and private sector innovation. The National Energy Transition Roadmap (NETR) and Belanjawan 2026 have created clearer targets and introduced levers such as green financing, digital upskilling and technology adoption incentives. But the real inflexion point is occurring at the factory floor, where predictive maintenance, condition monitoring, and smart cooling systems are turning sustainability goals into measurable operational outcomes.
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As the country continues to industrialise, particularly in manufacturing and built environments, the emphasis is shifting from awareness to accountability. Businesses are being held to more rigorous standards, with data-driven verification emerging as a core expectation. Tools such as Schaeffler’s OPTIME and Daikin’s Remote Monitoring System illustrate how digital platforms are now essential to quantify energy savings, track asset performance and validate returns on investment.
What separates Malaysia’s current approach from previous decades is its emphasis on integration. The strongest results are seen not in isolated tech upgrades, but in end-to-end lifecycle design. Predictive systems tied to engineering insights and real-time feedback loops that inform proactive action are driving the performance gains needed to meet national energy goals.
Yet challenges persist. Skills gaps, financing constraints and a tendency to treat energy upgrades as compliance exercises continue to slow adoption. The industry must now reframe energy efficiency as a lever for competitiveness, not just sustainability.
We got a chance to speak to industry leaders Kelvin Chong, Managing Director of Schaeffler Malaysia and Desmond Tay, Senior Manager (HOD), VRV & Project Sales at Daikin Malaysia, to help outline the practical frameworks, mindset shifts and technologies helping manufacturers move from intent to impact—making sustainability a function of business value, not cost.
What are the main drivers behind Malaysia achieving RM10.5 billion in cumulative energy savings, and which initiatives have proven most effective at the industrial level?
Kelvin Chong (KC): Malaysia’s strong focus on industrial digitalisation has been a major catalyst behind these energy savings. Across manufacturing plants, predictive maintenance has reduced unplanned downtime, avoided unnecessary energy losses and improved overall equipment efficiency. Within Schaeffler’s portfolio, our condition monitoring and energy monitoring solutions enable manufacturers to identify inefficiencies in real time, helping them to act before minor issues turn into major energy drains.
The collaborative approach under initiatives such as the National Energy Efficiency Conference (NEEC) has also been pivotal. By encouraging data-sharing and benchmarking between industry players, the collective impact of private sector innovation is amplified, creating a compounding effect on national energy savings.
Desmond Tay (DT): For Malaysia’s industrial and commercial sectors, the adoption of smart cooling systems and inverter-driven VRV technologies has played a crucial role in reducing energy consumption. These systems adjust cooling output precisely to actual demand, preventing energy waste while maintaining comfort and productivity.
Daikin’s continued investment in high-efficiency HVAC systems using low-GWP refrigerants directly aligns with the country’s energy transition targets. The greatest energy savings, however, come when technology upgrades are paired with optimised system design and digital building controls, ensuring that cooling performance, energy use and cost efficiency work hand in hand.
With Belanjawan 2026 reinforcing the National Energy Transition Roadmap (NETR), how can industries move from policy awareness to measurable operational results?
KC: Policies provide the vision, but execution depends on embedding energy efficiency into day-to-day operations. Industries must move beyond compliance and integrate energy KPIs within their performance frameworks. With real-time monitoring and data-driven insights, companies can bridge the gap between policy intent and measurable outcomes.
The private sector’s role is to prove scalability, transforming successful pilot projects into standard operational practices. This shift turns sustainability from a reporting exercise into a performance-driven business function.
DT: Policy awareness is only the first step. What truly drives transformation is when businesses translate that awareness into system-level design and technology adoption. We work closely with clients and government agencies to verify savings through digital tools such as the Daikin Remote Monitoring System, which provides real-time visibility into HVAC performance. This quantifies progress toward policy goals and builds the business case for continuous efficiency improvement.
What practical frameworks or data systems are Malaysian manufacturers using to verify efficiency gains and maintain accountability to NETR targets?
KC: Digital condition monitoring systems such as Schaeffler OPTIME are being implemented across production lines to quantify machine-level efficiency and energy optimisation. These systems capture real-time data on vibration, temperature and performance anomalies, enabling manufacturers to monitor energy intensity and correlate maintenance actions with measurable outcomes. Predictive analytics further ensures accountability by tracking improvements over time and documenting the impact of proactive maintenance on overall energy use.
DT: Daikin’s remote monitoring and reporting platforms give customers a clear view of energy trends across their facilities. By enabling real-time data visualisation and performance tracking, clients can verify actual reductions in energy consumption against targets. Many of our partners also benchmark their results against Green Building Index (GBI) standards, maintaining transparency and alignment with Malaysia’s broader sustainability objectives.
At NEEC 2025, many firms showcased predictive maintenance and automation tools. What separates projects that deliver ROI from those that remain pilots?
KC: The differentiator is full lifecycle integration. Successful projects combine sensors, AI-driven analytics and deep engineering expertise, supported by a maintenance culture that acts on insights rather than treating them as optional data points. ROI-driven initiatives always begin with a clear baseline and measurable metrics tied to production efficiency, downtime reduction and energy performance.
Solutions that go beyond machinery health monitoring to reveal the root causes of potential failures allow corrective actions to be taken quickly, ensuring that the ROI achieved is both tangible and sustainable in the long term.
DT: Projects that deliver consistent ROI balance digital and human intelligence. Skilled operators who understand how to interpret system data are just as critical as the technology itself. For us, success happens when clients treat smart HVAC not as a compliance-driven upgrade, but as a long-term asset that enhances operational performance and resilience. This mindset ensures that energy savings and productivity improvements remain sustainable beyond the pilot stage.
How do you ensure that sustainability measures, such as smart cooling or automation, improve competitiveness rather than simply compliance metrics?
KC: We treat energy efficiency as a business advantage, not just an environmental obligation. When clients optimise their motion systems, they benefit from lower total cost of ownership, improved throughput and reduced equipment wear. By embedding efficiency into operations, companies can achieve higher uptime, reduced waste and longer asset lifecycles, all of which contribute directly to competitiveness in an increasingly efficiency-driven market.
DT: Smart cooling technologies are designed to deliver both environmental and business benefits. Beyond reducing carbon emissions, efficient HVAC systems lower operational costs and enhance occupant comfort, factors that directly affect productivity and brand value. By combining VRV technology with intelligent control systems, we help clients achieve measurable performance gains that go beyond regulatory compliance, turning sustainability into a core part of their competitive strategy.
From your perspective, what is holding Malaysian industries back from faster technology adoption: skills, financing, or policy friction?
KC: Skill readiness remains a key barrier. Predictive maintenance and digital analytics demand new technical capabilities that are still developing across many sectors. Our AI-powered OPTIME solution helps bridge this gap by predicting failures and identifying possible root causes, simplifying maintenance planning for teams with limited expertise.
Financing mechanisms have improved, yet SMEs still need clearer ROI models to justify investments. Policy support should continue to focus on digital readiness and technical upskilling, as awareness of the tangible benefits of predictive technologies remains limited.
DT: Financing and short-term cost considerations continue to be the main challenges, especially for smaller firms. While awareness is improving, adoption would accelerate with more accessible green financing and leasing models that lower upfront barriers. Continued alignment between government incentives and tangible business ROI will help create the momentum needed for mass adoption.
How are Schaeffler Malaysia and Daikin Malaysia embedding digitalisation into their sustainability roadmaps and what lessons can peers draw from these efforts?
KC: Data and digitalisation are crucial for Schaeffler to advance our sustainability goals. Our “Factory of the Future” concept illustrates how digital ecosystems can sustainably revolutionise production processes. The key lesson is scalability, begin with targeted, measurable solutions that generate proven ROI, then expand digitalisation efforts across the wider operation for lasting impact.
DT: Digitalisation is central to how Daikin approaches sustainable cooling. By integrating IoT and cloud analytics into our systems, we enable adaptive, high-efficiency HVAC environments. The Daikin Remote Monitoring System ensures transparency by allowing clients to track and verify energy performance continuously.
Our experience shows that successful digitalisation must remain customer-centric, and technology should simplify energy management decisions, not complicate them.
Looking ahead to 2026, what single change, policy, financing, or mindset would most accelerate Malaysia’s shift toward a low-carbon industrial economy?
KC: To accelerate the shift, the industry needs broader adoption of data-driven efficiency reporting frameworks to quantify real impact. Incentivising the digital retrofitting of legacy machinery can unlock significant untapped savings. Most importantly, there must be a shift in mindset, from viewing energy efficiency as a cost centre to recognising it as a profit centre.
When industries adopt a total cost of ownership perspective rather than focusing solely on upfront savings, they unlock the financial and environmental value that drives long-term decarbonisation.
DT: Performance-based contracting could be a game-changer. By tying project value to lifecycle energy and cost savings rather than initial capital outlay, it encourages businesses to invest in smarter, more sustainable systems. Beyond policy or financing, the most crucial change is cultural, seeing sustainability as an integral part of competitiveness, not an external compliance requirement.