Wedoany.com Report-Nov 29, The Malaysian government has set an ambitious target to produce two million tonnes of hydrogen annually by 2030, according to local media reports.

From 2030, the nation’s Ministry of Science, Technology and Innovation (MOSTI) has revealed plans to scale this production capacity up to 16 million tonnes by 2050 under its Economy and Technology Roadmap (HETR).

H2 View understands that, up until 2030, Malaysia will focus on replacing grey hydrogen capacity with blue hydrogen, rather than green.

MOSTI Minister, Chang Lih Kang explained that blue hydrogen will be “crucial” for the metal, steel, oil and gas refining industries, along with ammonia production.

As reported by the press agency Bernama, Chang said, “Malaysia plans to phase out fossil-fuel-based grey hydrogen in the short term and transition towards green hydrogen in the long term through HETR.

“To bridge the gap, blue hydrogen will play a crucial role by leveraging existing fossil fuel infrastructure while incorporating carbon capture to reduce emissions.

“From 2030 to 2040, the focus would be on making green hydrogen more cost-competitive by improving technology and efficiency, paving the way for a sustainable future.”

He added that while the HETR predicts that hydrogen will become cheaper than diesel by 2050 through subsidies, Chang believes “it’s time to start redirecting energy subsidies towards renewables like hydrogen now.”

He continued, “This gradual shift, alongside financial incentives for cleaner fuels, can help accelerate the transition towards a sustainable energy future.”

Strategies will include the Green Investment Tax Allowance and Green Income Tax Exemption for hydrogen-based projects.

Chang reiterated that a successful implementation of HETR will enable Malaysia to reach “potential revenues projected to reach at least RM 905bn ($203bn) by 2050.”

Production initiatives are underway in the Southeast Asian country. Last January, KBR announced it would provide a technology license and proprietary engineering design to Lotte Chemical, Korea National Oil Corp and Samsung Engineering for a green ammonia project.

Furthermore, there are also plans for a 10GW green hydrogen production facility in the country’s state of Sabah, which could generate over 250,000 tonnes of green hydrogen per year.