Energy Efficiency and Conservation Act

If your factory or office building uses millions of ringgit worth of energy a year, the government now wants to know where every gigajoule goes — and wants you to show that you are working to cut waste. That is the crux of the Energy Efficiency and Conservation Act 2024, or Act 861, a law that has been in force since 1 January 2025.

The Act expands the regulation of energy efficiency from electricity alone to all forms of energy. It received royal assent from the Yang di-Pertuan Agong on 14 November 2024, was gazetted on 26 November 2024, and is enforced by the Energy Commission. This new framework is understood to replace the old Efficient Management of Electrical Energy Regulations 2008 (EMEER), although the details of that repeal still need to be verified against the official text of the regulations.

Who is subject to Act 861?

The Act does not target ordinary households. It goes after three groups: large energy consumers, certain buildings, and energy-using equipment.

For energy consumers, the dividing line is clear. Any party whose energy consumption equals or exceeds 21,600 gigajoules (GJ) over any 12 consecutive months is treated as an “energy consumer” under the Act. As a rough guide, that threshold is roughly equivalent to an annual electricity bill of RM2.4 million, or a natural gas bill of around RM1 million. Importantly, the calculation is the total of all energy a site uses, not electricity alone.

One thing that is often overlooked: Act 861 applies only in Peninsular Malaysia and the Federal Territory of Labuan. Sabah and Sarawak are excluded and given the responsibility of drawing up their own energy efficiency regulations.

What are the obligations of large energy consumers?

Once it crosses the threshold, an organisation takes on several ongoing responsibilities. It is not just filling in a form once; it is an energy governance system that has to be maintained.

• Appoint a Registered Energy Manager (REM). This is the person who collects and analyses energy consumption data, monitors performance, and prepares and submits energy efficiency reports.
• Develop and implement an Energy Management System (EnMS). This is a formal framework for tracking and continuously improving energy use.
• Carry out energy audits periodically by a Registered Energy Auditor (REA), and submit reports within the prescribed timeframe.
• Submit energy efficiency reports to the Energy Commission according to the prescribed schedule.

Energy managers and auditors are not just anyone. They must be Malaysian citizens with the prescribed qualifications, registered with the Energy Commission, and holding a valid practising certificate that must be renewed periodically.

What are the rules for buildings?

Buildings listed in the Third Schedule to the Act face a separate set of rules. The main target is office buildings with a gross floor area of 8,000 square metres and above.

For such buildings, the performance benchmark is the Building Energy Intensity (BEI) — the total energy used per square metre per year. Subject office buildings are required to keep their BEI at no more than 250 kWh/m²/year.

The party responsible for the building must:

• Apply for and display an energy intensity label, which must be renewed every year;
• Meet the prescribed energy intensity performance standards;
• Carry out energy audits periodically; and
• Prepare and implement an Energy Efficiency Improvement Plan based on the audit findings.

How does the Act regulate electrical equipment?

The third layer of the Act targets energy-using products (EUP) — goods sold to the public. Manufacturers and importers must register with the Energy Commission, ensure their products meet the Minimum Energy Performance Standard (MEPS), and display an energy efficiency rating label.

This framework initially covers ten common household product categories: air conditioners, refrigerators, domestic fans, lamps, televisions, washing machines, microwave ovens, electric rice cookers, freezers, and electric ovens. The star label you see on air conditioners in an electrical shop is the most familiar face of the Act to everyday consumers.

Summary of obligations by group

The table below summarises who must do what under Act 861.

Group	Threshold / Scope	Main obligations
Large energy consumers	≥ 21,600 GJ over 12 consecutive months (± RM2.4 million electricity bill)	Appoint a registered energy manager; implement EnMS; energy audit; periodic reporting
Buildings (Third Schedule)	Office buildings ≥ 8,000 m² gross floor area	Display energy intensity label (renew annually); BEI ≤ 250 kWh/m²/year; audit; improvement plan
Energy-using products	10 categories (air conditioners, refrigerators, fans, lamps, TVs, washing machines, microwave ovens, rice cookers, freezers, ovens)	Register with the ST; comply with MEPS; display efficiency label

What are the penalties for non-compliance?

Act 861 provides for significant penalties. Legal analysis of the Act’s provisions indicates that failure to develop and implement an energy management system can attract a penalty of up to RM50,000, while failure to carry out an energy audit and submit the required reports also carries a penalty of up to RM50,000. Breaches relating to equipment performance standards can attract fines and, for more serious cases, possible imprisonment.

Because the full penalty framework is spread across the Act and the Energy Efficiency and Conservation Regulations 2024, subject parties are encouraged to refer to the official text of the Act or seek legal advice before relying on any particular figure.

Why does this law exist?

Act 861 is not just an auditing exercise. It is one part of Malaysia’s drive towards carbon neutrality by 2050. By requiring the largest energy consumers to measure, report, and continuously improve their efficiency, the government hopes to curb the country’s energy demand — reducing waste and, with it, emissions — without having to build more generation capacity.

For businesses, the practical effect is modest but lasting: energy governance is now a statutory obligation, no longer a voluntary sustainability initiative.

What comes next

If your organisation might cross the 21,600 GJ threshold, the first step is to add up the annual energy consumption of all your sites and check whether you need to appoint a registered energy manager. Owners of large office buildings should check their gross floor area and calculate their current BEI against the 250 kWh/m²/year ceiling.

For the latest registration requirements, lists of registered energy managers and auditors, forms, and report submission deadlines, refer to the Energy Commission website directly. This content is a general overview and not legal advice; verify any threshold, penalty, or deadline against the official text of Act 861 and the Energy Efficiency and Conservation Regulations 2024.