EECA 2024: Transforming Malaysia’s Commercial Buildings Through Energy Efficiency Standards and Compliance Strategies

Introduction: Understanding Malaysia’s Energy Efficiency Paradigm Shift

The Energy Efficiency and Conservation Act (EECA) 2024 represents a watershed moment in Malaysia’s approach to sustainable building practices and energy management. Receiving royal assent on November 14, 2024, and officially enforced from January 1, 2025, this legislation establishes a comprehensive framework to regulate energy consumption and promote conservation across commercial, industrial, and residential sectors in Malaysia.^[1][2]

This regulatory transformation comes at a critical juncture as Malaysia pursues aggressive decarbonization targets: a 45% reduction in carbon intensity by 2030 (compared to 2005 levels) and carbon neutrality by 2050.^[3] No longer an optional corporate responsibility initiative, energy efficiency has evolved into a legal obligation for thousands of buildings and facilities across the nation.

Unlike previous approaches that relied primarily on voluntary adoption, EECA 2024 introduces mandatory compliance pathways, backed by substantial penalties. The legislation supersedes the earlier Efficient Management of Electrical Energy Regulations 2008 (EMEER 2008), expanding both scope and enforcement mechanisms while introducing specific provisions for thermal energy alongside electrical energy management.^[2]

Geographic Applicability: It’s crucial to understand that EECA 2024 applies exclusively to Peninsular Malaysia and the Federal Territory of Labuan. Sabah and Sarawak will develop their own regulatory frameworks for energy efficiency governance.^[2]

Legislative Framework: Scope, Authority, and Classifications

Regulated Entities and Thresholds

EECA 2024 categorizes regulated entities with remarkable specificity, establishing clear thresholds for compliance:

1. Energy Consumers: Any installation consuming 21,600 gigajoules (GJ) or more of energy over 12 consecutive months. This equates to approximately:
   1. RM2.4 million in annual electricity costs, or
   1. RM1 million in natural gas consumption.^[2][3]
2. Commercial Office Buildings: Any office building with gross floor area (GFA) of 8,000 square meters (approximately 86,111 square feet) or more.^[4][2]
3. Energy-Using Products: Domestically used appliances and other products that consume energy, subject to minimum energy performance standards (MEPS).^[4]

Collectively, these classifications encompass approximately 4,100 commercial buildings and 2,000-3,000 industrial facilities nationwide, representing significant energy consumers.^[5][4]

Regulatory Authority: Energy Commission Powers

The Energy Commission (EC) serves as the primary regulatory body for EECA implementation, with expansive powers including:

1. Classification Authority: The EC determines which entities qualify as energy consumers or regulated buildings, and can request energy consumption data directly from utility providers like Tenaga Nasional, Gas Malaysia, and Petronas Gas.^[4]
2. Notice Issuance: The EC issues official notices to entities classified as energy consumers or regulated buildings, triggering compliance timelines.^[6]
3. Inspection and Enforcement: Authorized officers may enter premises to inspect compliance, seize non-compliant items, and initiate legal proceedings.^[7]
4. Registration Management: The EC manages the registration of Energy Managers and Energy Auditors, and issues practicing certificates.^[8]

Commercial Building Requirements: Detailed Compliance Framework

Building Energy Intensity (BEI) Calculation Methodology

The cornerstone metric for commercial building compliance is the Building Energy Intensity (BEI), calculated using the following formula as specified in the EC’s guidelines:

Crucial Boundary Definitions for GFA Calculation:
The Energy Commission guidelines explicitly exclude certain areas from GFA calculations:^[9]

• Parking spaces and associated circulation areas
• Mechanical or electrical spaces within parking areas
• Open or covered parking areas outside the building
• Staircases and lift shafts on floors other than ground floor/lobby

This precise delineation is essential for accurate BEI calculations and proper compliance determination.

Energy Efficiency Rating (EER) System

Commercial buildings must meet specific energy intensity thresholds categorized within a 5-star rating system:

For Standard Office Buildings:

Star Rating	BEI Range (kWh/m²/year)	Performance Classification
5-Star	≤90	Very efficient
4-Star	91–110	Efficient
3-Star	111–160	Moderately efficient
2-Star	161–200	Slightly efficient
1-Star	>200	Least efficient

For Office Buildings with Centralized Chilled Water Systems:

Star Rating	BEI Range (kWh/m²/year)	Performance Classification
5-Star	≤190	Very efficient
4-Star	191–240	Efficient
3-Star	241–340	Moderately efficient
2-Star	341–420	Slightly efficient
1-Star	>420	Least efficient

Minimum Compliance Threshold: All buildings must achieve and maintain at least a 2-Star rating to meet basic compliance standards.^[9] Buildings failing to meet this threshold face mandatory energy audit requirements and remediation.

Energy Intensity Labeling Requirements

Commercial buildings must display an Energy Intensity Label with specific characteristics:

• Prominently positioned in a conspicuous location within the building
• Standardized dimensions of 300mm x 400mm
• Renewed annually
• Displaying the building’s BEI value, star rating, and expiry date^[4]

Enhanced Scrutiny for High-Energy Buildings

Beyond the star rating system, EECA establishes a separate regulatory threshold for buildings with excessive energy consumption:

BEI >250 kWh/m²/year: Buildings exceeding this threshold are classified as “high-energy intensity facilities” requiring accelerated compliance measures:^[5]

• Mandatory energy audits regardless of star rating
• Prioritized retrofitting of HVAC, lighting, and integration of renewable energy systems
• Shortened compliance timelines (12 months versus standard 5-year cycles)

This dual-threshold approach enables regulators to target particularly inefficient buildings for expedited remediation while maintaining the graduated EER system for public transparency.

Implementation Timeline and Compliance Pathway

Key Compliance Milestones

The EECA 2024 establishes specific timelines for regulated entities, triggered by notification from the Energy Commission:^[6]

1. Initial Notification: The EC notifies entities of their status as energy consumers or regulated buildings.
2. Registered Energy Manager (REM) Appointment: Within 3 months of notification, energy consumers must appoint an REM.
3. Energy Management System (EnMS) Implementation: Within 12 months of REM appointment, energy consumers must develop and implement an EnMS.
4. First Energy Audit: Within 12 months of notification, energy consumers must conduct their first energy audit through a Registered Energy Auditor (REA).
5. Annual Reporting Cycle: Within 30 days after completing the first year of REM appointment, and annually thereafter, consumers must submit an Energy Efficiency and Conservation Report (EECR).
6. Five-Year Compliance Cycle: Following the initial audit, buildings have a five-year period to implement recommended energy efficiency measures before undergoing a second audit.

Detailed Energy Management System (EnMS) Requirements

The EnMS mandated by EECA must include specific components that are also aligned with ISO 50001 standards:^[10]

1. Energy Policy Development: Documented commitment to continuous improvement in energy performance.
2. Energy Review Process: Detailed analysis of energy sources, consumption patterns, and significant energy users.
3. Energy Baseline Establishment: Quantified reference points against which future energy performance can be measured.
4. Energy Performance Indicators (EnPIs): Metrics for measuring and monitoring energy performance.
5. Action Plans and Objectives: Specific targets for energy performance improvement with implementable actions.
6. Operational Controls: Procedures to control operations affecting significant energy use.
7. Monitoring and Measurement: Systems to track energy consumption and effectiveness of improvement measures.
8. Documentation and Record-keeping: Comprehensive documentation of the EnMS and energy performance records.

For a more detailed understanding of EECA 2024 & EnMS compliance requirements, check out our Ultimate Guide To EECA 2024 Compliance here.

Enforcement Framework and Penalties

Detailed Penalty Structure

EECA 2024 establishes a clear penalty structure for non-compliance, with specific fines for each violation type:^[7][6]

Violation	Applicable Fine (RM)
Failure to appoint a Registered Energy Manager	≤50,000
Failure of REM to comply with statutory duties	≤20,000
Non-implementation of EnMS requirements	≤20,000
Non-submission of Energy Efficiency & Conservation Report	≤50,000
Failure to comply with energy audit requirements	≤50,000
Missing/non-compliant Energy Intensity Label	20,000-50,000
Unregistered operations as energy manager/auditor	≤50,000
Altering/falsifying energy efficiency certificates	≤50,000 + possible imprisonment

Additional Enforcement Mechanisms

Beyond monetary penalties, the Energy Commission may impose additional enforcement measures:^[7][4]

1. Mandatory Corrective Audits: Buildings failing compliance standards may be required to undergo audits at owner’s expense.
2. Operating License Suspension: For severe or repeated violations, operating licenses may be suspended or revoked.
3. Public Disclosure: Non-compliant entities may be named in Energy Commission reports, creating reputational consequences.
4. Product Recalls: Manufacturers or importers of non-compliant energy-using products may be required to remove products from the market.

Strategic Implementation: From Compliance to Competitive Advantage

Energy Audit Conditional Grant (EACG) Program

Anticipating compliance challenges, the Sustainable Energy Development Authority (SEDA) administers the Energy Audit Conditional Grant (EACG) under RMK-12 government funding to facilitate energy audits:

Grant Amount:

• Industrial sector: Up to RM 100,000 per site/account
• Commercial sector: Up to RM 60,000 per site/account

Eligibility Requirements:

• Minimum electricity consumption of 100,000 kWh/month
• Commitment to implement recommended energy saving measures within three years
• Regular reporting to SEDA and the Energy Management Information System (EMIS)

This proactive approach incentivizes early compliance while building capacity within organizations for sustainable energy management. For more information on the SEDA EACG 2.0 click here.

Key Financial Benefits:

• Operational cost reductions of 20-30% for comprehensive retrofits
• Enhanced property valuation (3-7% premium for green-certified buildings)
• Access to green financing with preferential interest rates (e.g., 0.5% rebates from CIMB for GBI-certified projects)

Beyond Compliance: Integration with Broader Sustainability Frameworks

Alignment with Bursa Malaysia Sustainability Reporting

EECA compliance dovetails with Bursa Malaysia’s mandatory sustainability reporting requirements for listed companies, which include:^[5][2]

1. Energy Management Disclosure: Documentation of energy consumption, efficiency initiatives, and performance metrics.
2. Multi-Year Performance Tracking: Three-year rolling basis reporting of sustainability performance targets.
3. TCFD-Aligned Reporting: Climate-related financial disclosures based on Task Force on Climate-related Financial Disclosures recommendations.
4. Independent Assurance: Review of sustainability statements by internal auditors or independent providers.

By establishing robust energy management systems for EECA compliance, organizations simultaneously build the foundation for effective sustainability reporting.

Industry-Specific Implementation Considerations

Different commercial building types face unique implementation challenges and opportunities:

1. Large Office REITs and Facility Management Companies:

• Challenge: Complex multi-tenant structures with split incentives between owners and occupants
• Strategy: Green lease structures, tenant engagement programs, and shared savings models

2. Manufacturing Facilities with Office Components:

• Challenge: Integrated energy systems spanning both production and administrative spaces
• Strategy: Sub-metering to disaggregate consumption, targeted efficiency measures by space type

3. Public Listed Companies (PLCs):

• Challenge: Enhanced scrutiny from investors and regulators on energy performance
• Strategy: Integrated reporting frameworks linking energy efficiency to financial performance and ESG metrics

Future Outlook: Evolving Standards and Market Transformation

Anticipated Regulatory Evolution

As Malaysia’s energy efficiency landscape matures, regulated entities should prepare for potential developments:

1. Expanding Scope: Gradual extension of requirements to smaller commercial buildings (below current 8,000 m² threshold)
2. Tightening Standards: Periodic revisions of the BEI thresholds and star rating classifications to drive continuous improvement
3. Carbon Pricing Integration: Potential linkage between energy efficiency performance and future carbon pricing mechanisms

Market Transformation Projections

EECA 2024 is poised to catalyze substantial market shifts in Malaysia’s commercial building sector:

1. Professional Services Growth: Expanding demand for Registered Energy Managers and Auditors, creating new career pathways in sustainability
2. Technology Adoption Acceleration: Rapid uptake of energy management systems, building automation, and IoT solutions
3. Green Financing Expansion: Increased availability of preferential financial products for efficiency investments, including green bonds and sustainability-linked loans
4. Valuation Premium Evolution: Growing differential between energy-efficient and conventional properties in terms of market value, occupancy rates, and tenant attraction

Conclusion: Strategic Imperative for Commercial Buildings

The Energy Efficiency and Conservation Act 2024 fundamentally alters Malaysia’s built environment landscape, transforming energy efficiency from an optional sustainability initiative into a mandatory compliance obligation with significant financial implications. For commercial building owners, managers, and occupants, this legislative shift demands a comprehensive response spanning governance, operations, and capital planning.

Forward-thinking organizations will recognize that EECA compliance represents not merely a regulatory hurdle but a strategic opportunity to enhance asset value, reduce operational costs, mitigate environmental impact, and align with evolving stakeholder expectations. By implementing robust energy management systems, leveraging available incentives, and adopting innovative technologies, commercial buildings can transcend basic compliance to achieve genuine competitive advantage in an increasingly energy-conscious marketplace.

As Malaysia advances toward its 2050 carbon neutrality goal, the commercial building sector’s transformation under EECA 2024 will serve as a critical enabler of national sustainability ambitions while demonstrating the economic viability of the low-carbon transition.

Innovast: Empowering Energy Efficiency and Sustainability

At Innovast, we specialize in transforming energy management challenges into opportunities for growth and sustainability. As a leading energy solutions provider in Malaysia, we offer cutting-edge technologies, including IoT-driven energy monitoring, AI-powered analytics, and cloud-based energy management systems. Our expertise in EECA 2024 compliance ensures that businesses not only meet regulatory requirements but also unlock significant cost savings and operational efficiencies.

With a commitment to driving sustainability, Innovast partners with organizations to achieve their energy goals while contributing to Malaysia’s carbon neutrality targets. Whether you’re navigating the complexities of energy audits, implementing an EnMS, or exploring renewable energy integration, Innovast is your trusted partner for a smarter, greener future.

Contact us today to learn how we can help your business thrive in the era of energy efficiency. Visit Innovast or call us at +60 12 355 6214.

1. https://www.st.gov.my/contents/2024/EECA/BI – Energy Efficiency and Conservation Act 2024 – Act 861.pdf
2. https://dnh.com.my/introduction-of-the-energy-efficiency-and-conservation-act/     
3. https://www.linkedin.com/pulse/preparing-eeca-2024-compliance-part-1-what-your-should-saad-4wigc 
4. https://www.tnb.com.my/assets/newsclip/17012025b.pdf     
5. https://my.bursamalaysia.com/learn/bursa-sustain/explorer/sustainability-reporting-framework-resources
6. https://optimalsystems.my/article/prepare-your-company-for-the-energy-efficiency-and-conservation-act-eeca-2024-part2/  
7. https://www.st.gov.my/eng/web/faqs/listing/26  
8. https://www.rdslawpartners.com/post/the-energy-efficiency-and-conservation-act-2024-transforming-malaysia-s-energy-landscape
9. https://www.st.gov.my/contents/2025/EECA/05-20250404 GUIDELINES ON ASCERTAINING BUILDING EIP OF THE BUILDING.pdf 
10. https://www.linkedin.com/pulse/part-2-how-implement-energy-management-system-enms-eeca-saad-8wswc
11.  https://innovast.asia/