EECA 2024 Business Guide

 

The Ultimate Guide to the EECA 2024: What Every Malaysian Business Needs to Know

Estimated Reading Time: 12 minutes

Key Takeaways:

●      The Energy Efficiency and Conservation Act (EECA) 2024 mandates compliance for businesses consuming 21,600 gigajoules (GJ) or more annually.

●      Appointing a Registered Energy Manager (REM) is the first and most critical step towards compliance.

●      The REM is responsible for implementing an Energy Management System (EnMS), monitoring consumption, and preparing mandatory reports for the Energy Commission.

●      The decision to hire an in-house vs. an outsourced REM is a major strategic choice with significant impacts on cost, control, and expertise.

Summary Box

●      What is it? The EECA 2024 is a new law requiring large energy users in Malaysia to actively manage and report their energy consumption.

●      Who is affected? Any business consuming 21,600 GJ or more over 12 consecutive months. This includes electricity, natural gas, and other sources.

●      What's the first step? An affected business must appoint a government-certified Registered Energy Manager (REM) to oversee its compliance.

●      What does the REM do? They collect data, implement an energy management system, identify savings opportunities, and submit official reports to the Energy Commission on the business's behalf.

●      What's the biggest decision? A business needs to choose between hiring a full-time in-house REM or outsourcing the role to a specialist firm, each with distinct pros and cons.

The EECA is Here: Is Your Business on the Hook?

A new law, the Energy Efficiency and Conservation Act (EECA) 2024, is now in effect, bringing a new layer of complex regulatory obligations for Malaysian businesses. The core trigger is specific: if a business's total energy consumption across all sources—electricity, natural gas, etc.—exceeds 21,600 gigajoules (GJ) in any 12-month period, it is now legally designated an "energy consumer" and must comply. Many businesses are unaware of this threshold or how to calculate their consumption, placing them at immediate risk of non-compliance.

Ignoring this is not an option. Non-compliance comes with significant penalties. The challenge is navigating the Act's detailed requirements: establishing a formal Energy Management System (EnMS), conducting audits, continuous monitoring, and submitting mandatory Energy Efficiency & Conservation (EE&C) reports to the Energy Commission. For a busy manager, this feels like a mountain of technical, time-consuming work with a steep learning curve and high stakes. Where does one even begin?

This guide cuts through the noise and demystifies the entire process. It provides a clear, actionable roadmap to full EECA compliance, starting with the single most important first step a business must take: Appointing Your Registered Energy Manager (REM): A Step-by-Step Guide for EECA Compliance. This one decision is the foundation of an entire energy management strategy.

Appointing Your Registered Energy Manager (REM): A Step-by-Step Guide for EECA Compliance

The EECA law says every large energy user must have a Registered Energy Manager, or REM. This person is the designated expert guide to saving energy and following the new rules. Think of them as a compliance officer for everything related to energy. Here is a simple guide to appointing one.

●      Step 1: Know the Two Types of REMs The government has created two levels of REMs. It is good to know the difference.

○      REM First Type: This is the standard, fully qualified REM. They have the right degree and work experience and have passed the required training. They are certified to manage a company's compliance.

○      REM Second Type: This is a more experienced REM. To get this certification, a person must first be a REM First Type for at least one year and then complete extra, more advanced training. They may offer more strategic advice.

●      Step 2: Check Their Qualifications Not just anyone can be a REM. When looking for a candidate, it is important to ensure they have the right credentials, as the Energy Commission is very specific.

○      They must be a Malaysian citizen.

○      They need a degree or diploma in a technical field like engineering, science, or technology from a recognized university.

○      They must have real-world work experience—at least two years for degree holders and ten years for diploma holders.

○      They might also be a registered Professional Engineer, Technologist, or Architect.

●      Step 3: Confirm Their Certificate is Real and Valid This is the most important check. A real REM is registered with the Energy Commission and has a valid practising certificate.

○      Ask to see their "Certificate of Registration" and their "Practising Certificate". The practising certificate must be renewed every one to three years, so it is crucial to check the expiry date.

○      Their status can be verified on the Energy Commission's official online portal, iRIST.

●      Step 4: Make the Formal Appointment Once a suitable REM has been chosen, they must be formally appointed. This person will then be responsible for all the duties listed in the EECA guidelines, which are covered in the next section.

The REM's Mandate: A Practical Checklist of Responsibilities

The Registered Energy Manager is not merely a title; it is a central role responsible for driving a company's entire energy compliance and efficiency strategy. Their duties, as outlined by the Energy Commission, are comprehensive, turning them into a hub for data analysis, system implementation, and strategic advice. The EE&C report serves as the ultimate accountability tool, and the REM's responsibilities are structured to ensure this report is accurate and complete. The following checklist translates the official guidelines into a practical job description.

Table 1: Practical Checklist of REM Responsibilities

Responsibility Area	Key Tasks & Duties (Based on EECA Guidelines)
1. Data Management & Analysis	• Collect & Analyze Historical Data: Gather and analyze at least 12 consecutive months of energy consumption data before appointment to establish a baseline. • Continuous Monitoring: Continuously collect and analyze all energy data (electricity, gas, etc.) during their appointment. • Data Verification: Ensure accuracy by comparing reported data with actual utility bills, invoices, and maintenance records. • Collect Operational Data: Gather production data (for industry) or other key variables like occupancy, operating hours, and cooling degree days that affect energy use.
2. Energy Management System (EnMS) Implementation	• Form the Committee: Assist in establishing a multi-disciplinary Energy Management Committee with representatives from finance, HR, operations, etc.. • Develop the Policy: Help prepare and get top management approval for a formal Energy Management Policy. • Set Goals & Targets: Propose clear energy-saving objectives, targets, and appropriate Energy Efficiency Indicators (EEIs) to the committee. • Develop the Action Plan: Create a detailed action plan to achieve the energy targets, including specific Energy Saving Measures (ESMs).
3. EnMS Monitoring & Review	• Chair Meetings: Arrange and record minutes for Energy Management Committee meetings (at least 4 times a year) and Management Review meetings (at least once a year). • Track Progress: Monitor the execution of the EnMS implementation plan, tracking progress against timelines and targets. • Verify Savings: Implement Measurement and Verification (M&V) plans to accurately quantify and report the energy and cost savings from implemented ESMs.
4. Reporting & Compliance	• Prepare the EE&C Report: Prepare the comprehensive Energy Efficiency & Conservation (EE&C) report for the energy consumer, following the exact format specified by the Energy Commission. • Ensure Report Accuracy: Take final responsibility for the accuracy of all information submitted in the EE&C report. • Submit to Management: Submit the completed report to the energy consumer's management for verification and final submission to the Commission.
5. Strategic Advisory	• Advise on Energy Saving Measures (ESMs): Use the energy audit report prepared by a Registered Energy Auditor (REA) to advise the company on implementing no-cost, low-cost, and high-cost ESMs. • Propose Resources: Advise management on the human and financial resources needed to achieve energy targets. • Promote Awareness: Develop and run campaigns to raise energy awareness and build a culture of conservation among all staff.

The Critical Decision: Hiring an In-House vs. Outsourcing Your REM

Once a business understands the necessity and responsibilities of a REM, the next critical step is deciding on the appointment model. This is not just a hiring decision but a strategic one that will shape the company's approach to energy management, cost structure, and access to expertise. The two primary models are appointing a full-time in-house employee or outsourcing the function to a specialized Energy Service Company (ESCO).

A pivotal factor influencing this decision is a rule stipulated by the Energy Commission: a single Registered Energy Manager, whether in-house or outsourced, is permitted to serve a maximum of eight (8) premises. This rule has profound implications. For a large corporation with, for example, ten qualifying factories, a single in-house REM is insufficient for compliance. This immediately forces the company to consider a multi-REM strategy, making outsourced providers who employ a team of REMs a structurally efficient and often necessary option. For an outsourced provider, this rule defines their capacity and business model, ensuring they can dedicate adequate attention to each client without being overextended.

The following analysis provides a detailed comparison to help businesses make an informed choice.

Table 2: In-House vs. Outsourced REM — A Strategic Comparison

Factor	In-House REM	Outsourced REM
Cost Structure	High Fixed Cost: This model involves a significant long-term investment. It includes a full-time salary (which can be substantial, with median pay for HR managers, a comparable professional role, exceeding RM126,000 annually), plus benefits, insurance, mandatory training for Continuous Development Program (CDP) points, and other overheads.	Variable/Subscription Cost: The business pays a retainer or a project-based fee, which is often lower than a full-time salary. This model avoids overheads like benefits, recruitment costs, and ongoing training. It can be particularly cost-effective for businesses whose needs may fluctuate or for those who want to avoid a large, fixed payroll expense.
Access to Expertise	Limited Expertise: The company's expertise is confined to the knowledge and experience of one individual. While this person may be highly competent, they may lack specialization in niche areas relevant to the business, such as unique industrial processes, advanced data analytics for energy modeling, or the latest in renewable energy technology.	Broad Expertise: Outsourcing provides access to a team of specialists. An established ESCO likely has a deep bench of talent with experience across various industries, technologies, and the latest regulatory updates. They bring a wealth of best practices and data-driven insights gathered from multiple clients, offering a more robust knowledge base.
Control & Oversight	Maximum Control: Management has direct, daily oversight of the REM's tasks, priorities, and methods. The REM is fully dedicated to the company's objectives and can be supervised closely, ensuring their work is perfectly aligned with internal goals. Communication is immediate and streamlined.	Less Direct Control: Day-to-day execution is managed by the external provider. Control is exercised through formal mechanisms like Service Level Agreements (SLAs) and regular reporting. This can lead to a perceived loss of control, and communication may be less immediate, potentially involving coordination across different schedules.
Cultural Integration	High Integration: An in-house REM becomes part of the company culture. They understand the internal politics, build long-term relationships with key personnel in operations and finance, and can champion energy initiatives from within. This deep integration fosters better buy-in and facilitates the behavioral change needed for a successful energy conservation program.	Low Integration: An external party may not fully grasp the company's unique internal dynamics, communication styles, or unwritten rules. This can make it more challenging to implement initiatives that require widespread employee participation and behavioral change, such as awareness campaigns or new operational procedures.
Scalability & Flexibility	Low Flexibility: This model is relatively rigid. If the company acquires more facilities and needs additional REM support, it must go through the entire recruitment and hiring process again. Conversely, if needs decrease, the company is still committed to a fixed salary and full-time position.	High Flexibility: An outsourced model allows a business to easily scale services up or down based on project needs or changing business conditions. This is ideal for handling short-term, intensive projects (like a major retrofit) or for businesses with fluctuating operational demands. The provider can assign more experts as needed without a long-term commitment from the client.
Administrative Burden	High Burden: The company's HR and finance departments are responsible for the entire employee lifecycle: recruitment, onboarding, payroll, performance reviews, and ensuring the REM completes the required Continuous Development Program (CDP) hours to maintain their practising certificate.	Low Burden: The outsourcing provider handles all HR functions, including payroll, benefits, and professional development for their staff. The client company manages a single vendor contract, significantly reducing its internal administrative workload and allowing HR to focus on core business functions.
Regulatory Compliance & Risk	Risk is Internal: The company bears the full responsibility and liability for the REM's performance and their knowledge of EECA regulations. If the REM makes an error or fails to stay current with legislative changes, the company is directly exposed to the risk of non-compliance and associated penalties.	Shared Risk: The outsourced provider is contractually obligated to stay current with all EECA regulations, reporting deadlines, and best practices. This mitigates a significant portion of the client's compliance risk, as the provider's reputation and business depend on their expertise and diligence in this area.
Holistic Service (REM + REA)	Separate Procurement: An in-house REM is responsible for managing compliance but is distinct from a Registered Energy Auditor (REA), who must be hired to conduct the mandatory energy audit. This means the company will need to go through a separate procurement process to find and engage a qualified REA.	Potential for Integrated Service: Many ESCOs are structured to offer a seamless, end-to-end service. They can provide the initial energy audit through their in-house or partner REAs and then use those findings to inform the energy management strategy executed by their REMs. This integration streamlines the entire process from audit to implementation and reporting, creating a more cohesive and efficient workflow.

Making the Right Choice for Your Business

The decision between hiring in-house and outsourcing is not one-size-fits-all. It depends on a company's specific context, resources, and strategic priorities.

●      Choose In-House if: The business is a very large, single-site energy consumer with highly complex and unique operational processes that require a deeply embedded, full-time expert. This model is suitable if the organization desires maximum control, wants to build long-term internal capacity for energy management, and has the financial resources to support a dedicated strategic role.

●      Choose Outsourced if: The business operates across multiple sites and needs to ensure compliance across several premises, making the "8 premises" rule a key factor. This model is ideal for companies that require access to a diverse and specialized pool of expertise without the high fixed cost and administrative burden of a full-time hire. It also allows internal teams to remain focused on their core business functions while leaving the complexities of energy compliance to dedicated professionals.

Your Next Step to EECA Compliance

The Energy Efficiency and Conservation Act 2024 is a new reality for Malaysian businesses. Compliance is not just a legal necessity but an opportunity for significant cost savings and improved sustainability. The Registered Energy Manager is the cornerstone of this entire effort, acting as a strategist, analyst, and compliance officer all in one. The choice between an in-house or outsourced REM is a critical one, but the most important decision is to act now.

Don't let regulatory complexity become a business risk. Getting expert guidance is the fastest way to ensure you are compliant, efficient, and ahead of the curve. Whether you need help understanding your consumption threshold, finding a qualified REM, or deciding on the best appointment model for your unique business needs, our specialists are here to provide clarity. For a no-obligation consultation on navigating the EECA and appointing the right REM for your business, WhatsApp or call 0133006384 to speak with a compliance specialist today.