Environmental impact of alternative fuel mix in electricity generation in Malaysia

The Fuel Diversification Strategy was incorporated into the Malaysian National Energy Policy in order to achieve a more balanced consumption of fuel, namely gas, hydro, coal and petroleum. The objective of this paper is to evaluate changes in CO2, SO2 and NOx emission due to changes in the fuel mix specified in the Fuel Diversification Strategy. Using the environmental extended Leontief's input–output framework it was found that the fuel mix as envisioned by the Fuel Diversification Strategy generates higher CO2, SO2 and NOx emissions. As such, to ensure a sustainable energy policy, the proposed fuel mix must be accompanied by efficiency gain so that the negative impact on the environment could be mitigated.