The introduction of electric vehicles to the transportation fleet has merged the power generation and transportation sectors into an integrated system. Rather than fuel sources, electricity is used to charge electric vehicles, so these vehicles play a vital role as an important green technology that could reduce carbon emissions in the transportation sector. This study aimed to extent carbon emission pinch analysis for an integrated system to optimise the energy mix for electricity generation in Malaysia. In the first stage, the minimum number of electric vehicles required to reduce transportation emissions was determined. In the second stage, the optimal energy mix for the power generation sector was determined while including the electricity demand for the electric vehicle. Four scenarios namely S1, S2, S3, and S3 were developed based on Peninsular Malaysia as a case study, to analyse the impact of different mitigation strategies based on the performance of the integrated system (number of vehicles, fuel consumption, and energy mix) and economic evaluation based on total cost and total cost per emission reduction. The emission reduction is based on the 45 % target based on 2005 level for the transportation and power generation sector. The results reveal that S1 has the lowest total cost (MYR 1.73x1012) and S4 has the highest total cost (MYR 3.13x1012) compared to other scenarios proposed. However, in term of total cost per emission reduction, S4 shows the lowest (MYR 9.36x106) while S1 being the highest with MYR 13.1x106. The results generated from the scenarios proposed give a clear visualisation on how the policies affect the demand growth. Pinch analysis technique is proven to be a suitable tool in targeting and planning for emission reduction target and energy demand management.