Don’t be distracted by unrealistic net zero by 2050 goal, says energy strategist

Tuesday 19 Nov 2024

KUALA LUMPUR (June 26): Nations should not fixate on their 2050 net zero targets and instead should be looking to what carbon emission mitigation they can afford and achieve by 2030, according to S&P Global Commodity Insights senior vice president and chief energy strategist Atul Arya.

At the Energy Asia 2023 conference on Monday (June 26), Arya said the idea of achieving net zero emissions by 2050 is “unrealistic and infeasible” and should not be involved in energy transition discussions primarily due to rising emissions in Asia.

“Asia is going to grow, it's going to need more energy at least for the rest of this decade. The majority of the countries here (in Asia) will see an increase in emissions — maybe a plateau in some — and that is not a bad thing, that's the reality of economic growth,” he said.

Arya said that instead of being "confused and distracted" by net zero emissions targets, countries need to focus their efforts on doing what they can afford in terms of shifting to lower or mitigate their carbon emissions.

“For the developed world, the focus should be on shifting to lower carbon fuels — which they are already doing in Europe and the US, moving from coal to gas, and gas to renewables — that is something they can do and afford," he said.

Meanwhile, for developing countries, Arya said they should focus on growing their economies with the least amount of emissions from the energy they can afford.

He said a shift to gas from coal would be a step towards the right direction for developing countries, and also noted there are also a lot of low-hanging fruit surrounding energy efficiency.

S&P Global Commodity Insights energy transitions & CleanTech consulting executive director Gauri Jauhar noted that coal is intrinsically linked to energy poverty and still has a position in Asia, given the region's broad range of economies — with gross domestic product (GDP) per capita ranging from US$2,000 (RM8,362) to US$90,000.

“Often these budgets of [lower income] countries get stressed by subsidies, and the power sector in most countries are heavily regulated as its closest to the electorate,” she noted.

Jauhar said that from 1990 until 2023, coal capacity build-up in Asia has seen a 15-fold rise, while in the past three years, coal capacity and solar capacity build-up in the region is almost neck-to-neck.

“From a sustainability perspective, how can active financing lead to the phase down of coal, and how can that phase down be managed?” she posed.

Meanwhile, on gas, S&P Global chief strategist global gas Michael Stoppard underlined the hydrocarbon serves a critical role in the energy transition conversation thanks to three criteria, namely: low carbon, low smog and a vector to a zero carbon future.

“Investing into natural gas infrastructure is really setting up an infrastructure for a future zero carbon molecule system, in that way natural gas is a bridge to the future,” he said.

However, Stoppard pointed out the fragility of the gas market, citing the impact of the recent European energy crisis due to Russia cutting off its pipelines.

Stoppard said that during the crisis, liquefied natural gas (LNG) was diverted to European markets which resulted in blackouts in South Asia.

This shows that LNG will be diverted to higher-paying markets and put strain and stress on the entire system, according to Stoppard.

Edited BySurin Murugiah

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