Asia needs to achieve net zero before the world can do so, according to the CEO of Malaysia’s state-owned oil and gas company Petronas.
“The bulk of the emissions [that] are expected to emit will be produced in Asia going forward,” Tengku Muhammad Taufik told CNBC’s JP Ong Tuesday on the sidelines of the Energy Asia in Kuala Lumpur, Malaysia.
“The world cannot achieve net zero without Asia achieving net zero,” Taufik pointed out during the opening address of summit. Asia will represent half of global GDP by 2040, as well as 40% of global consumption, he added.
The energy transition goals embodied in the Paris Agreement cannot be undertaken by “one industry, or one set of policymakers, or one country alone,” he said during the keynote speech.
The world’s governments agreed in the 2015 Paris climate accord to limit global heating to well below 2°C, compared to pre-industrial levels, and pursue efforts to limit the temperature rise to 1.5°C.
According to a March report by the International Energy Agency, emissions from Asia’s developing economies and emerging markets grew more than other regions in 2022, up by 4.2%. More than half of this increase is attributed to coal-fired power generation.
An idealist’s narrative?
Seeking to clamp down on the use of fossil fuels, or completely abandon it, may not necessarily be the way forward, Taufik said, adding that complete decarbonization overnight is an idealist’s narrative.
Including fossil fuels as part of the energy base, at least for the first half of the century, is needed if the world wants to move away from energy supply shocks, he said.
“Unfortunately, the narrative to date has been driven by idealists. Extremists who believe there’s a binary switch that overnight we can turn from System A to System B,” he said, referring to System A as the inherent fossil fuel backed economy, and System B as decarbonizing to zero carbon overnight.
The world has not thought about the full ecosystem that comes with implementing System B, such as the minerals and metals requirements and supply chain issues that need to be resolved first, Taufik added.
“Yet we seek to abandon fossil fuels in an extreme fashion without allowing the industry to deal with inherent emissions challenge,” he said.
According to a separate world energy outlook report by the International Energy Agency, the world remains highly reliant on the use of fossil fuels such as oil, natural gas and coal.
“The share of fossil fuels in the global energy mix has been stubbornly high, at around 80%, for decades,” the report stated. In a scenario-based forecast hinging on current policy settings, the fossil fuel mix would fall to just below 75% in 2030, and above 60% in 2050.
“We’ve always positioned natural gas as a transition fuel,” the Petronas chief said, noting that recent debates have considered views that gas could even be a destination fuel because it offers a baseload of security and certainty, especially when renewables have yet to overcome intermittency issues.