Asia should attain web zero earlier than the world can, says Petronas CEO

Petronas sign against the backdrop of the Twin Towers.

Goh Seng Chong | Bloomberg | Getty Images

According to the CEO of Malaysian state-owned oil and gas company Petronas, Asia must reach net zero before the world can.

“Most of the emissions [that] “The expected emissions will be produced in Asia going forward,” Tengku Muhammad Taufik told CNBC’s JP Ong Tuesday on the sidelines of Energy Asia in Kuala Lumpur, Malaysia.

“The world cannot reach net zero without Asia reaching net zero,” Taufik said during the summit’s opening remarks. Asia will account for half of global GDP and 40% of global consumption by 2040, he added.

The energy transition goals enshrined in the Paris Agreement cannot be achieved by “one industry, one group of policymakers or one country alone,” he said during the keynote address.

In the 2015 Paris Climate Agreement, world governments agreed to limit global warming to well below 2°C compared to pre-industrial levels and to make efforts to limit temperature increases to 1.5°C.

According to a March report by the International Energy Agency, emissions from developing and emerging Asia grew faster than other regions in 2022, by 4.2%. More than half of this increase is due to coal-fired power generation.

The tale of an idealist?

Attempting to limit or eliminate fossil fuel use may not necessarily be the way forward, Taufik said, adding that full decarbonization overnight is an idealistic narrative.

Incorporating fossil fuels as part of the energy base, at least in the first half of the century, is necessary if the world is to avoid energy supply shocks, he said.

“Unfortunately, the narrative so far has been driven by idealists. Extremists who believe there is a binary switch that we can flip from System A to System B overnight,” he said, referring to System A as the inherent fossil-fuel driven economy and System B as decarbonization over Zero Carbon Night.

The world hasn’t 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.

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“Nevertheless, we are aiming for a radical phase-out of fossil fuels without the industry having to deal with the inherent emissions problems,” he said.

According to a separate World Energy Outlook report from the International Energy Agency, the world remains heavily dependent on the use of fossil fuels such as oil, natural gas and coal.

“The share of fossil fuels in the global energy mix has remained stubbornly high at around 80% for decades,” says the report. In a scenario-based forecast, which depends on the current political environment, the share of fossil fuels would fall to just under 75% in 2030 and to over 60% in 2050.

“We have always positioned natural gas as a transition fuel,” the Petronas chief said, noting that recent debates have also included views that gas might even be a target fuel because it offers a base load of safety and certainty, especially when the renewable energies have not yet overcome intermittent problems.

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