ENERGY ASIA: Industry leaders call for pragmatic energy transition without sidelining fossil fuels

Energy transition pathways need to be pragmatic, allowing fossil fuels to continue supporting developing countries' economic and energy demand growth -- especially given the evident shortage of financial support from developed countries, Asian and Middle Eastern industry leaders said.

Recent geopolitical tensions have raised global concerns over energy security and potential energy supply shortages. Meanwhile, the recent climate policy about-turn in the US has left some of its previously committed financial support to developing countries in limbo.

Considering this reality, Asian and Middle Eastern industry leaders at the Energy Asia conference held in Kuala Lumpur, Malaysia, over June 16-18 highlighted that fossil fuels -- rather than being "phased out," as some developed countries have aggressively called for -- should coexist with renewables.

They emphasized that fossil fuels should be managed through realistic decarbonization approaches, such as adopting carbon capture and storage technologies.

OPEC's voice

"The Paris Agreement is definitely not about choosing this source of energy versus that source of energy, and that's why, at OPEC, we believe in an all-energies approach, because the world is going to grow phenomenally," OPEC Secretary General Haitham al-Ghais said at the conference.

He added that, although OPEC supports inclusive energy transition approaches, oil-producing countries have begun scaling up renewable adoption both domestically and abroad, as well as launching major CCS and carbon capture, utilization and storage projects.

"OPEC's 12 member countries' emissions are actually lower than [those of] one country in the G7," Ghais said, choosing not to name it.

"Saudi Arabia is aiming, by 2030, to have 50% of its electricity from renewable sources of energy, and that's far ahead of some of the European countries," he added.

China's philosophy

"I want to use the idea of Ren Zhengfei, the founder of [China's technology giant] Huawei. He put forward the philosophy of 'Managing in Grey.' [In the context of energy transition], managing in grey means trying to be in the middle -- not white, not black," said Lu Ruquan, president of the Economics & Technology Research Institute, the research arm of China's state-backed oil major CNPC.

Lu said that different countries have distinct advantages in energy supplies. China accounts for nearly 50% of the world's coal production, the Middle East holds about 50% of the world's oil and gas reserves and Southeast Asia is rich in both natural gas and renewable energy resources, he added.

Lu also emphasized the importance of adopting inclusive energy transition strategies.

"'Inclusive' means that, if you have the coal, okay, make full use of the coal. But it's coal plus CCS or CCUS [for decarbonization]. If you are going to use solar and wind, okay. Make full use of it and scale it up. And if you are rich in natural gas, okay, it may be natural gas plus hydrogen plus CCS or CCUS [for decarbonization]," he said.

Malaysia's concerns

Malaysian Prime Minister Anwar Ibrahim highlighted that the Association of Southeast Asian Nations region needs significantly more financial support from the global community to unlock its renewable energy potential.

"This is critical given that, in 2023, Southeast Asia attracted only 2% of global clean energy spending -- a stark contrast for a region endowed with immense potential in renewable electricity," he said.

"Wind in Vietnam, hydropower in Laos, solar in Malaysia and geothermal energy in Indonesia. ... We are not discounting these possibilities, which require enormous investments," he added.

Professor Dr. Mohd Faiz Abdullah, chairman and chief executive of the Institute of Strategic and International Studies, called for developed countries to provide adequate financial support to facilitate the energy transition in developing countries.

"Those with the capital and those with a lot of promises are yet to fulfill those promises," he said, adding that providing financial support is essential to achieving a successful global transition.

Japan's tangible solutions

Japan has been working with its Asian partner countries to develop tangible, balanced solutions that both scale up clean energy adoption and decarbonize emission-intensive fuel sources, said Shinichi Kihara, director general for international policy on carbon neutrality at the Ministry of Economy, Trade and Industry.

Kihara said that through a scheme called the Asia Zero Emission Community, Japan has enabled over 350 joint decarbonization projects in the region since 2023.

These projects cover a wide range of areas, such as renewable energy, energy efficiency improvements, power grid upgrades, LNG sector decarbonization, hydrogen, ammonia, CCS and zero-emission industrial parks.

He shared a "symbolic sample" of the collaboration between Japan's IHI and Gentari, a subsidiary of Petronas, to enable 100% ammonia combustion at gas-fired power plants.

"It will become the world's first zero-emission thermal power generation in commercial space," he said.