Singapore’s state-owned investment firm Temasek Holdings Pte Ltd is likely to miss its 2030 carbon emissions target largely because of exposure to the aviation and power generation sectors at a time when countries are prioritising energy security amid the war in the Middle East.
Seven years ago, Temasek set a target to halve net carbon emissions of its investment portfolio from 2010 levels by 2030, and achieve net zero by 2050.
According to Dilhan Pillay, Temasek’s chief executive officer, portfolio emissions have declined by around 30% since the goal was set in 2019.
“But our prognosis is that by 2030, our overall emissions may not improve to enable us to achieve our target due to two primary factors: exposure to aviation, and exposure to power generation,” he said at a dinner on May 18 held in conjunction with a green conference in the city state.
He acknowledged that aviation remains one of the hardest sectors to decarbonise, noting that sustainable jet fuel accounts for less than 1% of global supply and is two to five times more expensive than conventional jet fuel.
Meanwhile, nations are putting greater focus on energy security amid the war in Iran as the blockade of the Strait of Hormuz disrupts oil shipments and drives up costs.
“Countries are increasingly prioritising energy security, affordability, and grid stability alongside longer-term decarbonisation goals,” Pillay said.
He said that in order to sustain climate-related ambitions, the world must start addressing the “green premium”, a term used to describe the added cost of eco-friendly, zero-emission products or services over traditional carbon-emitting ones.
According to Pillay, green solutions must be “scalable, financeable and deployable within credible timeframes, especially in emerging markets where affordability matters most.
It also requires a fundamental shift in how the transition is financed”.
“Innovative financing structures are critical to better allocate risk and return across the capital stack,” he added.
