IEA's net-zero call to action raises concerns in Asia
The International Energy Agency's recommendations for reaching net zero emissions by 2050, are 'dizzyingly ambitious', according to Japan's MUFG
The International Energy Agency's calls for fossil fuel resources to remain unexploited in order to reach net-zero targets by 2050, has been rebuffed by some of the world's top oil consumers in Asia.
The Paris-based agency's roadmap to carbon neutrality calls for no new investment in fossil fuel supply projects and no further final investment decisions in new unabated coal plants, which uses the fuel without lowering its carbon impact.
However, for many of the world's fossil fuel-consuming economies in Asia, a rapid shift away from hydrocarbons comes in the way of industrialisation plans.
Japan, which pledged to go net-zero last year, is the fifth-largest consumer of crude and the world's fourth-largest importer of the fuel.
The country with the world's third largest economy "needs to protect its energy security including a stable supply of electricity, so we will balance this with our goal of becoming carbon neutral by 2050", Akihisa Matsuda, the deputy director of international affairs at Japan's Ministry of Economy, Trade and Industry (METI) told Reuters.
The report's suggestions to reach carbon neutrality "is not necessarily in line with the Japanese government's policy", he added.
The report also raised concerns in Australia, which continues to commit to coal and gas investments.
"The IEA report doesn't take into account future negative emission technologies and offsets from outside the energy sector – two things that are likely to happen and will allow vital and necessary future development of oil and gas fields," Australian Petroleum Production and Exploration Association chief executive Andrew McConville told the agency.
The IEA report comes as developed nations such as the US, turn their backs on fossil fuels.
The US has frozen new exploration activities on federal lands and has rejoined the Paris Agreement, which seeks to limit emissions to below 2°C above pre-industrial levels. It also plans to halve emissions from 2005 levels by 2030.
A number of countries adopted positions on carbon neutrality last year after movement restrictions to curb the spread of the Covid-19 pandemic led to a record fall in carbon emissions.
The IEA's recommendations for reaching net zero emissions by 2050, are "dizzyingly ambitious", Ehsan Khoman, director, head of emerging markets research - Emea at Japan's MUFG Bank said on Thursday.
The direct implications of the IEA's call to halt upstream projects is a shrinking of global oil supplies by more than 8 per cent annually.
"The IEA’s recommendations may prove challenging to transpire at the speed and magnitude as it’s NZE [net zero emissions] trajectory necessitates, and instead could be designed to provide clarity around the practicalities of increased climate ambition," Mr Khoman said.
However, others such as Joeri Rogelj, director of research, Grantham Institute, Imperial College London said that the IEA's roadmap is not the most ambitious.
Its call to action on reaching net-zero targets is, however, far from being the most conservative and is more than a token effort, he added.
Published: May 20, 2021 03:43 PM