BY PROF DATO DR AHMAD IBRAHIM
THE climate crisis has made the transition away from fossil fuels a global priority. Malaysia will soon unveil its own Energy Transition Roadmap, ETR.
Together with the hydrogen blueprint, expected out soon, the country is also embarking on the journey of change. The pace of transition may vary, but a shift towards cleaner energy is inevitable.
As countries experience the negative impacts of climate change, more are committed to reducing greenhouse gas emissions. The improved renewable energy cost is a big help in the push. The cost of solar and wind is now more competitive against fossil fuels.
Many have set targets, in line with international agreements like the Paris Agreement. Advances in renewable energy technologies, including storage and distribution have also improved the efficiency, reliability, and scalability of renewable energy sources, making integrating into the current system feasible[ihc-hide-content ihc_mb_type=”block” ihc_mb_who=”unreg” ihc_mb_template=”3″ ]
Concerns about air pollution, health impacts, and environmental degradation associated with fossil fuel use have led to increased demand by consumers for cleaner alternatives. While the transition away from fossil fuels is underway, challenges remain. These include the need for infrastructure investments, policy frameworks, and supportive regulatory environments. Additionally, the fossil fuel industry has significant economic and political influence, which can present obstacles to a rapid transition. Overall, the global momentum is picking up.
The transition away from fossil fuels is expected to continue, with renewable energy sources playing a vital role in the future energy mix. However, it will require concerted efforts from governments, businesses, and individuals to accelerate this transition and achieve a low-carbon and sustainable future.
The oil industry, like any other industry, faces challenges and opportunities in transitioning to renewable energy. While there may be hesitancy among some stakeholders within the oil industry, there are also significant efforts and investments made toward renewable energy.
The hesitancy to transition to renewables in the oil industry can be attributed to several factors. There are economic considerations. The oil industry is a well-established and highly profitable sector with significant infrastructure and investments in place.
Transitioning to renewables requires substantial financial investments, and there may be concerns about the profitability and economic viability of renewable energy projects.
Also, the oil industry has extensive infrastructure for the exploration, production, refining, and distribution of fossil fuels. Repurposing or replacing this infrastructure to accommodate renewable energy sources can be logistically challenging and costly.
This was recently shared during Energy Asia in Kuala Lumpur hosted by PETRONAS. The transition to renewables is no doubt a complex process that involves changes in technology, regulations, and market dynamics. The pace of this transition varies across countries and regions, and the uncertainty surrounding the speed and scale of the transition can create hesitancy among oil industry stakeholders.
The oil industry operates within a framework of policies and regulations that have been historically centered around fossil fuel production and consumption. Shifting towards renewable energy requires supportive policies, incentives, and regulatory frameworks that may not always be in place or may be subject to change.
However, it is important to recognise that many oil companies are actively investing in and diversifying into renewable energy sources. Our own PETRONAS is also initiating projects toward renewables and carbon capture.
A good example is their recent interest in algae. Some oil companies are investing by acquiring renewable energy companies or diversifying their portfolio to include renewable energy assets. Many oil companies recognise the need to adapt their business models to the changing energy landscape. Overall, while there may be some hesitancy within the oil industry, there is also a recognition of the need to embrace renewable energy.
The transition will likely be a gradual process, driven by a combination of economic, technological, regulatory, and market forces. Collaboration between the oil industry, governments, and other stakeholders is crucial to facilitate a smooth and successful transition to renewables.
Despite the many challenges, the global commitment to transition remains strong. Many predict the world energy business is destined for change. The automotive industry which is a big gobbler of fossil fuel is fast changing to electric. So are air travel and marine transport. The impact on fossil fuel demand will be massive, putting world oil prices at risk of slumping. Many agree there is no turning back away from fossils.
NOTE: The author is an Exco Member of Tan Sri Omar Centre for STI Policy, Advisory Board at UCSI University.[/ihc-hide-content]
