Sustainable transformation: making transition finance stick | FinanceAsia

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The Asia Pacific region is currently facing a significant gap in the race to fund decarbonisation – estimated at $US1.1 trillion by the International Monetary Fund (IMF).

However, this is not the only problem for a region whose coal-fired economies represent around half of global emissions, according to the International Energy Agency.

China alone accounts for 35% of global CO2 emissions, the agency says.

Speakers at the Sustainable Finance Asia Forum 2024 said that regulators will need to rebalance sustainable investment priorities – placing more emphasis on adaptation rather than mitigation – if the region’s most heavily polluting emerging economies are to meet their carbon zero targets.

Debanik Basu, the head of responsible investment and stewardship APAC at APG Asset Management, told a panel on harnessing transition finance for sustainable transformation that investment in mitigation (reducing greenhouse emissions at source) now represented the majority of transition funding.

He said the often more complicated task of climate adaptation – the need to change systems, behaviours and whole economies – was receiving scant attention.

“Currently the region is getting around $300 billion in transition finance so there’s a massive gap that needs to be addressed,” he told the conference. “Even within the small portion of finance that we are getting, more than 80 per cent of the funds are moving towards mitigation.

“Consensus estimates suggest that ideally it should be 50/50 between mitigation and adaptation.”

He said the other critical problem was that aspects of climate finance were not well understood and appreciated by the market overall, in particular within the agriculture and forestry segment.

“When you look at the NDCs (Nationally Determined Contribution) put out by a lot of countries, there are specific targets around climate change, but there aren’t explicit targets around forestry and agriculture,” he said.

“And even when there are targets, there is no clear roadmap. What all this means is that the institutional capacity is lacking. There are gaps in infrastructure and there are gaps in knowledge.

“As an investor, conversations with companies around biodiversity are at a very nascent stage.”

A question of taxonomies

Kristina Anguelova, senior advisor and consultant on green finance strategy APAC at the World Wildlife Fund, told the conference that regulation was moving in the right direction, guided by hubs such as Singapore and Hong Kong.

She added that the unofficial rivalry between Hong Kong and Singapore in terms of developing regulatory taxonomies was having a positive effect on the transition finance landscape in the region.

“I think the competition between Singapore and Hong Kong in this case is a good thing because it’s advancing regulation in the region quite a bit,” she said. “The Singapore Asia Taxonomy lays out transition taxonomy criteria across eight sectors.”

While the regulation is tailored to Singapore, she said she believed it would lay foundations for others to follow.

“It’s so important as a regulatory piece because it can serve as an incentive for investors to start to scale transition finance comfortably and confidently without the loopholes and the risks of potentially being accused of greenwashing,” she said.

In terms of biodiversity, she highlighted the nascent stage of biodiversity finance compared to climate finance, discussing the need for capacity building, regulatory clarity, and financial instruments to support nature-based solutions.

A case in point, she said, is the International Sustainability Standards Board (ISSB) which is developing standards aimed at developing a high-quality, comprehensive global baseline of sustainability disclosures focussed on the needs of investors and the financial markets.

“On biodiversity, I think we’re moving a bit slowly, but we’re getting there. Obviously coming from a science-based NGO, efforts can never be fast enough,” she said. “But the good news is that the ISSB will also be integrating the TNFD or the Task Force for Nature-related Financial Disclosures soon.

“Those jurisdictions that have adopted or committed to the ISSB will also be adopting those nature regulations.”

The challenge as always, she added, was that regulators had to strike a balance between mitigating financial risk and overregulating such that it slowed economic development.

Blended solutions

Building capacity, both speakers argued, would be critical to transition finance solutions to climate change and that new instruments, particularly in blended finance, were likely to be leading the charge.

“We are seeing beyond transition bonds to different types of instruments that are designed to go into blended finance structures such as transition credits which are based on the assumption that we can get carbon savings out of early retirement of coal-fired power plants,” Anguelova said.

One avenue that was currently being explored in a number of jurisdictions was concessionary capital: i.e. loans, grants, or equity investments provided on more favourable terms than those available in the market.

These terms could include lower interest rates, longer repayment periods, grace periods, or partial guarantees.

Of these instruments, Basu said, guarantees were evolving as one of the methods currently being pursued in several markets.

“What we are also seeing is that, apart from concessionary capital, a lot of public institutions are more comfortable with providing guarantees instead of direct capital because that then keeps the overall cost of capital down,” Basu said.

“It might be at a very nascent stage – and it is difficult to say if this is going to be the future – but it is developing,” he said.


¬ Haymarket Media Limited. All rights reserved.

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Commentary: The world’s climate leaders need better data amid sweltering heat

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NEW DELHI: It is understandable that global warming is currently altering how we live.

In India’s money, New Delhi, this summer has been so warm- above 40 degrees Celsius yet at evening- that people are gasping, the tap water is scalding, and the walls of their homes emit heat like radiators.

According to the Saudi Arabian government, 1,300 travellers have now died during the Hajj this year. Due to exhaustion, people at the European football tournaments are collapsing.

IDENTIFICATION OF THE COST OF Culture CHANGE

And still economists are at the center of a new debate about the actual costs of climate change, which are clearly able to keep their cool when everyone else loses theirs. According to a fresh working paper from two academic departments at Harvard and Northwestern, which was published by the National Bureau of Economic Research, the economic damage caused by climate change could be as little as six times higher than previously thought.

Their design predicts that a second degree increase in global mean temperature causes a gradual decline in global GDP that tops at 12 % after six years and does not entirely recover even ten years after the shock.

They argue that this makes punitive weather change worthwhile for nations like the US, and that the argument may also apply to nations that are poorer but significantly more vulnerable to climate change, like India. Is it possible to include a few more nations around?

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China and European Union to hold talks on electric car tariffs

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After both sides agreed to negotiate a designed line of trade taxes, the risk of rising Foreign electric car prices in the EU may be reduced.

Although there are still issues with the tariffs, top officials from both regions agreed to continue to explore them on a Saturday contact.

The call marks the first time the two sides have agreed to negotiate since the EU threatened China with electric vehicle (EV) tariffs of up to 38%.

According to the EU, the government of China provided unfair subsidies for EVs. In response, China accused the Union of isolationism and business rule intrusions.

Trade Commissioner Valdis Dombrovskis and Wang Wentao, who is also a Taiwanese counterpart, were contacted by an EU official who described the conversation as” truthful and constructive.”

They stated that” all levels of dialogue will be maintained by the two sides in the upcoming days.”

The director also rebuffed the EU’s antagonism to China’s EV industry’s funding strategy.

They said “any negotiated result” to the proposed taxes may address the “injurious subsidisation” of Taiwanese EVs.

On Saturday, China made a similar speech and stated that it still disagreed with the EU.

Mr. Wentao met with German Vice-Chancellor Robert Habeck on Saturday in addition to its contact with the EU.

In a Facebook post about the meeting, China’s Ministry of Commerce said it had told Mr Habeck about its “firm opposition” to the tariffs.

To “firmly defend its legitimate rights and interests,” it reiterated its threat to file a lawsuit with the World Trade Organization ( WTO ).

The taxes have also received condemnation from Germany.

When the EU first proposed them last week following its investigation of Chinese EVs in the trading bloc, Germany’s Transport Minister, Volker Wissing, said the move risked a” trade war” with Beijing.

” The European Commission’s punitive taxes hit European firms and their best materials”, he wrote on X, previously known as Twitter, at the time.

The automotive sector in Europe has also been crucial.

Stellantis- which owns Citroën, Peugeot, Vauxhall, Fiat, and several other companies- said it did not support actions that” contribute to the world fragmentation]of business ]”.

The proposed charges range from 17.4 % to 38.1 %, depending on the brand and how much they negotiated with the EU’s investigation.

They may be added to the 10 % level currently in place for all Chinese electric cars.

The EU’s intervention comes after the US made the much bolder move of raising its tariff on Chinese electric cars from 25% to 100% last month.

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PAP to set up climate action, mental health groups to address issues that ‘cut across’ demographics: PM Wong

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Best Contact, KEEPING DOORS OPEN

Mr. Wong added that the PAP will also aim to improve communication with Singaporeans in addition to engaging the community on a wider range of issues. &nbsp,

He said that as a political party, the PAP needs to have productive communication channels, and” we must accomplish better”. &nbsp,

” Clearly, people think we can do better in contacts”, he said. &nbsp,

Some connections must be made face-to-face, such as through routine walkabouts. &nbsp,

” This has been the group’s conventional way of mentoring and conversation, and we must proceed with this and keep this strength”, he added. &nbsp,

But more needs to be done over electric streams, to intensify reach, he said. The group has updated our existing programmes like Facebook and Instagram, as well as launching fresh programs like YouTube, TikTok and WhatsApp. &nbsp,

The group email, Petir, has also been updated so it can be accessed through online means, and not just printed.

” Through these efforts, I hope Singaporeans get a better understanding of the PAP, as well as our officials and MPs, what they stand for, what we stand for, and why we do what we do for Singaporeans”, he said. &nbsp,

He added that he also wants to hear how the group you better serve Singaporeans from them directly. &nbsp,

” I, too, will try to do more and do it much”, he said.

To that end, he pledged to satisfy the advertising more often to describe certain policies, make use of more social media platforms, and perform more visits on the ground.

Additionally, Mr. Wong added that the PAP will continue to be accessible to those who want to meet. &nbsp,

Beyond the group protesters ‘ core group, there is a more extensive network known as the Friends of PAP system. &nbsp,

” We want to increase this system of PAP buddies and partners”, he said. ” Whether you are a corporate organisation, a social service organisation, or as an individual, if you have new ideas, or just want to lend a hand … we welcome you to join us” .&nbsp,

Mr. Wong added that the political climate in Singapore is evolving, and he does not believe that the PAP may formally form the new state. &nbsp,

” But for now we are the state of the day”, he said.

It is therefore our job as a celebration to map out how we can advance Singapore, how we can build a strong partnership with Singaporeans, and how to persuade them that PAP is the right person to lead this nation.

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Australia wants to become a renewable energy superpower. Can it?

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1 minute ago

Hannah Ritchie,BBC News, Sydney

BBC Maia Schweizer BBC

A vast facility housing a scientific breakthrough is hidden among heavy bushland in the southern suburbs of Sydney.

The Asian company SunDrive Solar uses a brand-new, top-secret method to claim to have solved” a very high value problem” in this area.

Its huge development? Finding a way to change solar cells ‘ silver with metal, which was originally believed to be difficult.

” Gold is expensive, scarce and socially disastrous, and it limits how many solar can be rolled out around the globe”, explains chief commercial officer Maia Schweizer.

” Brass is also highly in demand, but it’s 1, 000 days more numerous, and 100 days lower value”.

The start-up is one of the beneficiaries of the government’s Coming Made in Australia program, a collection of policies that invest in local alternative industries to make the nation a “renewable energy superpower.”

But some experts question whether the$ A22.7bn ($ 15bn, £11.8bn ) package, which comprises tax incentives, loans, and kick- starter grants- is enough to meet those lofty ambitions.

And according to climate scientists, Australia must cease selling fossil fuels if it wants to be a significant participant in the net-zero change.

Australia’s market has long been powered by its natural sources, such as coal, oil and iron ore.

However, its essential minerals are exported raw and refined abroad, most of which are used to support important lower emissions technologies.

Australia has earned a reputation as the world’s rock thanks to its dig-and-ship model of trade, which has also resulted in significant loss of significant change farther up the supply chain.

One indication of lithium-based batteries that store solar energy and power electric cars is used.

Despite being responsible for more than half of the world’s supply, Australia captures just 0.5% of the global $57bn lithium battery market, according to the country’s national science agency.

The Coming Made in Australia plan, which was officially announced in April, aims to change that by providing tax breaks and money to businesses that process crucial minerals at home.

Doing so, the state argues, is a national surveillance concern, as countries examine their business dependence on Beijing, and seem to protect themselves against supply chain shocks.

” This is not old- made isolationism or protectionism – it is the new opposition”, Prime Minister Anthony Albanese said, when announcing the program.

” We need to aim higher, be strong, and create large, to match the size of the option in front of us”.

Alpha HPA Rob Williamson at work at Alpha HPAAlpha HPA

Alpha HPA, based in Queensland, is one of the businesses that the government has chosen to carry out its perspective.

Similar to SunDrive, it sees itself as a industry because it can produce high-quality aluminum items that are used in applications like semiconductors and iPhones with less carbon footprint than their outside competitors.

One of the largest aluminium factories in the world is being built close to the coastal town of Gladstone, thanks to a$ 400 million federal loan, according to the company’s claim that it will result in hundreds of local jobs.

According to Alpha HPA’s chief operating officer Rob Williamson, there is still skepticism about whether Australia may produce goods, given that the company has historically outsourced its manufacturing to China.

” Anybody that puts forward the case that we do n’t have people in this country to do]this work ] is just not trying”, he adds.

SunDrive is on a similar trip.

Without government aid, Ms Schweizer says, the firm might have moved abroad.

Rather, it wants to turn one of the nation’s oldest coal power plants into a large solar panel manufacturing gateway.

Currently, one in three Australian households have solar panels, the highest rate in the world, and yet only 1% are made locally – with China responsible for more than 80% of global production.

” Every one material that you need to create a solar panel, we’ve got one of the best three resources in the world”, Ms Schweizer explains.

” Then there’s the possibility of the finish- to- finish value chain coming inland in Australia for the first time, which is very, very exciting”.

The Made in Australia pledge has won the support of the country’s biggest renewable energy industry trade bodies, who say the investments could be “game changing”.

” It’s a great option for us to be an exporter of climate solutions to the world instead of climate issues”, John Grimes, who heads the Smart Energy Council, says.

But some climate experts warn it is being “severely undermined” by the government’s recent decision to champion gas until 2050 and beyond despite global calls to rapidly phase out fossil fuels.

” We’re sending a genuinely mixed information to traders”, says Polly Hemming, the chairman of the Australia Institute’s environment and energy project.

Alpha HPA Alpha HPA production facility Alpha HPA

” This state has continued to review fresh gas and coal projects- it’s flown to Japan, India, Korea, and Vietnam to secure long- word markets for gas and coal.

” If we really wanted to be a green energy superpower, we would n’t be relentlessly pursuing customers for our fossil fuels,” she says.

One of the nation’s leading climate scientists agrees.

According to Prof. Bill Hare, chief executive of Climate Analytics and author of numerous UN climate change reports,” there is a very deep contradiction at the heart of the two policies.”

” The Future Made in Australia]plan ] is playing second fiddle to the government’s gas strategy.”

To understand how, Ms Hemming says you need to” follow the money”.

According to an analysis from her thinktank, last year alone, state and federal governments spent A$ 14.5bn subsidising fossil fuel use across Australia, and that sum is only expected to balloon, according to budget estimates.

By contrast, she says the A$13.7bn set aside to process critical minerals and incubate Australia’s nascent green hydrogen industry “isn’t real money”.

That’s because it will take the form of tax breaks over the course of a decade, which can only be cashed in on production starting from 2027 – a model which policymakers say will ensure taxpayers’ money is not wasted.

However, none of the green hydrogen projects are finished, many of which are being led by the nation’s largest mining and energy companies. If there is a change in the government, the incentives could be eliminated before they become effective.

It’s like I have a healthy eating and junk food policy in place at the same time in my house and tell my kids,” You can have$ 10 a week now if you keep eating junk food,” she says.

” Or,’ I’ll give you$ 2 in 2027 if you switch to broccoli’. What do you think they are going to prioritise?”

Given that the green hydrogen industry is still in its early stages and full of unknowns, some energy experts have also doubted the business justification for it.

Others worry that it will slow down climate action and derail investment away from renewable energy sources that have already proven their worth.

However, Mr. Grimes claims that green hydrogen will play a crucial role in” sliming emissions” from Australia’s carbon-intensive mining sector as businesses look for cheap green fuel to keep running their businesses.

And bigger picture, he argues that the government’s new green investments should be assessed as” a milestone first step “rather than an end point.

The government is aware that Australia could become the Kodak economy of the future: a big deal one day and completely irrelevant the next if it does n’t move beyond its coal, gas, and iron ore exports soon.

Getty Images Iron ore being loaded at a mine in Western AustraliaGetty Images

Not just Australia is trying to be the engine room of the new green economy, but it is also looking to.

Dozens of nations are putting forward ambitious proposals, such as the European Union’s Green Deal or America’s gargantuan Inflation Reduction Act.

According to the International Energy Agency, policymakers have invested over A$ 2tn in clean energy initiatives globally since 2020.

But Australia has some compelling natural advantages, such as enviable wind and solar capabilities, stores of critical minerals and rare earths, and a strong mining infrastructure network that can be repurposed.

All the experts the BBC spoke with agreed that if used correctly, it has every chance of securing its position as a crucial green trading partner among allies.

Getting there though, they say, will require even greater investment – particularly in research and development, which is currently at 30-year lows.

And they’ve warned that the government ca n’t afford to stutter on a topic that Mr. Albanese himself has addressed head on.

” We have to get cracking. We have unlimited potential, but we do not have unlimited time.

” If we do n’t seize this moment, it will pass. If we do n’t take this chance, we wo n’t get another. If we do n’t act to shape the future, the future will shape us”.

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Commentary: Teaching children to care about the environment starts at home

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Despite having fewer tools and less experience than our parents, this original design highlights the potential of our children to effect true change.

However, it’s concerning that only 21 % of CEOs in Asia Pacific view climate change as a top priority in 2024, according to an EY survey. Teenagers and other young people should take responsible climate activity, according to people.

LEARNING ACROSS GENERATIONAL DIVIDES

Our children have a lot to tell us, just as we try to instill weather awareness in our children.

My girl enjoys reading a lot of marine environment books because she is excited about them. She was chosen as a fresh sea scientist to signify her primary school in a panel discussion organized by the Nature Society Singapore with the help of her teachers.

As this was during the COVID- 19 phase of residence- based learning, the conference was held on Zoom and was open to the public. Her parents, family users and our companions joined the program and learnt much, while encouraging the kids on the board.

Shortly thereafter, my girl urged us to let her get public transport. I think her teachers started the right discussions with her students about the economic effects of her transport choices.

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Malaysia unveils 3-phase US.3bil National Semiconductor Strategy to strengthen position in all-out global semicon war

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  • 3- step plan backed by US$ 5.3bil in governmental support and qualified opportunities
  • Walk up&nbsp, into higher- finish manufacturing, style, packaging, and equipment

Prime Minister Anwar Ibrahim declared Malaysia's intention to cement its position as a leading international hub for semiconductor manufacturing, and innovation while aiming to build a strong base in chip design.

The Malaysian government today unveiled its comprehensive three-phase plan, supported by US$ 5.3 billion ( RMRM25 billion ) in fiscal support and targeted incentives, in an ambitious move to advance the nation’s position as a leader in the semiconductor industry over the next ten years. &nbsp,

Prime Minister Anwar Ibrahim unveiled the action at the SEMICON SEA 2024 meeting in Kuala Lumpur now, laying out Malaysia’s intentions to strengthen its position as a leading global hotspot for semiconductor manufacturing and development while aiming to establish a solid foundation for chip style.

Anwar’s news comes in the wake of Yoon Suk Yeol, the president of Sought Korea, who last week described the world’s semiconductor market as an “all-out war” to capture the fruits of what is expected to be a US$ 1 trillion marketplace by 2030.

US$ 19 billion ( RM89.2 billion ) support package with 70 % focused on helping homegrown SMEs in the semiconductor supply and value chain.

Anwar emphasized the crucial role of a tenacious and developed global semiconductor supply chain while recognizing Malaysia’s solid foundations as the country’s 6th-largest exporter and 10th-largest consumer of electrical and electronics goods. &nbsp,

Highlighting its outsourced semiconductor assembly and test ( OSAT ) specialization, Anwar also spelled out Malaysia’s intentions to move up the value chain into higher- end manufacturing, design, packaging, and equipment.

” The NSS is a strong, agile, equitable, and forwards- considering strategy designed to foster collaboration with companies across ASEAN, Asia, and the world stage”, Anwar proclaimed. A robust multinational semiconductor production is still necessary for humanity, despite geopolitical dynamics, especially as our time is running out in our efforts to combat climate change and mitigate risk.

Reflecting Malaysia’s increasing strategic position, Penang, Asia’s Silicon Island, attracted a record RM61 billion &nbsp, in semiconductor FDI last year- exceeding its combined FDI of the previous seven years. This includes Intel’s RM30 billion investment in a new fabrication facility.

]RM1 = US$ 0.212]

Anwar reaffirmed that while proud of our OSAT accomplishments, we have strong potential to expand further into the value chain, underlining the NSS’s strategy to foster an ecosystem supported by dynamic Malaysian businesses and world-class talent working with global industry leaders.

The ambitious NSS was created as a result of a collaboration between the Ministry of International Trade and Industry ( MITI), its agencies, and a number of other ministries. It has been organized into a three-phase plan. Phase 1 focuses on” Building on Our Foundations” by leveraging Malaysia’s existing industry capacity and capabilities. &nbsp,

This includes modernizing OSAT services with advanced packaging, expanding trailing- edge chip fabrication and power chip production, and developing local chip design champions. Phase 2, dubbed” Moving to the Frontier”, will pursue cutting- edge logic and memory chip design, fabrication, testing, and integration with major chip buyers. &nbsp,

Anwar expressed confidence that Phase 1’s successful implementation will encourage the best-known advanced chip manufacturers to start operations in Malaysia. The third and final phase,” Innovating at the Frontier”, aims to develop world- class Malaysian semiconductor design, advanced packaging, and manufacturing equipment firms while attracting cutting- edge technology giants like Apple, Huawei, and Lenovo to pursue advanced manufacturing in the country.

Five overarching goals that the Malaysian government has set serve as foundation for the NSS:

  1. Secure at least RM500 billion in investments for Phase 1, driven by domestic direct investments in IC design, advanced packaging, and manufacturing equipment, coupled with foreign direct investments in wafer fabs and semiconductor equipment.

  2. Establish at least 10 Malaysian businesses in the advanced packaging and design industries, each with a revenue range of RM1 billion to RM4.7 billion by Phase 2. There are envisioned a further 100 local businesses that are related to semiconductors and have revenues in excess of RM1 billion.

  3. Position Malaysia as a globally- recognized R&amp, D hub for semiconductors, bolstered by world- class universities, corporate research centers, and centers of excellence that blend top Malaysian and international talent.

  4. In the next five to ten years, train and advance a highly skilled semiconductor workforce that includes 60, 000 Malaysian engineers.

  5. To ensure the NSS’s successful operation, allocate no less than RM25 billion in fiscal support and targeted incentives.

Overall, the NSS is spearheaded by the National Semiconductor Strategic Task Force ( NSSTF ) under MITI’s oversight, with CREST serving as the strategy’s secretariat. While maintaining Malaysia’s core aspiration, which is” a major global player in accessible technology for everyone, powered by our semiconductor industry,” Anwar emphasized that the NSS will continue to be a “living document” that constantly evolves in response to changing industry and market conditions.

Malaysia’s positioning as a neutral, non-aligned territory that can support a distributed and diversified semiconductor supply chain helps to mitigate geopolitical risks and vulnerabilities, underpin the national strategy. Anwar emphasized Malaysia’s willingness to cooperate and make investments from all over the world in order to advance this crucial industry as a whole.

” Today, I offer our nation as the most neutral and non- aligned location for semiconductor production, to help build a more secure and resilient global semiconductor supply chain”, he declared, calling for support from industry stakeholders within Malaysia and internationally.

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Decarbonising energy in Southeast Asia: A bank and regulator’s perspective | FinanceAsia

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The need to connect the world energy system with the 1 is essential. 5°C purpose has never been more powerful. August 2023 marked the hottest month on record, surpassing even the document set in July 2023 by a substantial margin. The severity and frequency of climate change impacts are rising, highlighting the urgent need for activity.

According to the International Energy Agency ( “IEA” ), global carbon dioxide ( CO2 ) emissions from the energy sector reached a new record high of 37 billion tonnes ( Gt ) in 2022, 1 % above their pre-pandemic level, but are set to peak this decade.

Piyush Gupta, the CEO of DBS Bank, highlighted some of the important difficulties financial institutions are facing as they move to the energy market.

One important issue, according to Gupta, is the untested economy of many new technology. While some industries have fairly good systems solutions, others lack feasible options. Although hydrogen may hold promise, it is now too far beyond the reach of use. Even where there is systems, these innovative solutions ‘ cost points and economics frequently differ from those of fossil-based energy sources or different segments.

The economy are different when comparing the cost of solar production in regions with high thermal efficiency, like China or India, to those with cloud cover, like the tropic, according to Gupta. Elements such as the cost of land, which can be considerable for tasks requiring large places, and the costs associated with store, intermittency, and network upgrades further complicate the financial viability of projects.

In fact, some initiatives are not simple to finance based only on commercial viability.

Gupta was speaking at a screen debate at the Singapore state investment Temasek’s monthly sustainability-focused function, Ecosperity, from April 15 to 17.

The need for relevant infrastructure spending is the next problem identified by Gupta. While a job may be initiated, if the necessary investments in another system components, such as the network, are not made continuously, the site’s potential is compromised. Thus, it is crucial for a financial institution to take into account the wider communication and infrastructure requirements beyond the task itself in order to assess the viability of the investment.

The Asean nations ‘ risk prices, as discussed by Gupta, have an impact on project viability and prices. Foreign exchange threat and royal risk are included in these risk premiums. Some nations in the area are not regarded as investment-grade, which adds to the sovereign risk premium. Foreign trade risk is another important issue, as funding for these projects frequently is in US dollars while profits are generated in regional currency. Significant financial difficulties can be caused by this gap.

Finally, Gupta shared that project funding is influenced by the off-takers reliability, especially in the energy sector, where political considerations may affect payment reliability. Regime modifications can add another layer of complexity to venture financing by raising doubts about the off-taker’s commitment to completing its legal obligations. Together, these problems add to the difficulty and complexity of funding regional system jobs.

But, while difficulties exist, concerted efforts are underway to mitigate them, with continued growth of remedies aimed at overcoming these roadblocks.

Gupta, who spoke to FinanceAsia on the outside of the occasion, put forth one like solution, which he believes can have a significant influence on the sector’s journey to zero.

One of the most important components of a toolbox of solutions to climate change is establishing a reliable and open global graphite market. A strong global carbon market is a powerful tool for the personal sector to move money from developed to developing areas. This in turn has the potential to have a significant effect by enabling emerging markets to obtain funding for sustainable development tasks, which are required to speed up the transition to a low-carbon business. ”

According to Gupta, pursuing the implementation of cross-border and export industry also offers a considerable option. “These areas enable resource countries to develop capacity, size, and engineering without bearing the price, as other states purchase their authority, ” he noted.

To put this in perspective, the demand for coal funds could increase by 15 days or more by 2030 and up to 100 days by 2050. By 2030, the use and buying of carbon credits was reach$ 50 billion, subject to the successful implementation of the Article 6 code adopted at COP26.

Singapore’s online zero journey 

Singapore has set a goal of achieving net zero emissions by 2050. Singapore aims to have net-zero emissions from this industry by the same deadline given that its energy sector accounts for 40 % of its emissions. By importing fresh power from the Asean area, the nation intends to accomplish this goal.

Ngiam Shih Chun, chief executive, of the Energy Market Authority ( EMA ) of Singapore, said that while “Singapore has limited renewable energy resources, the country can access low-carbon electricity that is abundant in the region by connecting to regional power grids. This also encourages the growth of solar energy in the area and opens the door for the Asean Power Grid vision to become a reality. ”

The country has the target set to import up to fourgigawatts ( GW ) of low-carbon electricity by 2035, making up around 30 % of Singapore’s electricity supply then. EMA granted contingent certifications to trade up to 4 in 2023. 2 GW of low-carbon energy from Cambodia, Indonesia, and Vietnam. Companies are now completing feasibility studies and obtaining regulatory approvals from transit and source nations.

The projects are physically and economically feasible, and the source nation and Singapore are working together in a beneficial way, Chun said.

As Singapore actions steps down from its energy sector, Chun mentioned that these jobs are also pioneering because cross-border power trading is now constrained in the area. Their large size is also something to keep in mind, for instance, a 1,000-kilometer high voltage direct current wire from Vietnam. They are thus facing regulatory problems.

But, once cleared, they are expected to accelerate the development of cross-border buying, according to Chun.

The Laos-Thailand-Malaysia-Singapore power project, for example, took years to negotiate but is now the first successful cross-border power trading initiative across four Southeast Asian ( SEA ) countries. To improve trading volume and make multi-directional trading more profitable, discussions are currently being conducted. This advancement is in line with the Asian power grid’s goal, which promotes cross-border trading and benefits various SEA nations.

A national hydrogen strategy, which outlines the potential pathways for gas to be adopted in the energy sector, which could account for up to 50 % of the power mix, is another initiative being taken in the nation. Recognising the price differential for innovative solutions, Singapore is seeking “Pathfinder projects”. As a part of this action, Singapore aims to work with the business to experiment with and build up abilities in superior gas technologies, and identify and address any professional, protection, or regulatory issues that may arise.

Chen said that the private sector and financial institutions are closely involved in this phased approach. Currently, the focus is on shortlisting consultants and conducting pre-field studies, with funding secured to support these initiatives. The goal of the approach is to address the cost disparities brought on by new technologies and ensure the project’s viability and bankability.

¬ Haymarket Media Limited. All rights reserved.

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Commentary: Malaysia’s difficult path to a low-carbon economy

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Second, Malaysia should pursue the huge potential for green investment in electric vehicles ( EVs ), including motorcycles, and in hydrogen-based industries. Malaysia might become a leader in innovation, for instance, by utilizing battery-swapping systems in EVs to shorten recharge cycles and extend battery life. The opportunities for EV deployment, such as the road tax deduction and individual tax deduction relating to EV costs, are justified. An EV trend may be crucial to Kuala Lumpur’s 2030 goal of reducing coal power to 45 per share of the 2005 levels.

The biggest desire for green tech lies in a gas discovery. A clean power alternative to natural gas that produces enormous heat as a byproduct as well as water. However, its commercialism faces difficult challenges, particularly due to the high cost of producing hydrogen. The options are already growing, with gas being increasingly used in substances, cotton fabric production, cup, electronics, and metalworking.

Malaysia has great potential in this area as positive experiences emerge, for instance in Sarawak, where projects such as H2ornbill and H2biscus, in collaboration with Asian and North Korean lovers respectively, have made strides in hydrogen-based, export-oriented business.

Third, Malaysia needs to sea up administrative and financial assistance. In addition to money models, incentives, and grants for alternative technology adoption and R& development, there are other important areas of focus. D.

The state needs clearer standards and regulations in green markets, and more strict monitoring of efficient investments, to increase transparency and accountability. The state could also take into account the creation of a natural classification, which local banks have indicated would be helpful in setting criteria for approving natural loans. Lastly, enhancing the mobility and quality of data will be important for policy research, monitoring, evaluation, and future reforms.

With its big rely on fossil fuels, Malaysia faces a difficult but necessary road to decarbonisation. Yet, the country is well-positioned to plug into emerging industrial opportunities for low-carbon growth in industry and travel. Moving forward, Malaysia has confidently and quickly encourage green investments and work toward its carbon reduction objectives.

The ISEAS-Yusof Ishak Institute is hosting Vinod Thomas as a visiting top brother. This commentary  second appeared  on the Institute’s site, Fulcrum.

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