How will the Russia-Ukraine conflict impact Asia’s net zero targets?
Markets are suffering higher inflation and supply chain disruptions.
Asia, a region that is highly reliant on fossil fuel, may experience a slower deployment of clean energy resources in the short term as an effect of the Russia-Ukraine war.
Joseph Jacobelli, managing partner at the Asia Clean Tech Energy Investments, said at the Asian Power Summit that the higher inflation and the increasing secondary interest rates are pushing the prices of materials used to build renewable energy.
The supply chain disruption which started during the pandemic was also worsened by Russia's invasion of Ukraine.
“These supply disruptions will slow the clean energy build in the very short-term,” Jacobelli said.
In 2020, Asia accounted for 46% of the total global imports of primary energy, 58% for global crude oil imports, 79% for global coal imports, and 71% for the global imports of liquified natural gas, according to Jacobelli.
On the other hand, he said that in the long-term view, the conflict has heightened urgency on the part of the governments to address reliance on fossil fuels.
Governments have also grown more concerned about high price volatility, high pollution, and low energy security. New clean energy solutions such as distributed energy and green hydrogen, amongst others, are being pushed more quickly, he said.
Jacobelli added that capital markets green pressure remains unchanged, with global green bonds issued in 2021 reaching $473.b compared to the $296b in 2020. Global Sustainable Bonds issuance this year is expected to exceed $1.5t from $1.04t in 2021, he said, citing S&P Global.