Asia Pacific to Capture 50% of Global Low-Carbon Tech Opportunities by 2050: Wood Mackenzie

The Asia Pacific region, home to half of the world’s population and contributing significantly to global GDP, faces a critical juncture in its energy future. Holding 50% of the global primary energy demand and 60% of carbon emissions, its path to 2050 remains heavily reliant on strong policy actions and investments for change. The ‘Asia Pacific Energy Transition Outlook (ETO)’ report by Wood Mackenzie underscores the region’s unique position to lead the global energy transition, amidst its diverse economic, policy, and natural resource landscapes.

Wood Mackenzie’s research, part of its ETO series, explores three potential pathways for the energy and natural resources sector, reflecting the complex interplay of factors that vary significantly across the Asia Pacific countries. These factors include population growth, economic development, and the availability of natural resources, all of which are pivotal in determining each country’s journey towards a low-emissions future.

Jom Madan of Wood Mackenzie highlights the Asia Pacific’s current stature as the largest market for power generation and renewables, alongside its diversity. The balance between decarbonization efforts and economic viability appears to hinge on the adoption of renewable energy sources and electric vehicles (EVs). Projections suggest a dramatic increase in EVs, from 24 million units today to 635 million by 2050, with potential further increases based on ambitious climate pledges and net-zero scenarios. This growth trajectory is fueled by the falling costs of EVs and resource availability.

In the realm of technology, the region is poised for a leap in low-carbon energy sources, expecting to generate 75% of its power from such sources by 2050, with wind and solar leading the charge. China and Australia are noted for their significant contributions to solar and wind capacities, setting the stage for a broader adoption of innovative technologies like energy storage, hydrogen fuel, small modular nuclear reactors, and geothermal energy.

The report also emphasizes the importance of hydrogen and carbon capture, utilization, and storage (CCUS) technologies in replacing fossil fuels across various industries. However, achieving these transitions requires robust policy frameworks, including carbon pricing and tax incentives, to encourage investment and close the emissions gap.

Despite the Asia Pacific region’s heavy reliance on oil, gas, and coal, the future also sees a potential shift in gas demand dynamics, with projections of growth in the power and industry sectors. However, achieving a sustainable energy future in the Asia Pacific necessitates significant investments in both maintaining existing energy supplies and exploring new ones, especially as domestic gas supplies dwindle.

Wood Mackenzie’s analysis provides a comprehensive look at the energy challenges and opportunities facing the Asia Pacific region, underscoring the need for concerted policy efforts and investments to harness its potential as a leader in the global energy transition.