Temasek may struggle to meet 2030 emissions target amid energy transition challenges

SINGAPORE: Temasek Holdings has warned that it may struggle to meet its medium-term climate goal of halving the net emissions linked to its portfolio by 2030, as global economic and industrial realities continue to complicate the transition to greener energy.

Speaking at the opening dinner of Ecosperity Week 2026, Temasek chief executive officer Dilhan Pillay said the pace of decarbonisation is being slowed by a combination of rising energy demand, continued reliance on fossil fuels and increasing financing costs.

Mr Pillay said industries such as aviation, shipping, steel, cement and power generation remain heavily dependent on conventional energy sources, making emissions reductions particularly difficult to achieve in the near term.

“We will continue to press forward on every available lever, but our pace must reflect today’s realities,” he said.

He added that the transition towards a low-carbon economy is likely to be more uneven, more controversial, and will not proceed in a linear fashion than previously anticipated.

“Global energy transition has entered a far more complex and uncertain phase with geopolitics reshaping markets,” Mr Pillay said.

“This makes the case for renewable energy even stronger, not just as a climate solution, but as a pathway to greater energy security, resilience, and long-term strategic competitiveness in a more volatile world.”

Temasek first announced its climate targets in 2019. According to Mr Pillay, emissions tied to the investment firm’s portfolio have since fallen by around 30 per cent. However, he acknowledged that the sovereign wealth fund’s significant exposure to sectors such as aviation and power generation could prevent emissions from falling sufficiently to meet the 2030 target.

Mr Pillay said renewable energy would play a central role in decarbonising the power sector over the long term. At the same time, he noted that traditional baseload energy sources, including thermal power, would still be required during the transition period to maintain electricity grid stability and keep power prices affordable.