S-E Asia may soon import more fossil fuels than it exports

South-east Asia was already a net oil importer at four million barrels per day in 2018, while strong growth in demand for natural gas has reduced the surplus of gas for export.
South-east Asia was already a net oil importer at four million barrels per day in 2018, while strong growth in demand for natural gas has reduced the surplus of gas for export.PHOTO: REUTERS

South-east Asia could become a net importer of fossil fuels in the next few years, raising the financial burden on governments and increasing carbon emissions in the region, the International Energy Agency (IEA) warned in a report.

This comes despite expectations of slower growth in the region's energy demand as economies shift towards less energy-intensive manufacturing and services, and greater efficiency, the agency said in its annual South-east Asia outlook.

South-east Asia was already a net oil importer at four million barrels per day last year, while strong growth in demand for natural gas has reduced the surplus of gas for export, the energy watchdog said.

For coal, output from the region's top producer, Indonesia, was well above 400 million tonnes of coal equivalent last year, but increases in domestic demand and exports to China and India could reduce its surplus, the IEA said.

"These trends point to South-east Asia becoming a net importer of fossil fuels in the next few years," the agency said.

The region's overall surplus of supply over demand at 120 million tonnes of oil equivalent (mtoe) in 2011 had been eroded to just above 30 mtoe last year, it said.

Growing reliance on imports also raises concerns about energy security, the IEA said. For example, the region's overall dependence on oil imports is forecast to exceed 80 per cent in 2040, up from 65 per cent today.

With no change in policy, South-east Asia's energy demand is expected to grow by 60 per cent by 2040, accounting for 12 per cent of the rise in global energy use as its economy more than doubles, according to the IEA. This was slower than the region's 80 per cent growth since 2000.

South-east Asia's growth in electricity demand, at an average of 6 per cent a year, has been among the fastest in the world, the IEA said. However, some 45 million people in the region still lack access to electricity. The region is well on the way to achieving universal access to electricity by 2030, it added.

 
 
 

Renewable energy is set to play a larger role, but without stronger policy frameworks, the share of renewables in power generation would rise only to 30 per cent by 2040, from the current 24 per cent, the IEA said.

Wind and solar energy are expected to grow rapidly, while hydropower and modern bioenergy - including biofuels, biomass, biogas and bioenergy derived from other waste products - would remain the mainstays of South-east Asia's renewables portfolio.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 31, 2019, with the headline 'S-E Asia may soon import more fossil fuels than it exports'. Print Edition | Subscribe