Singapore’s sovereign wealth fund is unlikely to meet its 2030 decarbonisation targets, its chief executive said, citing challenges in lowering the emissions of its aviation and energy-related holdings.
“Under current conditions — and given our portfolio exposure to hard-to-abate sectors — we are unlikely to meet our interim 2030 target to halve net portfolio emissions from 2010 levels,” said Dilhan Pillay Sandrasegara, chief executive officer of Temasek Holdings.
Speaking at the opening dinner of the organisation’s annual Ecosperity conference on Monday, Sandrasegara clarified that Temsek has not retreated from its net zero pathway, which it aims to achieve by 2050.
“What we committed to achieving come 2030 still serves as an important directional marker, befitting of our ambition and we will continue to press forward on every available lever, but our pace must reflect today’s realities,” he said.
These “realities” include Temasek’s exposure to the aviation and power generation sectors, which are both lagging on decarbonisation.
In aviation, where the fund has been engaging in “real operational decarbonisation, and not simply offsets,” sustainable aviation fuel (SAF) still accounts for less than 1 per cent of global supply, Sandrasegara pointed out.
Singapore Airlines, in which Temasek owns a majority stake, said in a results briefing last week that it would be adding more flights to its global routes as other carriers pare down due to higher fuel prices triggered by the war in the Middle East.
“As a shareholder, we are, of course, pleased with this, but on the other hand, with our sustainability cap on, we lament the increase in the emissions arising from this,” said Sandrasegara.
“But if SIA does not do well, it will be debilitated from doing the right thing in terms of fleet renewal and SAF adoption,” he added.
Temasek’s energy investments have also contributed to the derailment of its near-term decarbonisation goals. Last December, Temasek-backed Sembcorp Industries announced the acquisition of Australia’s Alinta Energy, which holds a 10.4-gigawatt (GW) pipeline of renewable energy projects but also has no set date to power down a 1.2GW coal-fired power plant.
Sandrasegara acknowledged that Alinta’s coal plant supplies some 20 per cent of the state of Victoria’s electricity demand, but also emphasised the group’s “clear pathway towards a cleaner energy mix over time.”
“The reality is that the world cannot transition overnight,” said Sandrasegara. “A credible transition is not simply about shutting assets down quickly — it is about replacing them responsibly, while preserving energy security, affordability, and grid reliability along the way.”
He pointed out that Temasek’s portfolio emissions have declined by about 30 per cent since 2019, when it first set its climate targets. In 2024, the group recorded its first reduction in portfolio emissions — driven at the time by Sembcorp’s divestment of its Indian coal power business, a move that drew criticism in the way it accounted for emissions.
Today, however, volatile global markets and higher financing costs have affected the cost of capital and slowed long-term investments, said Sandrasegara, forcing investors confront “a collision between long-term ambition and near-term constraints”.
“Therefore, the transition will be far more uneven, contested and non-linear than previously anticipated,” he added.
