MISC Bhd won silver at The Edge Malaysia ESG Awards 2024 in the transport and logistics category, thanks to the company’s proactive strategies in driving the industry forward, and through collaborating with industry partners.
“We have been actively advocating and advancing the use of dual-fuel vessels, alternative fuels, and sustainable ship designs, including the world’s first ammonia dual-fuel Aframaxes with near-zero greenhouse gas (GHG) emissions,” says MISC president and group CEO Zahid Osman.
MISC is committed to its 2030 Aspiration, which focuses on achieving a 50% reduction in total GHG emissions (compared to 2008 levels), a 50% improvement in operational cash flows and generating 25% of cash flows from New Energy Solutions by 2030.
Through its petroleum and products shipping arm AET, MISC has introduced the use of liquefied natural gas dual-fuel vessels since taking delivery of its first asset in 2019, marking a step in supporting the maritime industry’s transition to lower-carbon fuels.
“As of January 2024, we own 15 dual-fuel vessels. Additionally, we entered into contracts with Petco Trading Labuan for the world’s first ammonia dual-fuel Aframax tankers, a milestone in zero-emission shipping,” says Zahid.
MISC’s marine and heavy engineering segment, MHB, also expanded into the offshore wind sector, securing subcontracts for two high voltage direct current offshore substations.
We recognise that achieving decarbonisation requires maturing the value chain, driving customer demand, and ensuring technology and infrastructure readiness. Currently, the cost of carbon is not reflected in many markets, leading to hesitation from customers and society to absorb the higher costs of lower-carbon solutions,” says Zahid.
This reluctance, coupled with the absence of mechanisms to address the costs, presents challenges for the adoption of near-zero or zero-emission solutions. Regulatory frameworks are essential to driving demand and enabling greater supply of low-carbon options, he adds.
MISC aims to invest in assets with lower GHG emissions but still faces challenges in securing financing. Hard-to-abate industries, such as shipbuilding, offshore oil, and gas, are characterised by high capital costs, limited asset lifespans and a concentration of clients.
Despite these challenges, MISC has made progress through industry collaborations to advance the ammonia value chain and has actively engaged in global efforts, including the 4th Energy Transition Working Group Meeting under India’s G20 Presidency and the International Chamber of Shipping’s Shaping the Future of Shipping task force at the Conference of Parties (COP28).
“We strongly believe that collaborative action across the maritime and energy value chain is a clear example of how everyone needs to work together to achieve shared targets,” says Zahid.
MISC believes clearer regulations and closer collaboration between public-private sectors are necessary to make ESG adoption more effective.
“Malaysia’s New Energy Transition Roadmap and the upcoming National Climate Change bill will similarly create a more enabling environment to drive companies to achieve their climate pledges,” says Zahid.
Source: The Edge Malaysia