Temasek’s 2030 climate target collides with AI energy, aviation pressures

Portfolio emissions are down 30% since 2019, but hard-to-abate sectors stall progress.

Temasek is unlikely to meet its interim 2030 target to halve net portfolio emissions from 2010 levels due to exposure to hard-to-abate sectors and a more volatile global environment, according to ceo Dilhan Pillay Sandrasegara.

The group’s portfolio emissions have declined around 30% since 2019, whilst portfolio carbon intensity has improved even as overall portfolio value increased, Sandrasegara said at the opening dinner of Ecosperity Week 2026.

However, the firm’s exposure to aviation and power generation could prevent it from achieving the 2030 target. “What we are confronting today is a collision between long-term ambition and near-term constraints.”

He attributed the slower pace of decarbonisation to geopolitical tensions, energy security concerns, higher financing costs, and surging electricity demand driven by artificial intelligence.

“The transition will be far more uneven, contested and non-linear than previously anticipated,“ he added.

In aviation, Sandrasegara highlighted Singapore Airlines' efforts to improve fuel efficiency through fleet renewal and the adoption of sustainable aviation fuel (SAF).

“Today, SAF accounts for less than 1% of global jet fuel supply and remains around two to five times more expensive than conventional jet fuel,“ he said.

The airline’s next-generation passenger aircraft is expected to improve fuel efficiency by around 25%, whilst new Airbus freighters are projected to improve efficiency by around 40%.

On energy, Sandrasegara said thermal power would continue to play a role in maintaining grid stability during the transition to renewables. “This is why we are supportive of Sembcorp Industries’ acquisition of Alinta Energy in Australia.“

Alinta’s coal plant currently supplies around 20% of Victoria’s electricity demand, whilst providing the system stability needed to integrate more renewables into the grid, he added.

Meanwhile, the group continues to invest in climate-related businesses through its Sustainable Living portfolio, which reached $46b as of 31 March 2025, representing 11% of its portfolio value.

The investor also applies an internal carbon price currently set at $83.15 (US$65) per tonne of carbon dioxide equivalent, with plans to raise this to approximately $128 (US$100) by 2030.

$1 = US$0.78

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