KUALA LUMPUR: Yinson Holdings Bhd is leading the energy sector in its efforts to transition to clean energy and achieve net zero emissions, says Kenanga Research following a read-through of the group's recently published Climate Goals Roadmap.

       In March 2021, the energy infrastructure and technology company set out its climate goals of achieving carbon neutrality by 2030 and net zero emissions by 2050, which is aligned with the Paris Agreement.

       This led to the release of its Climate Goals Roadmap on Oct 22, which highlights its actions plans to achieve carbon reduction objectives.

       According to Kenanga, the net emissions from Yinson's offshore production, which represents 93% of the group's greenhouse gas emissions, is expected to steadily increase in tandem with new floating production storage and offloading (FPSO) contract awards in the coming years, before tapering off thereafter.

       However, the group is still expected to achieve 30% reduction in carbon intensity during this period via prudent carbon removal methods such as closed flare and hydrocarbon blanketing.

       "With the group’s net emissions from offshore productions expected to steadily rise until 2030, the group will be heavily reliant on renewable energy (RE) to offset emissions from its FPSO business and achieve its target of carbon neutrality by 2030.

       "As such, the group’s RE production is expected to grow exponentially, from 0.3TWh currently, to 1.75TWh by 2025, and 5.6TWh by 2030," said Kenanga in a Thursday note.

       At present, the group has 140MW solar capacity in India's Bhadla Solar Park, but the group has plans to expand its solar capacity in India to about 330MW as well as venture into RE projects in Chile.

       The group is aiming to achieve 3-5GW RE capacity in the next three to five years.

       In subsequent efforts to achieve net zero emissions by 2050, Yinson's key focus would be to integrate carbon removal technologies into its FPSO operations to achieve actual reduction in net missions.

       "During this stage, the group will implement a ‘No Venting and No Flaring Philosophy’ across all its offshore production businesses.

       "In fact, all new projects deployed from 2025 onwards will have completely eliminated regular venting and flaring – thereby reducing carbon intensity of FPSO operations by a further 30% from 2030 levels," said Kenanga.

       RE will be a crucial business division to the group as it is expected to reach 22.4TWh energy generation by 2050 while the green technologies division will play an increasingly vital role via strategic investments in marine, mobility and energy.

       Kenanga said Yinson's carbon intensity at current levels is significantly better than that of its international peers such as SBM, Petrobras and BW Offshore.

       It reiterated "outperform" on the stock with a sum-of-parts target price of RM7.35.