The pressing need for decarbonising the transportation sector, emphasising its pivotal role in combating climate change and unlocking economic opportunities, are some of the highlights from the RHB Investment Bank’s (RHB) report.
Responsible for approximately 21% of global CO2 emissions, the sector’s heavy reliance on fossil fuels necessitates a shift towards cleaner alternatives like electric vehicles (EVs), hydrogen fuel cells, and enhanced public transportation systems. This transition is crucial not only for environmental sustainability but also for driving economic growth through innovative solutions across Malaysia, Thailand, Singapore, and Indonesia.
Road transport stands out as a significant contributor, accounting for about 9.7% of global greenhouse gas emissions. Within this segment, road passenger vehicles alone contribute 46% of these emissions, underscoring the urgent need for widespread adoption of EVs to mitigate pollution from cars and trucks. Meanwhile, the aviation industry, responsible for approximately 1.9% of global emissions, looks towards sustainable aviation fuels (SAFs) as a viable short-to-medium-term solution to reduce its carbon footprint.
Shipping, essential for global trade, emits around 2.3% of global GHGs. It remains the most carbon-efficient mode of transport compared to air, road, or rail, yet faces potential cost increases of 5-10% due to proposed global shipping carbon taxes. In contrast, rail transport offers a cleaner alternative for distances under 700 km, providing faster and more sustainable travel options between city centres.
Addressing supply chain emissions is also crucial, with eight major supply chains responsible for over 50% of global GHG emissions, from raw materials to final product manufacturing. Achieving decarbonisation across these complex chains presents significant challenges but is essential for achieving broader climate goals.
In Malaysia, accelerating low-carbon transportation ranks prominently among the nation’s top priorities towards achieving Net Zero emissions. This includes scaling up public transport and facilitating EV adoption. Similarly, Thailand aims to reduce road transport emissions by 30% through enhanced energy efficiency, renewable energy adoption, and the expansion of its railway and bus networks by 2030.
Singapore, facing significant emissions from land transport, has outlined ambitious targets under the SG Green Plan 2030 to slash peak emissions by 80% through promoting green public transport fleets, encouraging active mobility modes, and incentivizing private EV ownership. In Indonesia, land transportation contributes 73% of total transport emissions, prompting initiatives to green both the public and private transport sectors to reduce emissions by improving vehicle efficiency and transitioning to cleaner fuels.
RHB identifies nine stocks poised to benefit from these regional efforts towards transportation decarbonisation. The nine stocks identified are Airports of Thailand, Astra Otoparts, Bangkok Expressway and Metro, ComfortDelGro, FM Global Logistics, Malaysia Airports, ST Engineering, TASCO, and Westports. These initiatives not only align with global climate targets but also present lucrative investment opportunities in sustainable mobility solutions across Southeast Asia.
