ENERGY SECTOR
Brunei Economic Prosperity
IN THE SPOTLIGHT
A prosperous transition towards net-zero, where economic growth is in tandem with greenhouse gas decline, means decarbonising existing industries while progressively diversifying from highly polluting industries to greener or green economic sectors.
In advancing the green economy Brunei Green Economy Report was launched in April 2024 to formulate long-term economic growth while also meeting environmental sustainability goals. The report covers opportunities related to oil and gas and its downstream sectors that can lay the foundation for a green economy.
The need to move away from fossil fuels as the main driver of Brunei Darussalam’s economy was highlighted by Minister at the Prime Minister’s Office and Minister of Finance and Economy II Dato Seri Setia Dr Awang Haji Mohd Amin Liew bin Abdullah during the report’s launch.
Historically, Brunei’s economy has been heavily reliant on the oil and gas industry. But this has changed recently. The non-oil and gas industry contributes more than 50 per cent of the country’s gross domestic product and exports, compared to 36 per cent a decade ago. “While this has provided us with an encouraging economic progress, more can and need to be done especially as we remain vulnerable to internal and external risks and challenges,” said the minister. With challenges such as geopolitical tensions, the rapidly evolving technology, increase in cyber threats and climate change, the “traditional economic model which heavily depends on fossil fuels is no longer sustainable”.
Transition Strategy
A prosperous transition towards net-zero, where economic growth is in tandem with greenhouse gas decline, means decarbonising existing industries while progressively diversifying from highly polluting industries to greener or green economic sectors.
Outlined in the report are three key pillars that will drive Brunei’s green economic transition energy:
1. Decarbonisation of the existing downstream oil and gas sector
- Transition to renewable energy
- Adopting carbon capture
- Improve energy efficiency
- Methane reduction
2. Development of new green economic opportunities in the upstream and downstream oil and gas sectors
- Carbon storage services
- Clean hydrogen exports
- Trading of carbon credits
- Green financing
- Circularity and recycling
- Alternative food production
- Smart monitoring systems
3. Development of other non-oil and gas sectors for economic diversification
- Islamic food hub
- Seafood exports
- Aquaculture
- Business process outsourcing
- Eco-tourism
- Transportation & logistic hub
Four Green Economic Opportunities
The report also identified four priority opportunities that can meet Brunei’s economic, social and environmental objectives:
1. Transition To Renewable Energy
Brunei can scale-up its renewable energy capacity to support Brunei’s transition away from natural gas and coal-fired plants to clean energy. Specific potential lies in solar with abundant resources, waste-to-energy and hydropower
2. Carbon Capture and Storage (CCS)
There is an opportunity to build or retrofit plants with CCS technologies to ease decarbonisation. In particular, Brunei’s existing natural gas reserves and mature oil fields could be used for CO2 storage. Brunei can also leverage partnerships with CCS experts such as Shell PLC.
3. Clean Hydrogen Export Hub
Brunei can scale-up its renewable energy capacity to support Brunei’s transition away from natural gas and coal-fired plants to clean energy. Specific potential lies in solar with abundant resources, waste-to-energy and hydropower
4. Consumer and Industrial Waste Recycling
There is an opportunity for Brunei to establish a recycled PET (rPET) plant, using fly ash for production, and enforcing cleaner industrial waste management. Not only can Brunei recycle and repurpose its waste output, the growing demand of rPET and fly ash can also contribute to the economy.
A Long Journey With Economic Rewards
The report urges that developing a green economy is a long journey which must start now. The key opportunities identified are specific focus areas to help Brunei accelerate its green transition and economic diversification.
In the report’s foreword, former British high commissioner to Brunei Darussalam John Virgoe said the UK as a close partner is committed to supporting Brunei to continue to prosper into the future.
“With this report, and the wider Brunei Green Economy Framework project, I have the greatest optimism that Brunei will continue to grow towards a prosperous, sustainable economy.”