SUSTAINABILITY STATEMENT FYE 2025 (CONT’D) CLIMATE ACTION INITIATIVES (CONT’D) Climate-related Disclosures (Cont’d) The analysis evaluates key macroeconomic drivers including carbon pricing and interest rates, over the period 2025–2050, which may influence operating costs, capital investments, and financing conditions for the Group. Below 2°C Scenario The Delayed Transition scenario assumes that climate policies are implemented more gradually in the near term, with stronger measures introduced later to limit warming to below 2°C. Under this pathway, the NGFS dataset indicates that the carbon price increases from approximately USD 16 per tCO₂ in 2025 to nearly USD 1,189 per tCO₂ by 2050. Compared to the Net Zero scenario, the slower initial policy response may result in lower immediate transition costs, allowing industries more time to adapt to regulatory changes. However, the eventual policy tightening could lead to more abrupt market adjustments, potentially increasing regulatory and operational risks for carbon-intensive sectors. For Keyfield, the delayed transition pathway may result in: • gradual increases in fuel and operational costs; • evolving regulatory requirements related to emissions reporting and reduction; • potential volatility in energy demand as the global energy transition accelerates later in the timeframe. Interest rates under this scenario are projected to increase modestly from -0.17% in 2025 to approximately 0.23% by 2050, indicating relatively stable financing conditions compared to the Net Zero pathway. While the delayed transition scenario reduces shortterm policy pressure, it may expose the Group to greater long-term market disruption as accelerated decarbonisation measures are implemented later by governments and industries. Below 2°C Scenario Under the Net Zero 2050 scenario, strong global climate policies are implemented early to accelerate decarbonisation and achieve carbon neutrality by 2050. As projected in the NGFS dataset for Malaysia, the carbon price is expected to rise significantly from approximately USD 218 per tCO₂ in 2025 to over USD 6,700 per tCO₂ by 2050. This rapid escalation in carbon pricing reflects the stringent policy environment required to drive largescale emission reductions across energy systems and industrial sectors. For Keyfield, which operates within the offshore oil and gas support services sector, such policies may result in: • increased operating costs for fuel and energy consumption; • higher compliance costs related to emissions regulations; • greater demand for low-carbon operational practices and energy efficiency. However, the scenario also presents opportunities for the Group to support the energy transition, particularly through offshore services linked to renewable energy infrastructure, offshore wind development, and lowcarbon marine solutions. The scenario also indicates a moderate increase in central bank policy interest rates, rising gradually to approximately 0.73% by 2050. This may affect financing conditions and capital expenditure planning, particularly for asset-intensive marine operations. Overall, while the Net Zero scenario presents higher transition risks in the short to medium term, it also creates strategic opportunities for diversification into energy transition activities, enabling the Group to enhance long-term resilience. Net Zero 2050 Scenario 48 KEYFIELD INTERNATIONAL BERHAD 202001038989 (1395310-M)
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