Hydrocarbons will continue to be a part of sustainable and affordable energy mix to meet the needs of growing population, as technology aids energy transition and helps address climate challenges, according to chief executive of Baker Hughes.

The world needs to accelerate the pace of energy transition, but it should be with the view that it is “not the hydrocarbons, it is emissions” that needs to be addressed, Lorenzo Simonelli, who is also the chairman of global oil services company, told a Citizens Energy Congress panel discussion on Monday.

“Hydrocarbons will be here for a number of years to come and will be very important as we [continue to] have affordable, reliable and sustainable energy,” he said.

“Everybody agrees that climate change has to addressed. It’s a question of how you address it in a pragmatic fashion, making sure that energy is available in abundance.”

The Covid-19 pandemic has prompted several countries to adopt net-zero standards and pledge to offset their carbon emissions through adopting energy-efficient technologies and alternative fuels to build back better.

Many countries are also setting their own decarbonisation targets to meet the Paris Agreement temperature goals of limiting the global warming to well below 2°C and pursue efforts towards 1.5°C.

Earlier this week, leaders of the world’s seven richest nations that represents 40 per cent of the global economy, committed to reach net zero emissions as soon as possible.

"We commit to net zero no later than 2050, halving our collective emissions over the two decades to 2030, increasing climate finance to 2025, and to protect or conserve at least 30 per cent of our land and oceans by 2030," G7 leaders said in a statement.

The G7 also agreed to increase energy efficiency, accelerate renewable and other zero emissions energy deployment and leverage innovation. "Domestically, we commit to achieve an overwhelmingly decarbonised power system in the 2030s and to actions to accelerate this."

Technology will be the key driver of energy transition and will help to meet both 2030 and 2050 emissions targets, Mr Simonelli said. But it will require companies, governments and all stakeholders to work together, he added.

Wind and solar power costs have declined and technology can be used to reduce the carbon footprint associated with hydrocarbons, the chief executive said.

Hydrocarbons would be required to fulfil the demand for power over the next few years as the world transitions.

“There’s three quarters of the [world] population that still needs more energy and isn’t as affluent as Western Europe and North America, so we have to balance,” he said. “Gas in particular will be very important as we go through this transition and we can’t neglect the fact that a lot of energy is still required by growing population.”

However, despite the evolution of technology and dropping costs of renewable energy, “there’s a huge gap between getting to net zero [goal] and the current trajectory” of reaching that goal, Jeffery Sachs, director of the Centre for Sustainable Development at Columbia University, said.

However, there is an increased awareness about reaching net zero by 2050, particularly in the US, the EU, Japan Korea and many other major economies, he said.

World leaders are due to meet and discuss global climate challenges at the UN Cop26 environmental summit, which Britain will host in Glasgow in November. Last month Britain hosted a G7 environment ministers' meeting that saw the group commit to end all direct government support for international coal power by the end of this year.

“I expect it to be a diplomatic moment in which the world essentially would say, we get it, we will get to net zero emissions [target],” Mr Sachs said.

Last year would be regarded in retrospect as the tipping point, with US President Joe Biden taking office and the world understanding the need for energy transformation, he said. However, to deploy the available technologies at scale, the world needs a new set of policies and new financing structures.

The cost of financing has to be lowered and “we need a massive increase of the funding going through development institutions to finance large scale power grids … otherwise, it [energy transition] is not going to be affordable for the developing world”, he said.

Mr Simonelli said it will be “very interesting” to see how world leaders harmonise policies with net zero goals at COP26.

“Why solar and wind is being used, because it was incentivised through right policies and this can be a model going forward into the future, but free market is what will push its scale,” he said. “It’s a combination of both.”