How major European gas companies are putting their weight behind achieving climate neutrality in the post-COVID world. By James Watson, Secretary General, Eurogas.
The COVID-19 pandemic has brought significant disruption to our lives. Conversations that focused on the energy transition earlier in 2020 now inevitably discuss the huge social transition happening around the world, as countries focus on economic recovery.
Everyone is now challenged personally and professionally to adjust to the new normal, be it juggling home office with homeschooling or handling business activities online. But the crisis also reminded us of broader challenges we must tackle together.
Climate change is a challenge that affects the whole world – and it is a matter of great importance for the gas industry. As Europe and the rest of the world now make plans to recover from the COVID-19 crisis, we must do so with combatting climate change as our priority, to protect our economy, society, and the health of future generations.
In this context, many Eurogas member companies have announced global climate ambitions of net zero emissions by 2050. Society expects more of the energy system today: Major European gas companies are doing more to meet these expectations.
We must combine the innovation of new technologies for tomorrow with our knowledge and experience of the energy system today. In short, we must provide the world more energy, with fewer emissions.
The EU recovery
The EU should plan for a recovery that achieves maximum impact. This recovery must continue to provide reliable energy supplies that can help to relaunch our industry. It also needs to support a resilient energy system that can achieve carbon neutrality goals.
Most importantly, it must strive to maintain Europe’s leadership in low carbon technologies, and secure jobs for all Europeans.
In this vein, the reaction from the European Commission was clear: Prepare yourself for change. From now on, all initiatives will be aimed at combining two aspects, achieving climate neutrality while maximising the economic recovery.
It might seem that much of the public discourse is focusing on electrification as a silver bullet to solve the climate challenge issue. It is correct that electrification of end-users can in many cases improve energy efficiency, but that does not mean that it is also the best way to decarbonise our economy.
Energy efficiency, increased electrification and the greening of the electricity sector will undoubtedly have to play an important role in the energy transition. But energy efficiency is only one of many tools needed for creating a climate neutral economy. The overall choice and combination of available solutions depends on how cost-effective they are in achieving our decarbonisation objective.
Two EU strategies adopted this summer – The Energy System Integration and Hydrogen Strategies – are the building blocks of a combined approach to tackling climate change. They also signal a step change for the gas sector. The Commission confirmed that the EU will need gaseous molecules to break silos in the energy system and achieve climate neutrality in the most cost-effective way.
That is why future-proof solutions – producing hydrogen from natural gas and capturing the carbon and fostering the uptake of hydrogen from renewable electricity – will not only help achieve decarbonisation, but provide Europe with a leading position in manufacturing clean technologies, as well as creating quality jobs for Europeans.
We have all the technologies necessary to reach our goals. What remains now is for policymakers to focus on how to deploy these technologies – and the policies to support them – to deliver a climate neutral economy in the most cost-effective and socially acceptable way.
Eurogas was therefore pleased to see the recent launch of the European Clean Hydrogen Alliance, of which we have become a member, that will make sure that all clean hydrogen technologies – carbon capture and storage, pyrolysis, electrolysers – are used to kick-start the hydrogen economy now.
Climate neutrality starts now
In this context, Eurogas felt it was important to contribute to the debate with our vision of a climate-neutral Europe. Our study, developed by DNV GL, an internationally-renowned consultancy, and presented this summer, demonstrates that there are many different pathways to 2050, some more affordable than others.
The study demonstrates that the EU can save €4.1 trillion by 2050 – an amount equivalent to Germany’s annual GDP in 2018 – by using a mix of energy carriers to achieve carbon neutrality, as opposed to a single focus on electrification. Major cost savings in applying this approach in the buildings sector are particularly key to saving this huge amount of money. This finding is of high importance as Europe needs funds to recover from COVID-19.
Gaseous energy is a necessity in every sector if we are to make the energy transition a success. Natural, renewable and decarbonised gas will have to be part of the overall solution across society – and not only in those sectors where electrification is technically challenging or impossible.
The study findings anticipate some of the EU legislative initiatives expected for later this year, such as the Renovation Wave strategy, which aims at improving the energy efficiency of the EU building stock.
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Electrifying heating might seem to be an easy solution to improve energy performance of buildings. But it is not just a matter of replacing an efficient gas condensing boiler with a heat pump.
For most homeowners, it means deeply renovating their homes and to completely change their entire heating system, radiators, pipes and all. Achieving a critical mass of heat pumps also requires a complete overhaul of the electricity infrastructure, which must be massively expanded, to guarantee that everyone can keep warm in winter. While at the same time this huge infrastructure will lie unused for up to 10 months of the year.
And of course, the electricity used must also be carbon neutral. In many cases, it will be more cost-effective and more realistically achievable to make sure that the existing gas system delivers climate neutral energy.
This is just one example from the legislative calendar for 2020. This autumn we will also focus efforts on other legislative files, such as the Climate Law, which aims, among others, to increase the EU’s greenhouse gas emissions ambition.
This initiative provides another opportunity to show that gas offers a means to limiting greenhouse gas emissions. This will make sure business and policymakers are aligned on actions needed to achieve climate neutrality in the most cost-effective way.
This and next year, Eurogas will also continue to advocate for targets for 2030 and 2040 renewable and decarbonised gas to make sure all decarbonisation options are at the table. We believe new types of gases are a central pillar of the economic recovery plan for after the COVID-19 crisis.
Keeping business as usual is not possible in the post-COVID-19 world. It is time to shape the new normal, by accelerating the development and financing of clean technologies that are made in Europe – like biogas, biomethane and hydrogen production.
Gaseous solutions are needed for relaunching the EU industry, securing jobs for European citizens and maintaining industrial leadership for European businesses, while delivering on the climate neutrality goal.
To reach climate neutrality, the EU has to decarbonise the gas molecule – our industry is ready to do just that.
James Watson took part in Enlit Europe/Power Engineering International webinar exploring the role of hydrogen in Europe’s 2050 net zero ambitions. Access the recording.