Is Shutting Down the Oil & Gas Industry the Only Way to Tackle Climate Change?
With global temperatures rising and summers getting more unbearable, it is high time we address the elephant in the room, as individuals, as industries, as organisations and as governments. Climate change has been a recurrent subject of concern for a couple of decades now and while global warming might just be one aspect of climate change, it is the most prominent threat lurking in the environment.
The primary cause of Global Warming is the presence of Green-House Gases (GHGs) like Carbon dioxide (CO2) and Methane (CH4), in the atmosphere. Simply put, GHGs trap heat in the Earth’s atmosphere and prevent Earth from releasing the excessive heat absorbed during the day. Over the last century, rapid industrialisation and urban development have resulted in an alarming rise in the amount of GHGs released into the atmosphere. The only way to undo the damage caused till now and stop further degradation of Earth’s climate is to promote and execute rapid decarbonisation.
What is Decarbonisation? Why do we need it?
Decarbonisation denotes the process of ridding the atmosphere of excess carbon compounds like CO2 by cutting its emission from various human activities. It refers to the transition to an economic system that decreases and compensates CO2 emissions in a sustainable manner. The long-term goal is to achieve a worldwide economy that is CO2-free.
There are several greenhouse gases that contribute to global warming, but CO2 is by far the most common. The yearly rate of increase in atmospheric carbon dioxide during the past 60 years is nearly 100 times greater than prior natural increases, such as those that occurred at the end of the last ice age 11,000–17,000 years ago.
The Paris Agreement was established to hold countries accountable in their efforts to reduce carbon emissions, with the primary goal of limiting global warming to no more than 2 degrees Celsius above pre-industrial levels. The European Union and its member states are among the 191 parties that have signed the Paris Agreement. Countries have submitted comprehensive national climate action plans as a contribution to achieving agreement’s goals.
The European Green Deal, which was presented in December 2019, highlighted the importance of a toxic-free environment to foster Climate Neutrality. The ‘Zero pollution action plan’ stood out among the key objectives of the Green Deal. On 12th May, 2021, the European Commission accepted the EU plan for Zero Pollution of Air, Water and Soil.
The Energy Transition — What is it and what are industry leaders saying?
Energy Transition is the shift in the global energy sector away from fossil-fuel-based energy production and consumption, and toward renewable energy sources. Technological breakthroughs and a global push toward sustainability have made it possible to transition to renewable energy from non-renewable energy sources like oil, natural gas, and coal.
In December 2020, the European Commission proposed rules to fund EU projects that involve electricity and low-carbon energy networks rather than cross-border natural gas projects in order to meet climate goals. With reference to EU’s goal to eliminate its net GHG emissions by 2050, Kadri Simson, the EU’s energy commissioner, said, “The closer we move to our climate neutrality target, the more natural gas will be replaced by renewables and low-carbon gases.”
Siemens, Iberdrola, and Vestas, which are among Europe’s leading energy companies, gathered for a panel discussion at the EU Industry Days 2021 event this February to explore industrial decarbonisation and digitalisation. The panel put forth viable solutions to accomplish climate targets such as electrification of the automotive industry, in line with EU’s 2050 goal of total decarbonization. They also recommended the promotion of sustainable technologies such as harvesting wind energy which wind turbines that are now moving towards being 100% recyclable. Paula Pinho, the moderator of the panel, said, “It’s not just about decarbonisation. It’s about looking to create jobs and opportunities so that Europe can continue to compete in the global energy market.”
Supporting arguments for decarbonisation
EU aims to be the first continent to achieve climate neutrality and has set targets to cut carbon emissions by more than half by 2030 and reach net zero emissions by 2050. In a step towards realising this goal, eleven EU countries signed a declaration in May 2021, urging the EU to put an end to funding fossil fuel projects under the trans-European energy infrastructure regulation (TEN-E). The signatories of this informal document include Austria, Belgium, Germany, Denmark, Estonia, Ireland, Luxembourg, Latvia, the Netherlands, Spain and Sweden.
The European commission believes that by investing in realistic technology solutions, empowering individuals, and synchronising action in critical sectors such as industrial policy, finance, and research, the EU can lead the way toward an equitable transformation.
EU’s industries have high decarbonisation potential, but could still use a deep transformation: decreasing the use of natural resources and energy, utilising low-impact materials, and pushing existing emissions-reduction technology.
Supporting arguments for Fossil Fuels
Fuels made from hydrogen can be direct replacements for oil and gas, and they can be low carbon if they are made with renewable electricity. However, using electricity directly to power cars and heat homes was proven to be significantly more efficient. A research published in May 2021 stated hydrogen-based fuels would be extremely expensive and difficult to acquire in the following decade. As a result, equipment like “hydrogen-ready” boilers may become dependent on fossil fuels and continue to emit the carbon emissions that contribute to global warming.
The production of renewable electricity is fast expanding due to a fall in costs. However, it only accounts for a minor part of total energy consumption, with coal, oil, and gas providing the majority of it. Direct use of electricity is cost-effective, but it necessitates the purchase of new vehicles and heating equipment. Falko Ueckerdt, who led the research at the Potsdam Institute for Climate Impact Research (PIK) in Germany, said, “Hydrogen-based fuels can be a great clean energy carrier, yet their costs and associated risks are also great.”
According to the study, generating and using hydrogen-based fuels in household gas boilers required six to fourteen times more electricity as compared to heat pumps. This is because energy is squandered in the production of hydrogen, in the production of e-fuel and in the combustion of it. Using e-fuels in cars takes five times the amount of electricity required by battery-powered cars.
Final decisions on decarbonisation
The European Union is tasked with both, implementing the Green Deal and resuming economic recovery following the COVID-19 crisis. Carbon prices on the EU emissions trading scheme are currently rising too quickly, causing the market to become excessively volatile, but the European Commission appears to lack an effective stabilisation instrument to address this.
Amidst the uncontrollable boom in carbon prices, EU revised the regulation on trans-European energy infrastructure (TEN-E) on 11th June 2021, allowing funding to continue for cross-border energy projects that are labelled Projects of Common Interest (PCI). In addition to the funding, PCI has access to fast-tracked permits despite the opposition from the 11 countries and the European Commission. This revision benefitted some natural gas projects, such as rolling over projects in Cyprus and Malta which aims at connecting the two Mediterranean islands to the European gas grid. Kadri Simson, EU’s Energy Commissioner, is of the opinion that even though electricity projects were not affected by the discussion on gas, the compromise reached by EU countries over the TEN- E regulation has marked a dilution of the EU’s ambition on climate change. EU’s sustainable financing requirements have already been delayed due to disagreements over gas, and they are only expected to worsen when more legislations are put up for revision.
Green hydrogen is considered as a critical component of operations to decarbonisation because it emits no emissions when produced and only water when combusted. Prof. Emmanouil Kakaras, Executive Vice President of NEXT Energy Business at Mitsubishi Heavy Industries EMEA, believes that a favourable EU policy framework and industrial collaboration are key to scale up green hydrogen production. An example of industrial collaboration is the Hamburg Hydrogen Network (Wasserstoff-Verbund Hamburg). It brings together twelve partners, including those involved in the Hamburg Green Hydrogen Hub, with the singular goal of mapping the full hydrogen value chain, from renewable energy through hydrogen consumption by consumers.
As of June 18th, 2021, Europe has the highest global concentration of Hydrogen Valley projects, according to the Hydrogen Valleys Platform, which shares best practices and data from 34 projects in 19 countries across the world. However, just four hydrogen valley projects have been completed globally. One such project is in Denmark, where renewable hydrogen generated from wind energy helps to balance the grid and is used in transportation and industries.
Key climate takeaways the G7 Summit
Britain hosted the G7 summit in Cornwall from 11th to 13th June 2021. US President Joe Biden and his colleagues from Britain, Canada, France, Germany, Italy and Japan held a face-to-face gathering primarily to discuss the COVID-19 pandemic and the climate crisis.
The G7 summit saw a significant progress in plans to combat climate change. The leaders of the nations pledged to phase out inefficient fossil fuel subsidies by 2025 and stop coal generation latest by 2030. Prior to the COP26 climate summit in Glasgow this November, a dedicated strategy for net-zero emissions is slated to release, and the G7 has committed to publishing strategies outlining how efforts to achieve a worldwide transition to net-zero would be achieved. According to Oxfam, a confederation of 20 independent charitable organisations, the G7’s present commitments would deliver $36 billion by 2025, with less than $10 billion going to climate adaptation projects and efforts. According to research, the G7 governments are not following through on their long-standing $100 billion pledge.
On the flip side, a net-zero energy agreement on transportation emissions has yet to be reached at the G7 conference. Heathrow CEO John Holland-Kaye has urged the G7 leaders to agree to escalating targets for sustainable aviation fuel mixes of 10% by 2030, increasing to 50% by 2050. The G7 countries agreed on a new framework to invest billions in green infrastructure. However, the new framework’s specifics are mainly unknown. The UK government has stated that the new initiative’s details will be revealed before to the COP26 in Lima. It is intended that it will concentrate on the implementation of green infrastructure in poor countries. Green energy was discussed during the G7, but no financing was announced. The participants of the G7 have pledged to promote “cheap and compelling renewable energy that is available to everybody in this decade.” There were, however, no specific initiatives for green innovation.
Environmental and Infrastructure Threat prevention
SuperVision specialises in the regular and effective infrastructure monitoring. The SuperVision Space (SVS) app uses earth observation and remote sensing technology to monitor threats along pipeline routes and transmission lines. With rising climate concerns, SuperVision’s solution is committed to a zero emissions way of monitoring. GHGs which often come from industrial leaks or oil and gas fields, e.g., CH4, can also be quickly detected. Therefore, SuperVision’s AI-based innovation provides reliable climate neutral monitoring, keeping in line with various international environmental treaties, such as the Paris Agreement.
