Gas wins recognition as ‘transitional technology’ to climate neutrality

European Commission President Ursula von der Leyen (L) and German Chancellor Angela Merkel (R) arrive at a press conference following a face-to-face EU summit, in Brussels, Belgium, 11 December 2020. [EPA-EFE/JOHANNA GERON]

The lower carbon intensity of natural gas – which produces half the emissions of coal when burned in power plants – and the emergence of new technologies like hydrogen are setting gas apart from other fossil fuels in the clean energy transition.

On Friday, the European Council, which brings together the EU’s 27 national leaders, adopted a new greenhouse gas reduction target for 2030: -55% from 1990 levels, up from the previous target of -40%.

In their conclusions, the leaders reaffirmed that it will be up to each member state “to decide on their energy mix and to choose the most appropriate technologies to achieve collectively the 2030 climate target, including transitional technologies such as gas.”

The explicit mention of gas is contentious. Gas advocates say it is ideally suited as a transition fuel for coal-reliant countries like Poland and Germany as they make decarbonisation their main priority. This is because it has a lower emissions intensity than other fossil fuels like coal: gas produces on average half the emissions of coal when burned into power plants.

But perhaps more importantly, the same infrastructure used for fossil gas could now be used in the future for new gas technologies such biomethane or hydrogen gas.

“With the current technology you can abate up to 90% of the CO2 emissions from gas, which is already a lot,” said Luca Giansanti, head of European government affairs at Italian energy company ENI. “Then you have decarbonised and low-carbon gas in the form of blue hydrogen. Technological improvement in the future could bring this percentage up to 100%,” he told a EURACTIV event last week.

“The switch from coal to gas is already underway, and through that, gas has been contributing a lot to the reduction of emissions all over Europe. Last year the contribution of gas to decarbonisation, together with renewables, has been impressive.”

Giansanti was referring to figures published at the beginning of the year, which showed that coal power generation had plunged by a record 24% in Europe last year. Half of that coal power capacity was replaced by renewables, and the other half by natural gas.

This partnership with renewables is key, Giansanti said, because renewable power sources like wind and solar are intermittent, dependent on when the sun is shining or the wind is blowing. So some kind of currently available steady source of power will be needed in the short to medium term to partner with renewables to keep grids operational.

Natural gas is a 'caveat' in energy transition, EU admits

While fossil fuel projects are in theory excluded from EU funding, natural gas will continue to play a key role in replacing coal while helping to build a hydrogen infrastructure at least cost, EU climate chief Frans Timmermans said on Thursday (28 May).

But climate campaigners are deeply suspicious of gas. The debate isn’t just an academic one. Whether or not gas infrastructure is deemed to be part of the green energy transition will determine whether its eligible for EU funding, which now has to be compatible with the EU Green Deal. The mention of gas in the Council conclusions, therefore, was an important signal.

Spanish centre-left MEP Nicolás Gonzáles Casares MEP said he opposed EU funds going to gas. “I do think natural gas has a role as a transitional fuel,” he said at the EURACTIV event. “But we have limited funds, and the funds need to be dedicated to the clean technologies. Natural gas of course has a role because it’s cheap in the short term, but it can cause a lock-in effect.”

In addition, investment in new gas infrastructure typically has an economic life of 20 to 60 years, he argued, and steps taken in the next 10 years will be crucial for building a climate-neutral system. “The EU already has extensive and invaluable natural gas infrastructure,” he pointed out, saying that building more “will increase the risk of these lock-ins”.

“I really prefer the green hydrogen based on renewables. I think for example Next Generation EU [the Covid-19 recovery fund] cannot support new infrastructure for LNG gas, but can support new electrolysers for green hydrogen.”

These investments will have a big impact on the people who work at these energy facilities. Benjamin Denis, senior policy adviser with the workers association IndustriAll Europe, said he thinks the assessment about whether a gas technology should be eligible for green funding should be made on a case by case basis. “Behind the big word ‘gas’ we really need granularity to see what projects we’re talking about,” he said.

“We might need to have this discussion on a case-by-case, project-by-project basis. Let’s say that if the wide majority of funds – 90% maybe – would be dedicated to low carbon and green initiatives, it fully makes sense. But at the same time, if one member state or one region decides to go from an energy mix based 80% on coal towards an energy mix based mainly on renewables in the coming two decades, it could make sense to help that region or member state to unlock its current dependence on coal to go for some kind of gas technology for a certain period of time.”

Funding for the research and innovation into new low-carbon gas technologies will also be essential, he said. “I think we all agree we will need to roll out a wide portfolio of different technologies to be able to achieve that goal, keeping in mind that the energy efficiency first principle should apply. We need of course a lot of renewables, electrification, CCS, and some kind of green gas green hydrogen on the menu.”

Stephan Kolb, director of regulatory affairs at the German heating system manufacturer Viessmann, said for companies in his sector, a mix of available technologies will be best.

“What we need is a range of opportunities, offers, technologies and energy carriers to make sure everyone can cope with this huge challenge of decarbonising our home heating. We believe that decarbonised gases can help people so that nobody’s left behind.”

Carbon prices seen hitting €55 in 2030, hastening 'major' coal-to-gas switch

EU carbon prices are set to double by 2021 and could quadruple to €55 a tonne by 2030 if the European Union aligns its emissions targets with the Paris Agreement on climate change, according to a new report published on Thursday (26 April).

[Edited by Frédéric Simon]

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