Molecules – The Eurogas Newsletter (November 2021)

A New Deal for a New Era

Photos @vivianhertz

As the summer sun melts away and the familiar rain returns to Brussels, not everything has stayed the same. Indeed much change is afoot in this political centre, with notable implications for the energy sector in Europe.

In July, the European Parliament supported Ursula von der Leyen’s candidacy as new Commission President, with commentators suggesting this will be the greenest Commission to date. There are some simple reasons for this. Firstly, the Commission President-elect has made significant promises that could fundamentally alter the approach to energy policy in the coming five years.

Some of these commitments have been packaged together and given the moniker a ‘Green Deal’. It will be the responsibility of the new Executive Vice-Preisdent Frans Timmermans, from the socialist party, to deliver these – and quickly. Ms von der Leyen committed to delivery within 100 days from the 1 November.

Within this sit three significant legislative proposals: 1) a 2050 carbon neutrality target; 2) increasing the 2030 carbon emission reduction target from 40% to 55%; and 3) including the aviation, maritime and building sectors in the Emissions Trading System (ETS).

Each represents a major statement of intent, and there are differing views as to how these three major policies could be enacted. For example, the inclusion of buildings (and therefore heating) in the ETS could lead to complications. Of the 28 Member States, 18 have already declared specific targets for integrating renewables into the heating and cooling sector in their countries within their National Energy and Climate Plans. These targets range from an 18% increase of renewables in the heating mix in Slovakia, to 80% in Estonia. To date, it is unclear what would happen to these national targets. In addition, the outgoing Commissioner for Energy Miguel Arias-Cañete, has indicated that increasing the 2030 carbon reduction target to 55% could result in reopening much of the Clean Energy Package in order to increase targets also in Renewables and Energy Efficiency. As a result, agreeing the carbon neutral target for 2050 may be the simplest of all three to deliver. In Eurogas we have announced our support for this target, and encourage legislators to provide a framework that will deliver this target respecting the full potential of gas.

Indeed, one of the main areas of the Commission’s focus in the last few months has been preparation for the ‘Decarbonisation Package’ – previously informally referred to as the ‘Gas Package.’ While it seems this may now be delayed to 2021, it remains crucial to the delivery of any of the targets set by the European Commission under any so-called Green Deal. This package has the opportunity to build a framework for gas to deliver the much needed carbon emission reductions – and set the course for further decarbonisation to 2030 and beyond. The new Commission must consider this as crucial; gas continues to offer solutions to many of the challenges we face.

An example of this is the decarbonisation of ‘hard-to-reach’ sectors such as maritime transport, Liquefied Natural Gas (LNG) is key. Forecasts suggest that maritime transport is set to triple by 2030. Thus by replacing bunker oil in shipping with LNG, we can deliver immediate climate benefits from reduced emissions. A second example is the continued – and scientifically supported – need for Carbon Capture and Storage (CCS). Three of the four pathways that the Intergovernmental Panel on Climate Change (IPCC) has put forward as pathways to meet the 1.5 target use CCS. The fourth is the most expensive – and disruptive. To quote the UK Climate Change Committee, CCS is a necessity not an option. It is encouraging to see that the European Commission has recognised this. Commission President-elect von der Leyen noted in her Mission Letter to Energy Commissioner designate Kadri Simson, that gas and CCS will have a notable role to play in achieving the carbon reduction targets.

It may be highly challenging to deliver specific policies within 100 days. However, the first 100 days could focus on establishing the overall level of ambition for industry and society, while commencing work quickly on the best policy tools to get there.

James Watson, Secretary General, Eurogas

Eurogas Central and Eastern European Conference (CEEC) 7-8 October, Riga

The 5th edition of Eurogas Central and Eastern European Conference (CEEC), taking place on 7-8 October in Riga is organised with the kind support of Latvijas Gāze and Conexus Baltic Grid. This event will address the issue of “The Baltic Region: Setting the pace for gas market integration”, with a particular focus on the functioning of the regional gas market, as well as the potential of LNG and the value of storage.

Rick Perry (US Secretary of Energy), Arturs Krišjānis Kariņš (Prime Minister of Latvia), Ralfs Nemiro (Minister of Economics of Latvia) and Philippe Sauquet (President of Eurogas) are announced.

Join us for the interesting and engaging debate! 
Registration is open here.

ITM Power: World’s Largest Electrolyser Factory – European Clean Energy Technology Leadership in Action 7 August, Sheffield UK

On 7 August, Eurogas Secretary General James Watson went to ITM Power’s electrolyser factory in Sheffield to gain insight into the growth and development of this vital renewable technology. The electrolysers turn renewable electricity from solar and wind into gas, (the so-called power to gas vector. This type of gas is commonly referred to as ‘green hydrogen’. The factory has produced numerous electrolysers that are now used around the world, both in gas grids and in the transport sector.

Business is developing for ITM Power. They will soon relocate to a factory producing over 1GW of electrolysers a year. This will be the world’s largest, and it is vital that regulations support Europe showing this type of leadership in clean energy development. Injecting hydrogen into some grids in Europe remains problematic from a regulatory point of view, but if we are to deliver on the promise of renewable and decarbonised gas, this must change.

Particularly as the development of electrolysers is currently being led by European companies – providing Europe with a fantastic opportunity develop and own the technology it needs to fight climate change. The new industrial ‘Green Deal’ must look at how it will be possible for European companies to maintain leadership in vital clean technologies to provide jobs, wealth and growth from the energy transition.

ITM Power are a case in point. Their success drives business for supplier companies located in the area, and in turn results in increasing economic benefits for the whole region. These are opportunities for society that we must not squander. Just as batteries have been championed through the battery alliance, so too much we champion this technology. One key difference is that Europe is currently leading in this field, and thus we have the chance to enhance our leadership. Let’s not waste it!

European LNG Engines: Tackling Hard to Reach Emissions 11 September, Vaasa Finland

On 11 September, Eurogas Secretary General James Watson visited Wärtsilä’s LNG engine factory in Vasaa, Finland for the announcement of a new state-of-the-art 200 million Euro factory.

This investment would allow production to remain in Europe, as with over 3000 direct employees the factory is a core element of the economy of the surrounding area. In addition, the European need for LNG ship engines is growing, as more and more freight is predicted for the next decade (estimates suggest a tripling of maritime trade by 2030.)

LNG can reduce the carbon footprint of this activity considerably and help reach the IMO carbon reduction targets for shipping. As such, LNG engines made in Europe are a good example of technological leadership that can support reducing carbon emissions, while providing economic benefit to Europe. Wartsila invest over 160 million Euros every year in Research and Development (R&D) to continuously improve the efficiency of the engines, which in turn reduce CO2 emissions. Some of these engines include turbo chargers – which can be the size of a small house! – that increase efficiency to reduce emissions further still.

Europe should be proud to develop these technologies. They offer solutions for targeting climate change that can be used at a global level and stimulate our own economy, demonstrating opportunities through the energy transition.

Eurogas President Highlights Support for Targets 9 September, Brussels

On 9 September, the newly elected Eurogas President Philippe Sauquet of Total visited Brussels for a number of political and media meetings, including Maroš Šefčovič, the European Commission Vice-President for the Energy Union. With the new Commission being discussed as ‘the greenest Commission’ we have seen to date, Mr Sauquet was keen to emphasise Eurogas’ support for climate neutrality targets, and highlight how gas can play a critical role in helping the EU succeed in its ambitious goals.

Many of the meetings focussed on the role of gas in energy transition and a sustainable future, as well as specifics such as upcoming gas legislation, industrial strategy, and building a strong gas market. Eurogas continues to call for the introduction of an EU-wide binding target for renewable and decarbonised gas, which we believe can underpin a number of these areas.

Speaking with both Reuters and Politico, Mr Sauquet emphasised that curbs on lending by the European Investment Bank (EIB) and others could slow the switch from coal-fired to less polluting gas-fired power plants and harm the bloc’s climate ambitions. The interviews also covered innovative gas technologies and LNG developments.

Galp Gás Natural Distribuição joins Eurogas 7 August 2019

A notable network of gas distribution system operators in Portugal, managed by Galp Gás Natural Distribuição (GGND) has joined Eurogas.

Nuno Nascimento, Head of Energy Transition, New Technologies and Communications said that, “GGND welcomes the European commitment to a greener economy, and sees the energy transition as an opportunity. The sense of partnership and collaboration within the Eurogas network is something we value greatly. In particular, sharing knowledge with other members encourages better and more informed decisions. Thus we consider our membership a proactive step helping us better prepare for the challenges, changes and opportunities ahead.”

GGND believes that to maintain the high standard of current activities and services, it is increasingly important to look at assets such as gas pipelines and infrastructure, and know the role that they will play in the future. For example, at a national level in Portugal, in the medium term (based on current and projected gas demand) gas distribution infrastructure will continue to play an important role in the country’s energy supply. This is due to its ability to manage large demand fluctuations, and provide the national energy system with a fast and flexible response. Nonetheless, it is also clear that taking action to meet the energy and climate targets will need technological developments and the increase of renewable energy production.

GGND manages nine out of the 11 gas distribution system operators (DSO) in Portugal. These DSOs oversee the supply of more than 1.1 million connection points, ensuring the distribution of more than 18,320 gigawatt hours of natural gas per year – and more than 13,037 km of gas distribution network. The organisation’s membership came into effect on 7 August 2019.

Nicolas Jensen, European Policy Manager for Eurogas, said that in turn the association welcomes GGND’s high standards in the safety and efficiency of its distribution networks, its expertise in establishing the connection and supply of gas to consumption points, and looks forward to the contribution of in-depth knowledge of the Portuguese energy market to bring further diversity and pan-European dialogue to Eurogas.

Citizens’ Energy Forum 12 September, Dublin

Since its creation in 2008, the Citizens’ Energy Forum has been constantly evolving and progressively opened to a wider range of contributors to the energy debate.

In 2019, two new features livened up the forum further still. On the one hand the new location – the AVIVA Stadium – encouraged more lively discussions with its awe-inspiring size and vibrant colours. On the other hand, the forum reflected the current trend of rising youth movements focussed on climate issues, by welcoming a large delegation from the National Youth Council of Ireland (NYCI.)

The NYCI provided the forum with a fresh perspective on the needs of customers. However, despite these notable changes, the event national representatives and newly appointed EU officials were notably less present than in recent years.

A ‘Just Transition’ was the guiding theme of discussions across all panels, and panellists discussed the customer’s perspective on the implementation of the Clean Energy Package. Future policy developments – such as sustainable finance and sector coupling – were also covered.

Participants broadly agreed on the need to ensure that ‘no customer is left behind’ in the transition to a more sustainable and digitalised energy system. Keeping energy affordable is key to wide public acceptance. In line with this, several speakers underlined the role of gaseous solutions to support the clean energy transition without it weighing too heavily on customers – particularly the most vulnerable among us.

Despite repeated attempts by panellists to cover the topic, the Commission showed was cautious to preclude any discussions on the content of a potential legislative package impacting gas.

In view of next year’s gathering, many participants suggested that opening the two-day conference to more civil society representatives would further reflect the title of the event, allowing more citizens a platform to share views.

Accelerating CCS 5 September, Oslo

On 5 September, Eurogas Policy Advisor Felicia Mester attended the European High Level Conference on Carbon Capture and Storage, co-hosted by the European Commissioner for Climate and Energy, Miguel Arias Cañete, and Kjell-Børge Freiberg, Norwegian Minister of Petroleum and Energy. This conference recognised the growing necessity of increased climate action and the emerging momentum for low carbon emission technologies in Europe, such as CCS, drawing upon experiences from other countries with relevant CCS activities.

The progress in Europe of renewable energy and energy efficiency – both of which are also core to the energy transition – has been substantial. However, greater measures will now be needed to reach the net-zero targets and to abate energy-intensive industries. According to IPCC scenarios, it will also be important to have negative emissions, which is only achievable through CCS or nature-based solutions such as reforestation.

Patricia Espinosa, Executive Secretary for the United Nation’s Framework Convention on Climate Change (UNFCCC) stressed that CCS is a key solution, but that it should not support a ‘business as usual’ scenario, while Miguel Arias Cañete stated that “to become climate neutral, it’s quite clear that you need CCS.”

Among the projects discussed were the Northern Lights project in Norway, run by a consortium of Eurogas members including Norway’s Equinor, as well as Shell and Total, as well as a project at the Port of Rotterdam to form a ‘CO2 hub’ and bring together the emissions of a number of industrial producers in the area. These are positive steps, but as one attendee put it, “we need to ask businesses to raise their level of ambition; the progress so far constitutes only a fraction of what we need.”

In particular, attendees and panellists considered the role of CCS in the EU’s strategic long-term vision for a climate neutral economy in Europe, with the aim of achieving an understanding of how to accelerate CCS deployment throughout the EU.

Significant financial resources would need to be available, such as the EU Innovation Fund. These could support large demonstration projects, allowing the development of technology that could then be rolled out more widely. Kjell-Børge Freiberg concluded that while there are technical, financial and legal bumps in the road ahead for CCS, “if all stakeholders come together there is a much bigger opportunity to solve them and deploy at scale.”

Concluding one of the panels was a discussion on the growing role of civil society in climate action and issues, with agreement that citizens must realise CCS is a requirement and push their governments will support it. In the words of panellist Jerome Schmitt from Total, “I civil society becomes inert, CCS will face major obstacles in kick-starting.”

Sustaining a Balance: Sustainable Finance and the Energy Union 25 September, Brussels

As an association committed to supporting the EU’s 2050 climate neutrality ambitions, Eurogas fully recognizes the importance of tools that will help to meet the Sustainable Development Goals (SDGs), the Paris Agreement commitments, and the EU energy and environmental goals.

On June 2019 a draft report was published by the Technical Expert Group (TEG) on sustainable finance, set up by the European Commission to assist it in developing, in line with the Commission’s legislative proposals of May 2018 an EU classification system – the so-called EU taxonomy – to determine whether an economic activity is environmentally sustainable;  As the report outlined, there is a need for “substantial investments far beyond what the public sector can muster”.

Eurogas has contributed to the public consultation following the TEG report’s publication, recalling that an EU taxonomy should build and take into account ongoing efforts, policies and regulatory frameworks already put in place at European Union (EU) level to strengthen sustainable investments, and stressing that energy security, access and affordability are core objectives of the Energy Union – to ensure safe, sustainable and affordable energy supplies to the EU – and should be upheld.

As the design of a truly sustainable and implementable taxonomy remains the objective, Eurogas, along with partners in GasNaturally, shared its views with EU Governments in a written statement, ahead of the COREPER II meeting scheduled for 25 September. Eurogas will continue to contribute over the coming months, as EU policy makers develop further outline plans for sustainable finance, as this is expected to be one of the cornerstones of the energy transition.

Coming up!

The International Biogas Congress & Expo (22-23 October, Brussels) aims to bring together leading producers, suppliers, regulators and other engaged organisations over a two-day period. High-level speakers, experts in their field, will address a range of topical issues relating to the biogas sector.

Andreas Guth, Eurogas Policy Director will speak on 22 October.

The Annual Conference & Gala Awards Dinner (24-25 October, Madrid) organised by COGEN Europe, COGEN Spain and ACOGEN on the theme of “Cogeneration: Efficient and Clean Heat and Power for Europe’s Sustainable Energy Future” will focus on current issues and latest trends for cogeneration.

James Watson, Eurogas Secretary General will be amongst the panellists discussing “EU Policy Unlocking the Business Case” (day 1, 24 October).

The European Annual Gas Conference (EAGC) remains Europe’s most renowned commercial & strategic gas conference, attended by over 300 of the most senior executives from the world including major energy customers and end-users, IOCs, NOCs, TSOs, traders and policy-makers as the preferred platform to network with peers, review trends, question policy and agree future strategy.

This event will take place from 5-7 November 2019  in Paris.
James Watson, Eurogas Secretary General will lead a roundtable at this event on 6 November 2019 on “Renewable & Decarbonised ‘Green Gas’ Strategies”.

ACI’s 5th Future of Biogas Europe Conference will be taking place in Amsterdam, The Netherlands, on 13 – 14 November 2019.

The two day event will bring together senior executives and experts from the full value chain to provide a forum for all parties active in the field of anaerobic degradation of organic matter and renewable energy production in the form of biogas. Power producers, technology providers, agricultural sector, food and beverage industry, waste industry and leading technology and solution providers are all impacted by the development of Biogas.

The conference will provide a forum to discuss the latest challenges and developments making an impact on the industry.

Andreas Guth, Eurogas Policy Director speak on 13 November 2019.

Over 200 exhibitors from the “gas and water world” are expected in gat|wat 2019 (26-28 November) in Cologne. Congress and trade fair visitors will have the opportunity to obtain first-hand information on new products and services.
In addition, The Silent Stage at the dialogue fair will offer specialist lectures to visitors on all three days on new technologies, infrastructure, digitisation and innovation. For the first time, the established Water Industry Innovation Forum, an event of the Water Innovation Circle (WIC) of DVGW and DWA, will also take place at this event. Innovative formats such as theme tables, speed dates and business breakfasts will enrich the trade fair.

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