Mon, Apr 22 2024 22 April, 2024

COP28 fossil fuel phaseout in doubt despite G7 talks

Energy ministers of G7 countries agreed last month to accelerate a global fossil fuels phaseout, although they didn’t set a clear timeframe to achieve it.

Oil refinery with vapor (Photo credit: Adobe Stock/TTstudio)

A recent meeting of G7 countries has put back on the table proposals of a global fossil fuel phaseout, however the decarbonisation divide still existing between rich and poor countries means it’s unlikely that a deal will be reached anytime soon as the focus switches to renewables rollout and financing, experts said.

Energy ministers of G7 countries agreed last month to accelerate the phaseout of unabated fossil fuels – meaning those fossil fuels that are burned without the use of technology to reduce emissions – although they didn’t set a clear timeframe to achieve this.

Germany said the statement was raising hopes a similar deal would be struck at the United Nation’s COP28 conference in Dubai in November of this year, according to media reports.

However “it seems unlikely that the G7 will agree strong language on the need to phase out all fossil fuels,” Bob Ward, Policy and Communications Director at the Grantham Research Institute on Climate Change and the Environment, told Gas Outlook.

Although the Intergovernmental Panel on Climate Change “has made clear that any new development of fossil fuels would make it extremely difficult to limit global warming to 1.5 Celsius degrees, the G7 includes several large producers of oil and gas, including the United States and the UK,” he continued.

“Those countries have shown no interest in stopping the development of their own new oil and gas fields, and are not engaging with other producers about leaving their reserves in the ground,” he added.

“Natural gas may have a role to play as a short-term bridging fuel if it rapidly substitutes for coal, but in a zero carbon world it could only be used with carbon capture, utilisation and storage,” he said.

“However, renewables are far cheaper so the use of natural gas is likely only to occur as back-up capacity until electricity storage capacity is scaled up.”

Focus on renewables rollout, financing

“We saw from the G7 summit a set of declarations around the global energy transition that covered the gamut of energy efficiency, renewables, supply chains and power systems, as well as welcome new pledges to scale up offshore wind and solar by 150 GW and more than 1 TW by the end of the decade” Jim Walker, senior director at Sustainable Energy for All, told Gas Outlook.

Vienna-based Sustainable Energy for All was set up by the UN in 2011, but is now an independent organization that works with governments, the private sector, and civil society.

“The conversation around the phase out of unabated fossil fuels was much less specific, focusing on general language around accelerating the process.”

“The extent to which a G7 agreement between the world’s richest nations translates into progress at COP28 when 198 countries, rich and poor, will be around the table is hard to say,” he continued.

“While it is clear there is increasing momentum to set deadlines for the phase-out of coal, an energy source that is now being roundly outcompeted by more sustainable alternatives everywhere in the world, and whose time has run out… In terms of the phase-out of oil and gas, it seems much more likely that this is going to be accelerated by a concerted push for the better alternatives” such as renewables, energy storage, electrification of transport “and in some sectors over time, green hydrogen,” he argued.

Initiatives like the Powering Past Coal Alliance and the No New Coal Energy Compact “are keeping up the pressure on this front, despite headwinds in the wake of the war in Ukraine and its impact on international energy markets.”

On the other hand, for countries in the Global South that are still “grappling with major challenges around energy access and energy poverty, this is less a conversation around phasing out fossil fuels, and much more about phasing in energy for their growth, without getting locked into new oil and gas infrastructure in the short term that will become stranded soon after,” he said.

In that respect, accelerating the rollout of renewable sources appears as the most viable way to displace fossil fuel reliance.

“The solution here lies more in the terms and quantum of finance available for energy efficiency, renewables and storage and less in advancing fossil fuel phaseout targets” he added.

“There urgently needs to be enough finance on the table, on the right terms for capital-intensive renewables projects, and directed to the countries most in need of a just and equitable energy transition, one that meets their development needs as well as those of getting to net zero carbon emissions by mid-century.”

Fossil fuel phaseout in the Global South

Nigeria, Africa’s largest economy, has developed a costed Energy Transition Plan for this over the past couple of years and more countries like Barbados, Kenya and Ghana “are now following suit,” Walker said.

At the same time, “some key energy technologies are still woefully under-financed, including solar mini-grids and standalone systems that can displace ubiquitous diesel generators.”

Barbados’ Prime Minister Mia Mottley “has been vocal in calling for a reform of the development finance system, and this is a key conversation to watch in the run-up to COP28,” he added, including at a critical pre-COP summit in September organized by Kenya’s President Ruto.

“If we can make the development financing that is flowing predominantly from the G7 nations fit for purpose for the Global South’s energy and climate needs, then we can unlock private sector finance for sustainable energy at scale, and this will deliver the faster phase-out of fossil fuels,” he said.

Investments in clean energy are currently standing at US$1.3 trillion per year and are projected to reach US$2 trillion by 2030 however they must double to reach nearly US$4 trillion by 2030 if the world is to meet energy demand while successfully transitioning to a low carbon economy, the International Energy Agency (IEA) said.

Currently in Africa 600 million people, or 43% of the total population, lack access to electricity, most of them in sub-Saharan Africa, according to the IEA’s 2022 Africa outlook.

Under the Sustainable Africa Scenario (SAS), achieving universal access to affordable electricity by 2030 is the most urgent priority for the continent, which would require investments of US$25 billion/year.

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