Thu, Jul 18 2024 18 July, 2024

Nigeria must industrialise energy transition without big carbon impact: report

Nigeria needs to industrialise its energy transition without significantly increasing carbon emissions, a report funded by the Agence Française de Dévelopment said.

The oil city of Port Harcourt, Nigeria (Photo: Adobe Stock/KALADA)

An Agence Française de Dévelopment (AFD)-funded report on deep decarbonisation pathways for Nigeria’s low-emission development noted the west African nation needs to find ways to industrialise and undertake an energy transition without significantly increasing its carbon profile.

The report, which was done in collaboration with Nigeria’s Ministry of Environment through the Department of Climate Change and the National Council on Climate Change, explores the various facets of Nigeria’s energy transition, and examines the driving forces, challenges, opportunities, and policy initiatives shaping this crucial transition.

It also considers the pathways to achieving an energy and green economy transition in ways that are sensitive to Nigeria’s current economic reality and resource endowment, together with the global goal of decarbonisation.

“The priority is to develop ways to industrialise and transition without significantly increasing the country’s carbon profile. To achieve this, Nigeria would need to execute mitigation and adaptation methods and strategies that significantly improve macroeconomic stability, economic transformation, and job creation while minimising the negative effects of climate change on development,” the report said.

According to the report, leveraging climate action to promote economic development in Nigeria is not only realistic but also necessary. “Climate considerations can result in inclusive and sustainable growth when incorporated into economic development initiatives.”

The report recommended that the decarbonisation of the Nigerian economy will strongly depend on using natural gas as a transition fuel and the utilisation of renewable energy sources and other clean energy sources coupled with climate-smart sectorial measures such as energy efficiency and energy management measures. The notion of gas as a transition fuel is criticised by many, however.

Prioritising industry decarbonisation policies

Katlong Alex, an energy sustainability analyst at the African Energy Council, told Gas Outlook that enabling industry decarbonisation policies can significantly help reduce the carbon footprint of various economic sectors by implementing strategies and pathways that prioritise sustainability and cleaner practices. He said these policies play a crucial role in driving the transition towards a low-carbon economy and achieving net zero emissions.

“Implementing policies that focus on energy efficiency and resource optimisation can lead to significant reductions in carbon emissions. By promoting efficient processes and technologies, industries can lower their energy consumption and carbon footprint.

“Industries face increasing pressure from investors, consumers, and policymakers to decarbonise and align with environmental, social, and governance (ESG) commitments. Prioritising sustainable practices is essential for companies to comply with ESG regulations, meet investor expectations, and address consumer demand for environmentally-friendly products and operations. Setting regulatory standards and implementing carbon pricing mechanisms further incentivises industries to reduce their carbon emissions by encouraging investment in cleaner technologies and practices.”

However, Adedolapo Raji, an energy advisor at Lagos-based Thwaite Energy Limited, said Nigeria’s journey towards navigating the climate change landscape must be both strategic and inclusive. She said robust policy frameworks that prioritise and embed climate action into real economic sectors such as energy production, transportation, and agriculture, alongside clear and ambitious emissions reduction targets, and incentives for renewable energy deployment, are key.

“Increased investment in available renewable energy sources like solar, wind, and hydropower is imperative. Not only do they offer sustainable alternatives to fossil fuels, but they also promise to significantly slash our carbon footprint and engender energy efficiency measures. Upgrading infrastructure and adopting energy-efficient technologies across industries and transportation can lead to substantial emissions reductions.

“Awareness and education are key drivers that must incentivise education, investing in research and development, fostering collaboration between government, academia, and industry, and empowering communities to participate in decision-making processes are all critical components of this holistic approach. International cooperation and partnerships are vital for accessing climate finance, technology transfer, and capacity-building support. We need to actively engage in global climate negotiations and regional initiatives, sharing knowledge and resources to drive meaningful change,” she added.

Concerns over gas as a transition fuel

Alex raised concerns about using gas as a transition fuel. He said carbon emissions from natural gas make up a significant portion of the country’s total emissions, and fugitive emissions from the oil and gas sector remain a concern, impacting the environment and local communities.

“Nigeria’s transition plan relies heavily on natural gas, which is still a fossil fuel. This dependence on fossil fuels may hinder the country’s ability to achieve its net zero emissions goal and may not be aligned with the global trend towards renewable energy sources.

“Deploying natural gas plants requires significant infrastructure, like gas pipelines, which have long construction lead times and high financing costs. This poses challenges for African countries, including Nigeria, aiming to transition to cleaner energy sources within tight timeframes. There is a risk that investments in new natural gas projects in Africa, including Nigeria, may become stranded assets due to the rapid shift towards renewable energy sources globally. This could result in wasted resources that could have been directed towards developing renewable energy projects where Africa has a competitive advantage.”

He added that while natural gas can serve as a transition fuel, Nigeria needs to carefully consider the environmental impact, investment challenges, competitiveness, infrastructure requirements, risk of stranded assets, limited range of vehicles, dependence on fossil fuels, policy inconsistencies, energy poverty, and energy subsidies when relying on natural gas as a key component of its energy transition strategy.

Raji said that decarbonisation of the Nigerian economy will strongly depend on developing and enforcing regulations that mandate emissions reductions, pollution control, and the adoption of cleaner technologies across industries.

“The energy source is readily available and must be leveraged for developmental needs and economic productivity. However, it is important to be circumspect. Methane emissions from natural gas production and distribution can offset the corresponding climate benefits if not properly regulated and monitored. Moreover, over-reliance on natural gas may hinder investments in renewable energy and energy efficiency measures needed for long-term decarbonisation, so there has to be a sustainable balance,” she concluded.