• Natural Gas News

    Gas Must Fight its Corner in Europe: EC


Gas, green or otherwise, has no friends at court: the EC will give it no advantages over other fuels, as all the subsidies have gone.

by: Tim Gosling

Posted in:

Natural Gas & LNG News, Europe, Premium, Carbon, Renewables, Gas to Power, Corporate, Political, Gas for Transport, Market News, Infrastructure, Pipelines, News By Country, EU

Gas Must Fight its Corner in Europe: EC

Gas must raise its game and find a route to compete with other energy sources for a role in a decarbonised future, European Commission (EC) officials told industry delegates at the European Gas Conference in Vienna January 30. It cannot expect officialdom to do its work for it.

It’s the overriding long-term issue facing the industry. By 2050, to fit with the targets of the Paris Agreement, the European Union aims to cut CO2 emissions by 95% compared with 1990. Gas started out pushing for a role as the “clean” fossil fuel that can act as a bridge to that green future, replacing coal and achieving emissions reduction targets at a stroke; but realising just how short-sighted that is, the industry now hopes to secure a permanent role.

Judging from the comments in Vienna, the industry feels that the EC should be offering more encouragement, guidance and help in achieving that ambition. They got short shrift from EC officials invited to discuss those hopes.

“We’re looking into a strategy for the role of gas, but as a regulator we shouldn’t decide on which technology should win the race for the low emissions future,” said Florian Ermacora, head of the electricity & gas unit at the EC’s directorate for internal energy market.

“Don’t expect us to come up with a plan, or money,” he continued. “We don’t like subsidies. We’ve already spent so much. What we want to do is align a policy framework that will create a level playing field for all tech.”

That wasn’t enough for some.

“Why does the EC have no targets for green gas?” questioned one member of the audience. “Does that mean it has no role?”

“Green gas is renewables,” said Ermacora. “We have no target for wind, sun or renewable gas. We’re not picking the winners.”

Research, or die

In some ways, it’s little wonder that the gas industry is moving so slowly. Working out how to develop new technology, infrastructure and the finance for this clean new world is a daunting task. “The biggest obstacle to a decarbonised future is that there are too many options,” said Chris Walters of the Gas Strategies consultancy. “There’s not enough work being done on the different costs and choices.”

The trouble is those multiple different potential scenarios imply different kinds of investment, and those investments are needed -- if not right now -- then in the very near future.

 “If you don’t make the right choice then you’ll have a lot of distressed assets,” admitted Pierre Dechamps, an EC official in research and innovation, on another panel.

That has the industry unsure of where to go, but it needs to find out quickly said Walters. “2050 seems so far away, and the industry prefers to look at short term growth in demand, but it’s the frog in boiling water,” he suggested. The Brussels officials were also both keen to press the point that the gas industry must get on the front foot to find answers to the extensive list of persistent questions, rather than waiting for guidance from the EC.

While Brussels won’t be offering subsidies, they insisted, it is making money available for research. “We don’t know the answers right now. We have billions of euros ready to offer to support carbon capture and storage (CCS) research for example,” Ermacora said. “The gas industry has taken up none of it. We couldn’t find a good project. You guys need to take this seriously."

"Coupling gas with renewable power and CCS, or using it to produce hydrogen has potential,” stated Dechamps. “With all this, there’s a clear role for gas in a decarbonised future, but you need deep research into how all these options can work together.”

Failure to act is not option, the panellists stressed.

“We will reach the point that gas joins coal in emitting CO2 levels that are incompatible with Paris targets,” said Timm Kehler, chairman at Zukunft Erdgas, a lobby group of the German gas industry. The German government's coal commission had a few days earlier recommended the end of coal burn in power generation by no sooner than 2038. “Unless we can make gas a part of the energy future we’ll be the next to go. The German Green party is already talking about the gas phase out,” he said.

“If not coupled with CCS and other solutions gas will face a phase out within 20 years of that of coal,” Dechamps warned the audience. “That’s not a nice future for you.”