Despite big promises, Europe is acknowledging the importance of coal, as it continues to impose sanctions on Russian energy before having the necessary oil, gas or renewable alternatives ready to take its place. At the same time, the G7 is trying to help several Asian countries transition away from their coal dependency to less carbon-intensive alternatives. But can Europe continue its coal addition while telling others to stop producing the dirty fossil fuel? This month, Europe conceded that it will have to continue its coal production if it wants to meet the regional energy demand, as sanctions on Russian energy take their toll. The European Commission has launched a strategy, the REPowerEU plan, to increase its renewable energy production in order to reduce its reliance on Russian energy. However, it also stated that coal plants across the region may need to be running for “longer than initially expected.”
The Commission anticipates an additional $220 billion in investment in renewable energy developments over the next five years if it is to increase Europe’s renewable energy output to the amount required to speed up the clean energy transition. And it is now recommending the aim of 45 percent renewable energy by 2030.
While this demonstrates the EU’s commitment to the transition, the Commission expects the region will require up to $2.14 billion in financing to secure its crude supply, and a further $10.7 to meet its natural gas needs. With the supply of natural gas falling, EU climate chief Frans Timmermans stated “you might use coal a bit longer — that has a negative impact on your emissions.” But “if at the same time, as we propose, you rapidly speed up the introduction of renewables — solar, wind, biomethane — you then have the opposite movement,” he added.
This wording seems like a classic case of greenwashing, particularly as many European powers vowed to give up coal entirely long before 2030. But with consumer prices rising dramatically due to oil and gas shortages, there may be little available alternative in the mid-term.
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Just a few weeks ago, at the G7 talks in Berlin, Germany's Economy Minister Robert Habeck said that the G7 should play a leading role in the phasing out of fossil fuels, including coal, and encourage the transition to renewable alternatives. At this point, more countries across the region were discussing a return to coal to avoid damaging energy shortages. But, according to Reuters, a draft communique outlines the commitment from the G7 to phase out coal by the end of the decade – although a pushback was expected from the U.S. and Japan.
Habeck said that the sanctions being imposed on Russian energy should provide the “first step to quickly exit fossil fuel energy altogether.” John Kerry, the climate envoy for the U.S., also voiced his concern over the war’s interference with global climate goals. “It is absolutely critical, that we heed the science that dictates that we must accelerate our efforts for conversion to independence, to renewable energy,” he stated at the conference.
At the same time as the European Commission is starting its ongoing reliance on coal, the G7 is encouraging India, Indonesia, and Vietnam to reduce their dependence on coal power plants. The seven powers in the organization will establish a strategy to support developing countries in their plans to phase out coal. The G7 already pledged $8.5 billion in funding for South Africa to help it switch from coal plants to renewable alternatives. This initiative would see the expansion of the scheme across other regions. The scheme will receive additional financing from the Asian Development Bank (ADB).
While funding the transition away from coal to renewable energy developments is a positive step, the organization may appear someone hypocritical in its approach, with France, Germany, and Italy forming almost half of the G7. If EU countries cannot reduce their reliance on the dirtiest fossil fuel, it seems contradictory to ask several developing nations to do just that.
While there is a clear need to find a mid-term alternative to Russian oil and gas, Europe’s ongoing reliance on coal is a step backward in reducing global carbon emissions. Although the European Commission is positive that an increase in investment in renewable energy will help to create a balance, it appears to be greenwashing the detrimental effects of coal on the world’s carbon emissions. In addition, asking developing countries in Asia to substantially reduce their dependence on coal, while continuing to rely on it itself, is somewhat contradictory and may hinder the effort to encourage a worldwide movement away from coal.
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By Felicity Bradstock for Oilprice.com
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In order for the EU to formulate a rational energy policy, it has to accept the following realities:
1- Coal will continue to play a major role in satisfying the EU’s electricity demand well into the future.
2- The notions of total global energy transition and net-zero emissions are illusions.
3- The EU shouldn’t let its hatred of Russia at the moment blind its judgement. There is no alternative to Russian oil and gas supplies now or for the foreseeable future.
4- The EU should stop telling Asian users of coal particularly China to reduce their use of coal when itself is using coal to meet its energy demands.
5- The EU should accept that economics and energy security trump climate change and energy transition anytime of the day. They represent economic growth, jobs and food on the table for billions of people.
This doesn’t mean abandoning energy transition. It only means giving priority to addressing energy security concerns and investing in fossil fuels to satisfy rising demand for energy and ensure a smooth running of the global economy.
The overwhelming majority of world population view jobs and food on the table as being far more important than what may or may not happen to our planet a century or two from now. That is the crux of the matter.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London