Simon Stiell told investors at an event in New York that the efforts of many developing countries to adopt more renewables like solar and wind power “are hamstrung by sky-high costs of capital… or mired in spiralling debt crises”.

Because the “mega-trend” in clean energy is occurring unevenly, most investors are missing out on “gigantic, unrealised opportunities” outside of wealthy countries, he added, warning that this also poses a major threat to global action to curb climate change and avoid its worst impacts.

“I’ll be blunt: if more developing economies don’t see more of this growing deluge of climate investment, we will quickly entrench a dangerous two-speed global transition,” Stiell said.

UN climate chief calls for “exponential changes” to boost investment in Africa

Such an imbalance is both “unacceptable” and “self-defeating” for all economies, he emphasised. It would make halving global emissions by 2030 to keep warming in check “near impossible”, he explained, as well as causing havoc in international supply chains as extreme weather bites.

The disruptions experienced by businesses during the COVID19 pandemic “will seem like a minor hiccup compared to what an unchecked climate crisis will inflict” in an interdependent world economy, Stiell warned. “If a two-speed global transition sets in, ultimately everyone loses, and loses badly,” he added.

IEA weighs in

A report issued on Tuesday by the International Energy Agency (IEA), showing how to meet the energy transition goals agreed at last year’s COP28 climate summit, noted that advanced economies and China account for more than four out of every five dollars invested in clean energy since the Paris Agreement was signed in late 2015.

The IEA called for stronger and more stable policies to attract private investment in clean energy in other regions, together with larger, better-targeted international support spurred partly by a new climate finance goal due to be agreed at COP29 this November.

The agency also pointed out that, although governments are worried about how to make the energy transition socially acceptable, globally they are still spending nine times more making fossil fuels cheaper than on subsidising clean energy for consumers.

COP29 aims to boost battery storage and grids for renewables, as pledges proliferate

The report said that the COP28 goal of tripling global renewable energy capacity by 2030 is within reach – but meeting it will not automatically mean that more renewable electricity will clean up power systems, lower costs for consumers and slash fossil fuel use.

Achieving those aims will require complementary efforts to enable clean electrification – including building and modernising 25 million kilometres of electricity grids by 2030 and adding 1,500 gigawatts (GW) of energy storage capacity by that year, largely with batteries.

Fast-tracking a green future

With businesses and financiers gathered in New York for the annual Climate Week NYC, alongside leaders attending the United Nations General Assembly (UNGA), international agencies and green groups emphasised the need for concerted action by the public and private sectors to put internationally agreed energy targets into practice.

Fatih Birol, the IEA’s executive director, said the goals set at COP28 could put the global energy sector “on a fast track towards a more secure, affordable and sustainable future”. “To ensure the world doesn’t miss this huge opportunity, the focus must shift rapidly to implementation,” he added.

Other organisations also outlined key ways to make this happen. Mission 2025 – a coalition of businesses, sub-national governments and researchers, among others – appealed to governments to set “investment-positive policies” that can provide confidence to mobilise large-scale finance for the energy transition.

Using data from the Energy Transitions Commission, an international think-tank, Mission 2025 identified three such policies that have already worked in industralised countries and some large developing economies to help boost finance for renewables and electric vehicles.

It recommended fixing gigawatt targets for renewable energy deployment at the national level as the UK and India have done for example; derisking investment in renewable energy – by offering support such as competitive long-term contracts or tax credits – as in Europe, the India, China and the United States; and setting a date of 2035 or earlier to end sales of petrol and diesel passenger vehicles, as the European Union has done.

Global push to triple renewables requires responsible mining of minerals

Mission 2025 said these policies should be extended to other places, and could roughly double today’s investment in clean power and electric vehicles to $1 trillion of the $3.5 trillion needed annually for the energy sector to play its part in limiting warming to 1.5C.

Mike Hemsley, deputy director of the Energy Transitions Commission, told Climate Home these policies are as cheap as their fossil fuel equivalents, so there is no net cost to countries from implementing them as part of the updated national climate plans governments are now preparing – including for lower-income and emerging economies.

“We hope that this can give them some confidence to say if we set ambitious policy, we can attract private investment, realise some of our own goals and not necessarily cost ourselves anything – all for the good of the climate,” he said, adding that strong policies can also help lower investment risk in developing countries.

Renewables cheaper than fossil fuels

Research released on Tuesday by the International Renewable Energy Agency (IRENA) at the Global Renewables Summit during UNGA showed that with renewable power capacity additions setting a record of 473 gigawatts in 2023, four-fifths of newly commissioned, utility-scale renewable projects had lower costs than their fossil fuel-fired alternatives.

Power from solar photovoltaic (PV) panels, it found, has seen its cost plummet to around $0.04 per kilowatt hour in just one year, making it 56% cheaper than fossil fuel and nuclear options in 2023. Overall, the renewable power deployed globally since 2000 has saved up to $409 billion in fuel costs in the power sector, IRENA added.

“Thanks to low-cost renewables in the global market, policy makers have an immediate solution at hand to reduce fossil fuels dependency, limit the economic and social damage of carbon-intensive energy use, drive economic development and harness energy security benefits,” IRENA’s Director-General Francesco La Camera said in a statement.

(Reporting by Megan Rowling, editing by Joe Lo)

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A few years ago, the world was on a path to ending coal, the most carbon-intensive fossil fuel and the single biggest contributor to carbon dioxide emissions. Active and sustained campaigning brought coal closer to the point of death and the world to a coal-free future.

Several developments made this evident. One, the shrinking of the pipeline of new coal and the shutting down of hundreds of coal projects across the globe. Two, the commitment of 44 governments to end the construction of new coal plants and cancellation by a further 33 countries of new coal projects. Three, the shifts in the policies of several public financial institutions and private banks to either wind down or immediately end coal financing. And four, the emergence of cheaper renewables that downgraded new investments in coal as a costly mistake.

Since 2015, more than half of countries with coal power have reduced or kept their operating capacity flat. In addition, announced, pre-permit, permitted and construction coal capacity was reduced by 68% globally. From 2015 to 2021, changes in the global pipeline of proposed coal power plants showed a 76% collapse in coal construction.

Fossil fuel transition back in draft pact for UN Summit of the Future after outcry

There was broad consensus that coal power generation must be rapidly phased out to reduce emissions significantly and, consequently, the risks and impacts of climate change. Anti-coal campaigns hounded corporations on the terrible economics of coal-based energy. They successfully pressured hundreds of firms to stop financing or pull back investments in coal or issue policies to limit exposure to coal. They also made coal uninsurable.

A litany of research and analysis of the implications of coal combustion on climate targets echoed the pressure. According to a 2021 report from the International Energy Agency (IEA), to meet the goals of the Paris Agreement, coal phase-out must take place in advanced economies by 2030 and in the rest of the world by 2040. An assessment model exploring the implications of the 2C temperature limit has found that, globally, over 80% of current coal reserves should remain unused from 2010 to 2050 to meet the 2C target.

Conflict boost for coal

Despite all of this, coal is rising again today, driven by demand growth and operating capacity increases in developing and emerging economies. Global coal use and capacity rebounded in 2022 and grew to an all-time high in 2023. Total global capacity in pre-construction also increased by 6% in 2023.

The demise of coal, as it turns out, is a lot of gas, literally and figuratively.

Climate campaigners marched to Mendiola Street, near Malacanang Palace in Manila, on Sept 13, 2024, calling out the Philippines energy department and President Marcos for allowing coal expansion despite a 2020 moratorium. The protesters demanded an end to new coal and rapid phaseout of all coal by 2035. (Photo: APMDD)

The failure of governments to rapidly shift to renewable energy is key to coal’s staying power. The energy crisis caused by the war in Ukraine triggered a buying frenzy for coal and gas, driving prices to record levels. Asian countries increased coal production to secure energy supply. Some European countries brought mothballed coal-burning power plants back online or removed caps on production at coal-fired plants.

No wonder fossil fuels still dominated global energy demand in 2022, with coal holding 35% of the share in the power sector. This, despite a massive renewables growth of 266 gigawatts – the highest growth ever – bolstered by solar and wind.

Asia is the hotbed of both coal resurgence and fossil gas expansion. China, India and Indonesia already account for more than 70% of the world’s coal production. India and China, both of which have adopted aggressive renewables targets, are substantially using more coal and are poised to increase their coal use significantly in the coming years.

Finance flows to fossil fuels

The world’s top commercial banks are mainly responsible for the global flow of funds for new coal in Asia. These banks are headquartered in rich countries like the US, Canada and the UK that have not built a new coal plant within their countries for years. At the same time, major Asian banks are now playing a growing role in coal expansion in the region. Having weak or non-existent exclusions on coal, these banks are creating new coal financing “havens” in the region.

The same is true for the flow of finance for the gas build-out. The major players are the world’s top commercial banks, major Asian banks and public financial institutions. Japan’s megabanks and state-bank Japan Bank for International Cooperation (JBIC) lead the world’s biggest financiers of Southeast Asia’s gas expansion.

EU “green” funds invest millions in expanding coal giants in China, India

Over 60% of global gas-fired capacity in development is based in Asia. Governments are pursuing the gas build-out to ostensibly meet growing energy demand while turning away from coal. Current gas expansion plans in Southeast Asia could lead to a doubling of gas-fired power capacity and an 80% increase in LNG import capacity. This would lock the region into an economically volatile fuel that is dangerous for people and the climate.

Alongside the planned expansion of gas power, coal’s resurgence will be massively detrimental to climate goals. It also draws investment away from the transition to renewable energy. Coal and gas will not deliver affordable, reliable, sustainable and clean energy in Asia, where millions suffer from energy poverty.

Renewables have become the cheapest and fastest-growing source of electricity worldwide, with annual capacity additions more than doubling from 2015 to 2022. We must replace coal with renewables – not with dirty, inefficient, volatile energy sources like gas.

On September 13, climate activists are holding mobilisations in over 50 countries on all continents calling for a fast, fair and funded phase-out of fossil fuels and the delivery of climate finance. These kick off a Global Week of Action for Climate Finance and a Fossil-Free Future ahead of Climate Week NYC (September 22-29) when world leaders assemble for the UN General Assembly and the first UN Summit of the Future where they will agree a Pact for the Future. For details of the actions: https://payupandphaseout.org

The post The demise of coal, as it turns out, is a lot of gas appeared first on Climate Home News.

Dear COP29 President-Designate Babayev, 

My name is Joseph Sikulu, and I am Tongan. Last week you visited my home island, where your team witnessed torrential rains and an earthquake. You witnessed how susceptible our people are to disasters, and how prepared we must be to meet them.

The escalating climate crisis exacerbates already destructive disasters and last week, as COP29 President-Designate, you met with the UN Secretary-General here in Tonga and acknowledged our realities. You made a commitment to amplify the voices of the Pacific Islands and build a more resilient, sustainable future ahead of COP29.

But the time for amplifying our voices is over. We need action. Fossil fuels are at the root of this crisis, fossil fuels threaten our islands.

Despite being confronted with devastating climate impacts, and the prospects of many more, we gathered in solidarity for the Pacific Islands Forum Leaders Meeting. We fight. And if we fight, we expect the same from you.

Fossil fuel transition back in draft pact for UN Summit of the Future after outcry

The Pacific has done the least to contribute to the climate crisis, yet we are fighting it the hardest. Pacific island countries have committed to achieving net zero by 2050 and 100% renewable energy targets. A transition to renewables means hope and survival.

If we can do it, so can you. As the next COP President, it is your duty to demonstrate leadership. In a letter to country delegations you called on them to deliver 1.5C-aligned NDCs and committed Azerbaijan to doing the same. But keeping 1.5 alive means no fossil fuel expansion.

Yet, this year, your president, Ilham Aliyev, called fossil fuels “a gift from the gods”. For us in the Pacific, such words aren’t just careless — they’re cruel. Our very homes are at risk, and keeping our Pacific homes means no fossil fuel expansion.

‘No more empty words’

Currently, Azerbaijan does not lead. Azerbaijan is nowhere near 1.5-aligned. Your climate goal uses accounting tricks to continue business as usual. You speak of “reducing emissions by 40% compared to 1990 levels by 2050”. However, your emissions were much higher in 1990 than they are in the twenty-first century. We need to completely phase out fossil fuels by 2050. Your climate goal is to do nothing while you plan to expand fossil fuels for exports.

Instead of holding the fossil fuel industry to account, you have presented a greenwashing fund to allow industry to continue with business as usual. The fund masks the ongoing expansion of fossil fuel production by SOCAR, your state oil company which is set to be the first to contribute. The $1-billion fund will operate at market rates instead of concessional finance, a pitiful gesture when set against the colossal sums needed for genuine climate action and reparations – a cynical attempt to distract from your country’s destructive environmental practices.

Leaders are cutting fossil fuel finance – next comes unlocking clean energy for all

We can’t afford any more empty words. The world needs you to lead it towards an ambitious and fair new collective finance goal at COP29 to facilitate the global energy transition. We need real, new and transparent finance, coupled with a global effort, particularly on behalf of countries in the Global North and those, like yours and Brazil, that will host international climate summits. It’s your responsibility to make sure that COP29 results in meaningful climate finance commitments and the financial resources to swiftly transition away from fossil fuels for good, with justice, equity and respect at the forefront.

We have neither the time nor the patience for more scams, or games of smoke and mirrors like your greenwashing fund. To keep global warming below 1.5C, we need a full and immediate phase-out of fossil fuels – period.

Azerbaijan must step up with ambitious climate goals before November, especially if it seeks to be seen as a respected climate host. Real climate leadership is not optional; it’s a prerequisite for hosting climate summits – and so should be respecting and upholding human rights and civic space. Now is the time to make real commitments – and to deliver on them.

The post As Pacific Islanders, we need climate action – not greenwashing – from Azerbaijan appeared first on Climate Home News.

The U-turn comes after nearly 80 Nobel prizewinners and world leaders hit out at the deletion of any references to fossil fuels in a previous version of the negotiating text for the Summit of the Future taking place in New York during this year’s UN General Assembly.

The UN has billed the high-level event as a “once-in-a-generation opportunity to reinvigorate global action” on issues including climate change, sustainable development and peace. Member states are expected to agree on an “ambitious, concise and action-oriented” pact seen as a blueprint for boosting multilateral cooperation.

In the latest draft, published on Thursday, world leaders “decide to […] transition away from fossil fuels in energy systems in a just, orderly and equitable manner, so as to achieve net zero by 2050 in keeping with the science”.

The language closely mirrors the landmark agreement struck at the COP28 climate conference in Dubai last year with the exception of a call to “accelerating action in this critical decade” which is absent from the draft.

The new Pact for the Future draft “cements the [COP28] commitment”, according to Alex Rafalowicz, executive director of the Fossil Fuel Non-Proliferation Treaty Initiative. “If the language stays, it’s clear there’s no going back. This is a first step, but declarations alone will not suffice. We need to build on this outcome with immediate, decisive action and concrete plans.”

Controversy over fossil fuels

UN Secretary-General António Guterres first proposed the Summit of the Future back in 2021 when he laid out his vision for global cooperation in the coming decades. The gathering will bring together governments, UN agencies, civil society organisations, academic institutions and the private sector on September 22 and 23.

Governments have been negotiating the text of the pact for nearly a year, with Germany and Namibia coordinating efforts as co-facilitators of the summit.

Last January they released a “zero draft” based on member states’ initial inputs and submissions from civil society, academia and the private sector. It included a reference to countries “accelerating the transition away from fossil fuels in energy systems”.

But any mention of fossil fuels disappeared from a second draft published in mid-July following another round of consultations.

Leaders are cutting fossil fuel finance – next comes unlocking clean energy for all

That prompted strong condemnation from climate action leaders. In a letter to governments, Nobel Prize laureates – including Bangladesh’s new interim leader Muhammad Yunus and former Irish President Mary Robinson – said they were “gravely concerned” about the absence of any mention of fossil fuels, which they called “one of the greatest threats facing the world today”.

The burning of coal, oil and gas is the main source of greenhouse gas emissions causing global warming. Any pathway to limit warming to the Paris Agreement goal of 1.5C requires a significant decline in the use of fossil fuels by 2050, according to the Intergovernmental Panel on Climate Change.

Backslide fears

In addition to a shift away from fossil fuels, the latest Pact for the Future draft also follows in the footsteps of the COP28 agreement in calling for an acceleration in the “development and deployment” of renewable energy and “other zero and low-emission technologies”.

While the Summit of the Future text does not qualify these technologies, the Dubai deal explicitly referred to nuclear energy, as well as emissions abatement and removal technologies such as carbon capture and utilization and storage (CCUS).

Sultan Al Jaber and Simon Stiell celebrate as the Cop28 agreement is passed (Photos: Cop28/Mahmoud Khaled)

The COP28 agreement adopted by nearly 200 countries was widely hailed as a historic achievement signposting an end to the fossil fuel era. But climate campaigners have since grown worried that countries are backsliding on their promises and attempting to weaken their commitment to wean the world off dirty energy.

Saudi Arabia’s energy minister Prince Abdulaziz bin Salman Al-Saud, for example, claimed last January that the transition away from fossil fuels was just one of several “choices” on an “à la carte menu” offered by the COP28 pact.

Romain Ioualalen, global policy lead at Oil Change International, told Climate Home that any attempt to weaken or reverse the COP28 decision “is like playing a losing hand with billions of lives that would put any chance of avoiding a 1.5C breach out of reach”.

“Civil society should not have to be the fighting voice of reason to keep fossil fuel phase-out on the table and align international declarations with science,” he added.

(Reporting by Matteo Civillini; editing by Megan Rowling)

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Environmental advocacy group Stand.earth accused the Vancouver-based apparel company of greenwashing in a “first-of-its-kind complaint” submitted to the French Directorate General for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) days before the Olympics Games opening ceremony in Paris.

Stand.earth has called on the French regulator to investigate Lululemon’s “vague, disproportionate and ambiguous” environmental claims which, the green group said, constitute misleading commercial practices. In response, the company told Climate Home its publicity does not misrepresent its operations.

Through its “Be Planet” campaign unveiled in 2020, Lululemon tells customers that its “products and actions avoid environmental harm and contribute to restoring a healthy planet”.

A screengrab from Lululemon’s sustainability webpage

But the company’s latest impact report shows that emissions from Lululemon’s full supply chain – known as Scope 3 – nearly doubled to 1.2 million tonnes of carbon dioxide between the campaign’s launch and 2022. That’s equivalent to powering 300,000 gasoline cars for a year.

Stand.earth’s complaint said Lululemon’s emissions are set to grow even further as it tries to hit a goal of doubling sales by 2026.

“Lululemon customers worldwide deserve to know the true impacts of the company’s climate pollution, not the greenwashed version it uses to sell products,” said Stand.earth Executive Director Todd Paglia.

UAE’s ALTÉRRA invests in fund backing fossil gas despite “climate solutions” pledge

Earlier this year, Stand.earth filed a similar complaint against Lululemon in Canada that resulted in the country’s Competition Bureau opening a formal investigation into the retailer’s use of environmental claims. A separate complaint accusing Lululemon of greenwashing was brought in early July this year by a private citizen in the US District Court for the Southern District of Florida.

A spokesperson for Lululemon said that Be Planet “is not a marketing campaign” but “a pillar” of the company’s impact strategy, and that the firm is confident the statements it makes to the public accurately reflect its impact goals and commitments.

“We are taking direct action and are committed to collaborating with industry partners to help address supply chain impacts on climate change,” the spokesperson added. “We welcome dialogue and remain focused on driving progress.”

Rising revenues, rising emissions

Lululemon is one of the world’s fastest-growing retailers of athletic apparel, with net revenues rising 19% to $9.6 billion in 2023. The company, which has more than 700 stores in 20 countries, is the official clothing provider for Team Canada at the Olympic Games whose opening ceremony takes place in Paris this Friday.

According to the International Olympic Committee (IOC), the Paris 2024 Games are targeting a 50 percent reduction in carbon emissions compared to the average of the London Olympics in 2012 and Rio de Janeiro in 2016, including Scope 3 emissions such as from spectator travel. This means Paris 2024 will offer the first Olympic Games aligned with the Paris Agreement on climate change, the IOC says.

View of Lululemon name above its retail store in the SoHo neighborhood of Manhattan, New York, NY, August 2, 2023. (Photo by Anthony Behar/Sipa USA)

Lululemon, meanwhile, has committed to reaching net zero emissions across its supply chain by 2050 through a target validated by the Science Based Targets initiative (SBTi), widely seen as the gold standard in corporate accountability.

But the company has come under intense criticism from green advocates over its climate and environmental impacts caused by energy-intensive production, high consumption of natural resources like water and long-distance shipping of items around the globe.

Four-fifths of Lululemon’s manufacturers in 2022 were located in countries that are highly-dependent on fossil fuels like Vietnam, Cambodia, Sri Lanka and Indonesia. The materials most commonly used by Lululemon in its clothes – polyester and nylon – are themselves produced from fossil fuels, according to the Stand.earth complaint.

EU greenwashing crackdown

The environmental group said the case will mark the first test of the French regulator’s readiness for a wave of new European greenwashing legislation.

The European Parliament approved a new directive in January requiring member states to introduce stricter rules surrounding the use of sustainability claims by companies and banning certain practices.

European lawmakers are currently working on a further piece of legislation that aims to define what kind of information companies must provide to justify their green marketing in the future. In its current form, the proposed regulation would require sustainability claims to be based on scientific evidence and checked by an independent and accredited verifier.

A global wealth tax is needed to help fund a just green transition

The so-called “Green Claims” directive is currently going through a negotiation process between the European Parliament and the European Council – which brings together EU leaders – before a final text is agreed.

“For decades, companies have faced no consequences for deceptive practices aimed at misleading the public about their environmental and climate justice impacts,” said Stand.earth’s Paglia. “However, we’re now seeing a rising interest in holding these companies accountable for their claims, and a crackdown is beginning to happen from Europe to North America.”

(Reporting by Matteo Civillini; editing by Megan Rowling)

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ALTÉRRA was billed as the world’s largest private investment vehicle to “focus entirely on climate solutions”. COP28 President Sultan Al-Jaber hailed its launch as “a defining moment” for creating a new era of international climate finance.

Yet four months later, one of the initial funds ALTÉRRA backed with a $300-million commitment agreed to buy a major fossil gas pipeline in North America, Climate Home has discovered.

In March, BlackRock’s “Global Infrastructure Fund IV” acquired half of the 475 km-long Portland Natural Gas Transmission System, with Morgan Stanley taking the rest in a deal worth $1.14 billion overall.

That acquisition would not have come as a surprise to the fund’s investors.

When US-based BlackRock pitched it to the State of Connecticut’s Investment Advisory Council back in 2022, the world’s biggest asset manager gave a flavour of where their money would likely end up. Its presentation – seen by Climate Home – featured a list of “indicative investments” including highly-polluting sectors such as gas power plants and transportation networks, liquefied natural gas (LNG), airports, terminals and shipping.

Climate Home does not know whether ALTÉRRA saw the same presentation, nor did the UAE firm respond directly to a question asking if it was aware before the COP28 announcement that the BlackRock fund might invest in those sectors.

An ALTÉRRA spokesperson told Climate Home its “investments seek to build the energy systems of tomorrow, while supporting the transition of existing energy infrastructure towards a just and managed clean energy ecosystem”.

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In addition to the gas pipeline, BlackRock’s infrastructure fund has so far invested in carbon capture, waste management, utilities maintenance services, telecom infrastructure, data centres and the production of industrial gases, according to regulatory filings, a BlackRock job advertisement and press reports accessed by Climate Home.

A BlackRock spokesperson said its global infrastructure fund franchise “targets investments in solutions across the energy transition value chain, driven by the long-term trends of decarbonization, decentralization, and digitalization to support the stability and affordability of energy supply around the world”.

Andreas Sieber, associate director of global policy and campaigns at climate advocacy group 350.org, said Climate Home’s findings “confirm our worst fears”. “The ALTÉRRA fund uses a masquerade of green progress while funnelling investment into fossil fuel pipelines and gas projects, which are the biggest causes of the climate crisis,” he told Climate Home.

Climate finance is a hot topic at UN negotiations, with countries expected to set a new global goal at COP29 in Baku, Azerbaijan, this November, amid persistent calls for higher amounts to help poorer nations boost clean energy production.

The COP28 presidency said last year that ALTÉRRA would “drive forward international efforts to create a fairer climate finance system, with an emphasis on improving access to funding for the Global South”. Al-Jaber added that “its launch reflects… the UAE’s efforts to make climate finance available, accessible and affordable”.

But the sparse details provided at the time prompted climate justice activists to question the real impact it would have in countries that most need financial support to adopt clean energy and adapt to a warming world. Only about a sixth of the fund – $5 billion – was earmarked as “capital to incentivize investment into the Global South”.

Follow the money

ALTÉRRA is a so-called ‘fund of funds’. Instead of directly investing money in individual companies or assets, it puts its cash into a series of funds run by other investment firms. At COP28, it committed a total of $6.5 billion to funds managed by BlackRock, Brookfield and TPG, without setting out how the remaining $23.5 billion would be spent.

Since then, ALTÉRRA has not announced any further investments. Its chief executive, Majid Al Suwaidi, told Bloomberg this month that the fund is “actively planning the next phase of allocations”, without giving further details.

The launch of #ALTÉRRA marks the start of three unique alliances with global asset managers, @Brookfield, @BlackRock, and @tpg.

Together, we share the same vision, to bridge the climate investment gap and finance a new climate economy. pic.twitter.com/7yEXOyZqpK

— ALTÉRRA (@Alterrafund) December 1, 2023

Most of the funds picked by ALTÉRRA remain at an early stage and have yet to announce completed transactions or are still trying to raise more capital from investors. The most notable exception is BlackRock’s fourth Global Infrastructure Fund. By the time it won the $300-million commitment from ALTÉRRA in Dubai, the vehicle was ready to deploy its money.

ALTÉRRA told Climate Home its investment in the BlackRock vehicle is in line with its goals of getting climate finance “flowing quickly and at scale” and of partnering “with funds that invest in the energy transition and accelerate pathways to net-zero”.

Announcing its first $4.5-billion closing in October 2022, BlackRock said the fund would “continue to target investments in climate solutions, while also supporting the infrastructure needed to ensure a stable, affordable energy supply during the transition”.

In private conversations with potential investors, the asset manager spelled out more clearly what that meant.

Its presentation to the State of Connecticut in December 2022 showed that the fund would not only invest in things like renewable energy, electrification and battery storage, but also in fossil gas power plants and pipelines, LNG and transportation infrastructure like airports, shipping and terminals.

A slide from BlackRock’s presentation of the Global Infrastructure Fund IV to investors

In line with this strategy, BlackRock agreed a deal this March for its Global Infrastructure Fund IV to acquire half of the Portland Natural Gas Transmission System (PNGT), a fossil gas pipeline stretching from the Canadian border across New England in the United States to Maine and Massachusetts.

When it began operations in 1999, the pipeline helped shift New England’s power generation away from coal and oil, but it has also created a stronger dependency on fossil gas, leaving citizens vulnerable to price spikes. The region is now planning to accelerate the rollout of renewable energy sources.

Comment: To keep its profits, Big Oil stole our future

The PNGT was not the first fossil fuel infrastructure the BlackRock team behind the Global Infrastructure Fund had snapped up. In a written testimony submitted this March to the State of New Hampshire, a senior executive listed a dozen oil and gas pipelines backed by earlier rounds of the fund. They included one operated by ADNOC, the UAE state-owned oil company whose CEO is Sultan Al-Jaber, COP28 president and chair of ALTÉRRA’s board.

Responding to Climate Home’s findings on where ALTÉRRA’s money is going, Mohamed Adow, director of Nairobi-based think-tank Power Shift Africa, said it is “extremely concerning to see a fund hailed by a COP president as a solution to the climate crisis investing in fossil fuels”.

“This needs to be a wake-up call to the world that these funds created by COP hosts are little more than PR stunts designed to greenwash the activities of fossil fuel-producing nations,” he added.

Oil-backed carbon capture

BlackRock does not disclose the infrastructure fund’s complete portfolio, but it has invested another $550 million in Stratos, the world’s biggest direct air capture (DAC) project being developed in a joint venture with oil giant Occidental. The plant under construction in Texas promises to suck as much as 500,000 tonnes of carbon dioxide out of the atmosphere annually and bury it underground.

Its proponents see DAC as a key technology to balance out emissions in the race to achieve net zero by 2050, although so far it remains expensive and largely unproven at scale. Stratos won a grant from the US government to fast-track the construction of the facility, and it has struck deals to sell carbon offsets generated in future from the plant with corporate giants like Amazon.

Scottish oil-town plan for green jobs sparks climate campers’ anger over local park

When the DAC partnership was announced last November, BlackRock CEO Larry Fink said Stratos “represents an incredible investment opportunity for BlackRock’s clients… and underscores the critical role of American energy companies in climate technology innovation”.

But Stratos’ critics have questioned Occidental’s motivations and dismissed its DAC investments as a greenwashing ploy to keep pumping oil and slow down the transition away from fossil fuels.

“We believe that our direct capture technology is going to be the technology that helps to preserve our industry over time,” Vicki Hollub, Occidental’s chief executive, told the CERAWeek energy industry conference last year. “This gives our industry a license to continue to operate for the 60, 70, 80 years that I think it’s going to be very much needed.”

Call for safeguards

While BlackRock’s infrastructure fund deploys its cash largely in the Global North, ALTÉRRA’s promised investments in developing countries are still taking shape.

Brookfield in June launched a new “Catalytic Transition Fund” backed by ALTÉRRA with a $1-billion commitment. The fund’s stated focus is “directing capital into clean energy and transition assets in emerging economies”.

Climate Home asked ALTÉRRA if it had adopted any exclusion policies that would, for example, rule out investment in certain types of fossil fuels.

The UAE fund did not respond to the question, but a spokesperson said its investment approach is aligned with the goal “of accelerating the climate transition, with a focus on clean energy, industry decarbonization, sustainable living, and climate technologies”.

Climate activists protest against fossil fuels during COP28 in Dubai in December 2023. REUTERS/Thomas Mukoya

350.org’s Sieber called on Al-Jaber – who was widely criticised by green groups for his dual role as president of COP28 and head of a fossil fuel corporation – to “act swiftly to enforce stringent safeguards” for ALTÉRRA’s investments.

“The UAE is on the brink of losing the little credibility it still has left in addressing the urgency of the climate emergency,” Sieber added. “The world, especially communities who are being hit the hardest by climate impacts every day, cannot afford to have one more cent invested in fossil fuels.”

The key question now is whether Azerbaijan – the host of COP29 and itself a substantial producer and exporter of oil and gas – will do things differently. Last week, it announced a new voluntary fund that it said will invest at least $1 billion for emissions reduction projects in developing countries. Baku is hoping to secure contributions for it from fossil-fuel producing nations and companies.

Power Shift Africa’s Adow said developing countries need state-backed climate finance from rich nations, negotiated through the UN climate process, and “not just cooked up in voluntary schemes”. That funding “can be used where the need is greatest, not just where it might make most money for some private profit-seeking businesses,” he added.

(Reporting by Matteo Civillini; fact-checking by Sebastián Rodríguez; editing by Megan Rowling and Sebastián Rodríguez)

The post UAE’s ALTÉRRA invests in fund backing fossil gas despite “climate solutions” pledge appeared first on Climate Home News.

But now it is becoming the end-point for the East African Crude Oil Pipeline (EACOP) where, after a journey of over 1,400 km through Uganda and Tanzania, the oil is stored and put onto ships bound for customers abroad.

EACOP is a joint venture between French multinational TotalEnergies, the China National Offshore Oil Corporation and the governments of Uganda and Tanzania. It plans to bring oil from the Tilenga and Kingfisher oil fields near Uganda’s Lake Albert, down past Lake Victoria and all the way east through Tanzania to the Chongoleani Peninsula.

While the $4-billion project promises economic growth and energy security for the region, it has sparked protests due to its negative environmental, economic and social impacts – which have been met by crackdowns on the part of the authorities in both countries.

East African climate activists have joined forces with their international counterparts in a campaign called #StopEACOP, arguing that the pipeline will exacerbate climate change by transporting 246,000 barrels of oil a day to customers to burn, releasing greenhouse gases. They also warn that it will displace thousands of people and endangers water resources, wetlands, nature reserves and wildlife.

The Ugandan government says that it has the right to exploit the country’s fossil fuel resources in order to fund much-needed economic development and is taking measures to reduce the project’s climate impact, such as heating the pipeline with solar energy. Wealthy nations like the US, Canada and Australia, meanwhile, are also increasing fossil fuel production.

Living “like town dwellers”

In Tanzania, Chongoleani residents said they had been warned by the village chairman and other ward leaders not to talk to journalists, but Climate Home spoke to two whose land had been taken over by the government for the pipeline and its port.

Without adequate compensation, they said they had been unable to buy a new farm in the area and have to buy food from the city rather than growing their own and selling the surplus.

Mustafa Mohammed Mustafa said his family used to own two farms in Kigomeni village, together about as big as eight football pitches. On these, they grew coconut, cassava, corn and groundnuts. They ate some of it and sold the rest.

But with the pipeline coming, the government-owned Tanzania Ports Authority took over their land, compensating them with 15m Tanzanian shillings ($5,700), which hasn’t been enough for them to buy new farmland in the area.

“We live like town dwellers these days,” said Mustafa. “We buy firewood, we buy charcoal, we buy lemons, coconut, cassava. We buy all of these supplies from the city centre. How is this alright?”

House prices soar

Part of the reason they cannot afford a farm, says Mustafa, is that EACOP’s arrival has increased the price of local land, as it is considered a project area with potential for business investment.

Villagers either put a high price on their land or hold onto it and only accept offers from the government or foreign investors, according to Mustafa, believing this will get them a better deal.

A sign for Chongoleani oil terminal (Photo: Climate Home News)

Mustafa blames the government for not giving them proper information from the initial stages of the project, nor a choice about whether they wanted to sell their property. Instead, he said, they were told that the project is of great economic importance for the country.

“I am angry that the government took advantage of our ignorance of legal matters and gave us a bad deal that we couldn’t argue against,” Mustafa said.

Sitting alongside Mustafa in Chongoleani village, Mdiri Akida Sharifu said he regrets selling his family’s land in Kigomeni but they had no other option.

“At the moment, we have very little faith that this will benefit us. When government officials came here, they encouraged us to give up our land with the promise that once the project started, we would be given priority in getting jobs. But now that we’ve given up our land, we even have to buy lemons from Tanga town,” he said.

Countrywide compensation battles

Elsewhere along the pipeline’s routes, landowners have complained about unfair compensation, saying the government paid them in 2023 using price estimates made in 2016, ignoring seven years of inflation. Kamili Fabian from the Manyara region told local paper Mwananchi that he was paid less than a third of his land’s value. “Where is the justice in that?” he asked.

The government says it uses national and international standards to compensate people fairly. Energy minister Doto Biteko has said 35bn shillings ($13m) had been allocated for this purpose and the government had built 340 new homes for relocated people.

Reporting on these issues is a challenge. When Climate Home visited the coastal village of Putini, a man called Mahimbo – who would only give one name – refused to comment on the compensation process and said local leaders had told the villagers not to speak to journalists about the pipeline.

But he took Climate Home to the office of village chairperson Abdallah Said Kanuni to seek permission to comment on the record. “We have been given clear instructions to neither speak with journalists nor allow them to interview villagers on matters relating to the pipeline, unless the journalists have official permits from the regional [government] office,” Kanuni said.

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Compensation battles are playing out far beyond this area.  A Total spokesperson told Climate Home nearly 19,000 households have been compensated for the effects of the pipeline and the associated Tilenga oil field on them and about 750 replacement houses have been handed over.

But Diana Nabiruma, communications officer for the Africa Institute for Energy Governance (AFIEGO), said her organisation had spoken to hundreds of people who had received compensation and had yet to meet any that said it was adequate.

She said a major problem has been that people were paid in 2023 based on their land’s value in 2019. As in Chongoleani, the price of land rose in those four years, partly because of EACOP and the promise of paved roads. Many people have not been able to replace the property they lost, she said.

Ugandan riot police officers detain an anti-EACOP activist in Kampala, Uganda, on October 4, 2022. (REUTERS/Abubaker Lubowa)

Nabiruma added that many people want to seek top-up compensation but are scared – and unable to afford – to challenge EACOP and the government in court. In Uganda’s capital Kampala, police have beaten and arrested activists protesting against the pipeline.

The Total spokesperson said EACOP will improve living conditions, adding that Total complies with local regulations and international standards and there is a fair grievance management mechanism in place for local people.

An EACOP spokesperson said that since last year, the project has provided households affected by leasing of their land in Chongoleani with food baskets and cash transfers, adding that the villagers are given preferential access to unskilled or semi-skilled work on the project.

The Tanzania Ports Authority did not respond to a request for comment.

(Reporting by CHN staff and Joe Lo, editing by Joe Lo and Megan Rowling)

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On Sunday President Cyril Ramaphosa appointed ministers from his ANC party and the pro-business opposition Democratic Alliance (DA) to serve in his “government of national unity”.

In one of the most significant changes, Ramaphosa took away pro-coal minister Gwede Mantashe’s control of the energy sector. Hilton Trollip, a Cape Town University energy researcher, told Climate Home that Mantashe had previously “paralysed” the government’s renewables programme.

The Department of Mineral Resources and Energy has now been split in two. Mantashe is only keeping control of mining and hydrocarbons, while the ANC’s Kgosientsho Ramokgopa, previously the electricity minister, will now be in charge of setting energy policy with a wider mandate. 

EU “green” funds invest millions in expanding coal giants in China, India

Trollip said it was unclear if Ramokgopa would boost renewables as he has not held much power until now. But there is now a better chance that Mantashe’s highly contentious Integrated Resource Plan – which envisages a slowdown in renewable energy investments and a switch to gas-fired power – will be revised, he added.

DA’s Dion George is the new environment minister replacing Barbara Creecy, who has been moved to transport.

Creecy played an active role in several COP climate talks, most importantly successfully proposing a global goal on adaptation at COP26 in 2021. 

JETP talks

Owing to its heavy reliance on coal for electricity, the country is Africa’s biggest emitter of greenhouse gases. 

That made it a prime candidate for a world-first funding agreement, backed by wealthy nations, aimed at ramping up investments in clean energy while also protecting those reliant on the fossil fuel sector.

But two and a half years after it was announced, the now $9.3 billion “Just Energy Transition Partnership” (JETP) has made little tangible progress on the ground. 

Meanwhile, as the country grapples with rolling blackouts, state-owned utility Eskom has announced plans to delay the decommissioning of at least three of its coal-fired power plants by several years  – raising the risk that funding partners will walk back on their offers.

A general view of Kendal Power Station, a coal-fired station of South African utility Eskom, in the Mpumalanga province. REUTERS/Siphiwe Sibeko

Kevin Mileham, the DA’s shadow minister of mineral resources and energy, told Climate Home that South Africa’s JETP “will need to be accelerated” as the country is currently not on track to meet global climate goals.

The party wants to see “a rapid roll out” of the programme which will require improved dialogue with the wealthy European and North American countries funding part of it, he added.

It also wants to advance the implementation of a climate change adaptation strategy and believes South Africa needs to do a better job at tracking and reporting its efforts to reduce carbon emissions, Mileham said.

Much of the progress will hinge on the government’s ability to form a united front on foreign policy and forge an effective relationship with the international funding partners.

The ANC and DA have regularly clashed on international affairs, such as the country’s support to Palestine.

They will need to “reconcile their differences [on foreign policy] and come to a shared understanding on international multilateral processes,” says Happy Khambule, energy and environment policy director at Business Unity South Africa, a business lobby group.

Tensions over private sector role

He added that private companies, which will have a significant role in the transition, want to see policy certainty enhanced in the months ahead.

The group is awaiting the finalisation of the Electricity Regulation Amendment Bill, which promises to open up the electricity market and put an end to Eskom’s longstanding monopoly, and the Integrated Resource Plan.

Comment: Africa cannot afford to be complacent about solar radiation management

Meanwhile, the DA’s preference for greater private sector involvement in the energy transition could create fresh tensions with key stakeholders. Left-wing adversaries often deridingly label the DA a “neoliberal” party.

The country’s largest trade union group COSATU wants the newly separated energy department to “stop the privatisation of electricity and energy”, and instead promote state and social ownership models.

“We don’t expect major shifts with regards to the just transition, but rather a more focused approach on its implementation, in particular to make sure workers and communities and value chains are not left behind,” a spokesperson for the organisation told Climate Home.

The just transition should be overseen by multiple government departments given “the triple crisis” of unemployment, climate change and energy shortages, they added, suggesting that, for example, the finance ministry should raise spending on climate-focused public employment schemes.

(Reporting by Nick Hedley, editing by Joe Lo and Matteo Civillini)

The post New South African government fuels optimism for faster energy transition appeared first on Climate Home News.

European investors hold shares worth at least $65 million in major coal firms across China, India, the United States, Indonesia and South Africa within funds designated as “promoting environmental and social” goals under EU rules, an analysis by Climate Home and media partners found.

Taken together, these companies emit around 1,393 million tonnes of carbon dioxide (CO2) into the atmosphere every year, putting them among the world’s top five polluters if they were a country.

The investments are owned by major financial firms including BlackRock, Goldman Sachs and Fideuram, a subsidiary of Italy’s largest bank Intesa Sanpaolo. Most firms analysed are signatories of the Glasgow Financial Alliance for Net Zero (GFANZ), whose members pledge to align their portfolios with climate-friendly investment.

The asset managers told Climate Home their coal holdings do not contradict EU green policies or the 2015 Paris Agreement to tackle climate change.

At the COP26 UN climate summit in Glasgow in 2021, countries agreed for the first time to accelerate efforts “towards the phase-down of unabated coal power”. “Unabated” means power produced using coal without any technology to capture, store or use the planet-heating CO2 emitted during the process.

But rather than shrinking, global coal capacity has grown since the signing of the Glasgow Climate Pact with a fleet of new coal plants firing up their boilers, primarily in China, India and Indonesia. Coal miners in those countries have also boosted their operations to keep up with the increasing demand.

European leaders have heavily opposed this, with EU president Ursula von der Leyen saying the bloc is “very worried” about coal expansion in China.

“Light green” funds

The investments analysed by Climate Home have been made by funds classified under Article 8 of the EU’s Sustainable Finance Disclosure Regulation (SFDR), which the European Commission hoped would discourage greenwashing and promote sustainable investments when it was introduced in 2021.

Article 8 – known as ‘light green’ – refers broadly to a fund that has “environmental and social characteristics”, while the ‘dark green’ Article 9 refers more directly to sustainability.

The rules were also intended to offer members of the public more clarity on where asset managers invest their money and enable them to make an informed decision on whether they want their savings or pension pots to prop up climate-harming activities.

Workers shovel coal onto a truck at a coal yard near a coal mine in Huating, Gansu province, China. REUTERS/Thomas Peter

But a group of European financial market watchdogs warned this month the rules are having the opposite effect and called for an overhaul of the system.

“Status as ‘Article 8’ or ‘Article 9’ products have been used since the outset in marketing material as ‘quality labels’ for sustainability, consequently posing greenwashing and mis-selling risks,” they said in a joint opinion to the European Commission.

“The general public is still being misled when it comes to sustainable funds,” Lara Cuvelier, a sustainable investments campaigner at Reclaim Finance, told Climate Home. “The regulations are very weak and there is no clear criteria as to what can or cannot be included. It’s still in the hands of investors to decide that for themselves.”

Funding coal expansion

Climate Home identified investments in the biggest-polluting companies in the coal sector as part of a wider investigation led by Voxeurope, which tracked holdings by funds that disclose information under the EU’s sustainable finance directive.

These “green” funds include investments in mining companies like Coal India and China Shenhua – the respective countries’ top coal producers – and Indonesia’s Adaro Energy, as well as in giant coal power producers such as NTPC in India and China Resources Power Holdings.

All of these companies are planning large-scale expansions of their coal output, according to the influential Global Coal Exit List compiled by German NGO Urgewald.

No new coal mines, mine extensions or new unabated coal plants are needed if the world is to reach net zero emissions in the energy sector by 2050 and keep the 1.5C warming limit of the Paris Agreement “within reach”, according to projections by the International Energy Agency (IEA).

State-owned Coal India is the world’s largest coal producer, with fast-growing output topping 773 million tonnes in the latest financial year. It is targeting 1 billion tonnes of annual coal production by 2025-26 by opening new mines and expanding dozens of existing ones.

IEA calls for next national climate plans to target coal phase-down

In its latest annual report, Coal India cited “pressure of international bodies like [the] UN to comply with [the] Paris Agreement” as one of the main threats to its business. Coal India’s share value has more than doubled over the last 12 months on the back of stronger coal demand in the country, as extreme heatwaves have fuelled the use of air-conditioning among other factors.

State-run mining and energy giant China Shenhua plans to invest over $1 billion in 2024 to expand its fleet of coal power stations and build new coal mines. “We will keep a close eye on climate change to improve the clean and efficient use of coal,” its latest annual report said.

Big investors

The funds with stakes in those coal-heavy companies are managed by Fideuram, an arm of Italy’s largest bank Intesa Sanpaolo, US-based AllianceBernstein and Mercer, a subsidiary of the world’s largest insurance broker Marsh McLennan.

Coal investments in Fideuram’s Article 8 funds – worth at least $16 million – also appear to breach the company’s own coal exclusion policy, designed to rule out holding shares in certain coal firms.

Two of its flagship “emerging markets” funds claim to promote environmental and social characteristics including “climate change prevention” and the “reduction of carbon emissions”, according to information disclosed under EU rules. To achieve their ‘green’ objectives, the funds claim to exclude any investment in companies “deriving at least 25% of their revenues” from the extraction, production and distribution of electricity connected with coal.

But Climate Home found the funds include investments in at least six major coal companies exclusively or primarily involved in coal mining or power generation.

A coal-fired power plant under construction in Shenmu, Shaanxi province, China, in November 2023. REUTERS/Ella Cao

Fideuram did not answer Climate Home’s questions about the funds’ apparent breach of their own policy. But a company spokesperson said in a written statement that “investments in sectors with high-carbon emissions do not conflict with the objectives of the SFDR, which concern the transparency of sustainability investments, nor with the Paris Agreement, which promotes a transition to a low-carbon economy”.

A spokesperson for Mercer said its Article 8 fund, which holds shares in NTPC and China Resources Power Holdings. has an exclusion policy to avoid investing in companies that generate more than 1% of their revenue from thermal coal extraction. “Based on the data provided by ISS [a provider of environmental ratings], no groups involved breach the 1% threshold, and therefore, the fund is not in violation of its SFDR commitments,” they added.

AllianceBernstein did not respond to a request for comment.

Coal-hungry steelmaking

While excluding investments in so-called thermal coal used for electricity generation, several ‘green’ funds put their money in companies producing coking coal – or metallurgical (met) coal – which is used to make steel.

Goldman Sachs’ Article 8 funds hold shares worth several million dollars in Jastrzebska Spolka Weglowa, Europe’s largest coking coal producer, and Shanxi Meijin in China. BlackRock offers exchange-traded funds (ETFs) tracking indexes that include investments in SunCoke, a leading met coal producer in the US and Brazil, Alabama-based Warrior Met and Shanxi Meijin.

Five things we learned from the UN’s climate mega-poll

Reclaim Finance’s Cuvelier said that, up until recently, the focus has been on pushing thermal coal out of investor portfolios because the alternatives to met coal in steel production were “less developed”.

“There are now increasing calls on financial institutions to cover met coal as well in their exclusion policies as alternatives exist,” she added. “It’s becoming very important because there are new projects under development that should be avoided”.

A spokesperson for BlackRock said: “As a fiduciary, we are focused on providing our clients with choice to meet their investment objectives. Our fund prospectuses and supporting material provide transparency as to the methodology and investment objectives of each fund”.

Goldman Sachs did not reply to a request for comment.

Reforms on the horizon

At the end of 2022, the European Commission began a review of the SFDR’s application with a view to updating its sustainable finance rules.

Future reforms may include changes to the ways funds are categorised. “There are persistent concerns that the current market use of the SFDR as a labelling scheme might lead to risks of greenwashing… partly because the existing concepts and definitions in the regulation were not conceived for that purpose,” the Commission said in a consultation paper released last year.

It also indicated that the existing categories under Articles 8 and 9 could either be better defined or scrapped entirely and replaced with a different system. The new Commission, yet to be formed following last month’s elections, will decide if and how to move forward with the reform process.

Lithium tug of war: the US-China rivalry for Argentina’s white gold

Separately, the EU’s market supervisory authority, ESMA, has recently issued guidelines to prevent funds from misusing words like “sustainability”, “ESG” – environmental, social and governance – or “Paris-aligned” in their names. A handful of the funds with coal investments analysed by Climate Home have used those labels.

Under the new guidelines, asset managers wanting to slap climate-friendly labels on their funds will have to exclude companies that derive more than a certain percentage of revenues from fossil fuels.

Climate Home produced this article with data analysis contributions from Stefano Valentino (Bertha Fellow 2024) and Giorgio Michalopoulos. This article is part of an investigation coordinated by Voxeurop and European Investigative Collaborations with the support of the Bertha Challenge fellowship.

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Speaking on Monday at an old London coal power plant-turned-shopping centre, IEA head Fatih Birol said he would be “very happy” to see new NDCs (Nationally Determined Contributions) that “include no new unabated coal and also early retirements of existing coal”.

In 2021, the Glasgow Climate Pact, agreed at the COP26 UN climate summit, called on countries for the first time to accelerate efforts “towards the phase-down of unabated coal power”. “Unabated” means power produced using coal without any technology to capture, store or use the planet-heating carbon dioxide emitted during the process.

Birol, a Turkish energy analyst, said that stopping coal-plant construction was “as our North American colleagues would say, a no-brainer”. Yet, he added, while “the appetite to build new coal plants is in a dying process, some countries still do it”. He singled out China’s plans to build 50 gigawatts (GW) of new coal plants.

Shutting down existing coal plants, particularly young ones in Asia, is more difficult because the companies that have built and operate them would lose money, Birol noted. There is almost $1 trillion of capital to be recovered from existing coal plants, “so who is going to pay for this?” he asked, calling it “a key issue”.

Birol praised the Just Energy Transition Partnerships that have been set up between wealthy countries and several coal-reliant emerging economies like South Africa and Indonesia to help address the problem. He added that “there are some countries in Asia who can, in my view, afford to retire their coal plants earlier”, without mentioning which.

Malaysia’s Deputy Prime Minister Fadillah Yusof announced at the event organised by the Powering Past Coal Alliance, which includes 60 countries, that Malaysia aims to reduce its coal-fired power plants by half by 2035 and retire all of them by 2044. It will also tackle social and economic challenges through reskilling programmes for workers and promoting renewable energy adoption, he added.

Speaking later at London’s defunct Battersea power station, Indonesia’s deputy minister for maritime affairs and investment, Rachmat Kaimuddin, explained some of the challenges his country faces in phasing out coal.

Kaimuddin (right) speaks alongside Germany’s climate envoy Jennifer Morgan (centre) in London on June 24, 2024. (Photo: Powering Past Coal Alliance)

After China and India, Indonesia has the world’s biggest pipeline of new coal power plants under construction. Kaimuddin said the state energy company would not build any more but added that cancelling existing contracts is “very, very difficult” unless the company constructing the plant wants to pull out – which none have yet.

In addition, shutting down existing power power plants is expensive, he said, because many coal power plants have “take or pay” contracts signed in the 1990s under which the government pays them whether their electricity is required or not.

Another concern is that the Southeast Asian nation does not want to lose its energy security in the switch to renewables, Kaimuddin noted. Indonesia currently mines domestically most of the coal it uses. “We’re trying to partner with other people to try to build [a] renewable supply chain in the country,” he said.

Millions of people in Indonesia work in the coal industry, he added, so a shift towards clean energy will need to include new jobs for them. “It doesn’t have to be green jobs – it has to be jobs, right?” he said.

Five things we learned from the UN’s climate mega-poll

Singapore’s climate ambassador Ravi Menon told the same event that the economies of China, India and Indonesia are growing and so are their energy needs, meaning that renewables have to be rolled out rapidly to meet demand.

Energy storage is also required to smooth intermittent supply from solar and wind, while electricity transmission infrastructure, including power lines, is needed to transport power from solar and wind farms to cities that account for a large share of consumption.

Both Kaimuddin and Menon said carbon credits should be used to offset losses for the owners of coal plants that are shut down early. “Retiring [plants] definitely will destroy financial value and… and we also need a better way to compensate them,” said Kaimuddin.

The event’s focus on coal raised concerns among some campaigners. Avantika Goswami, climate lead at the Delhi-based Centre for Science and Environment, told Climate Home that “singling out coal” in the NDCs, rather than including fossil fuels more broadly, “equates to giving a free pass to oil and gas-dependent countries, many of whom are wealthy”.

It could penalise many developing countries, where coal is a cheap source of fuel and energy needs are still growing, she warned.

“A global climate policy that allows unfettered use of oil and gas – which together account for 55% of fossil fuel emissions – is incomplete and inequitable,” she added.

Romain Ioualalen, global policy lead at advocacy group Oil Change International, said the IEA’s head should know that “the time to focus only on coal as a climate culprit is over”. He pointed to a subsequent agreement at COP28 last year where governments agreed to “transition away” from fossil fuels in their energy systems, without setting a deadline.

“We need a full, fast, fair, funded phase-out of all fossil fuels. Setting such a low bar for ambition is out of touch and inequitable, keeping the door wide open for major oil and gas producers,” Ioualalen added in a statement.

He called on rich countries that are “most responsible” for the climate crisis to foot the bill for a just transition. “We know they have more than enough money. It’s just going to the wrong things like fossil fuel handouts,” he said.

(Reporting by Joe Lo; editing by Megan Rowling)

This story was updated after publication to include comments from Avantika Goswami at the CSE and Romain Ioualalen at Oil Change International,.

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According to satellite data released by the World Bank on Thursday, gas flaring increased by 7% in 2023, reversing a decline in 2022. The rise resulted in extra planet-warming emissions equivalent to 23 million tonnes of carbon dioxide (CO2) – similar to adding about 5 million cars to the roads, it said.

Gas flaring emits greenhouse gases including black carbon and methane, which has a warming effect about 80 times more potent than CO2 over a 20-year period.

The top flaring countries in 2023 were Russia, Iran, Iraq and the United States, with just nine countries responsible for 75% of gas flaring globally.

Last year also saw an uptick in the intensity of flaring, meaning the amount of gas flared per barrel of oil produced, as oil prices spiked above $90 a barrel in the autumn.

In some countries, such as Iran and Libya, increased flaring intensity was attributed to increased oil production, coupled with a lack of investment in and prioritisation of gas recovery and utilisation.

Intensity was also high in countries affected by conflict, such as Syria, where operators struggle to address flaring.

“We’re hopeful that this is somewhat of an anomaly and the longer-term trend will be dramatic reductions,” said Zubin Bamji, manager of the World Bank’s Global Flaring and Methane Reduction (GFMR) Partnership, which monitors flaring and supports governments and oilfield operators to reduce related emissions.

Decoupling trend

That hope is underpinned by the “decoupling of a long-standing correlation between oil production and gas flaring” since the late 1990s, Bamji explained in emailed comments.

Operators can minimise flaring through measures such as re-injecting gas back into the earth or capturing it for utilisation.

Demetrios Papathanasiou, director of the World Bank’s energy and extractives global practice, said in a statement on the data that if the wasted gas were captured and used, it could displace dirtier energy and generate enough power to double electricity supplies in sub-Saharan Africa.

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But others argue that using flared gas more efficiently – or regulating flaring and its related methane emissions – will not be eliminate the practice as long as fossil fuels are still being produced.

“The number one thing we need to do is put the oil and gas industry into decline,” said Lorne Stockman, research co-director at Oil Change International (OCI), a nonprofit group that campaigns against fossil fuels.

Pledges versus regulation

The increase in flaring suggests that growing global attention and initiatives to eliminate flaring have not been “sufficient or sustainable enough”, according to the World Bank’s report.

Operators and countries representing about 60% of flaring worldwide have endorsed the World Bank’s Zero Routine Flaring by 2030 (ZRF) initiative, while 155 countries have signed a Global Methane Pledge, launched at the COP26 climate summit in 2021, to collectively cut methane emissions.

Jonathan Banks, global director of methane pollution prevention at Clean Air Task Force, an environmental group focused on decarbonising energy, said those initiatives are “helpful”.

But, he added, governments and companies are still “not doing nearly enough” to stop flaring, whether in the form of policies to force businesses to take action or energy firms’ own plans and investments.

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That is changing, Banks said, referring to recently introduced regulations in the United States, Canada and the European Union which aim to reduce methane emissions. “But those new policies take time to be implemented and enforced,” he noted.

The EU’s Methane Strategy, adopted in May, will include a methane transparency requirement on gas imports that looks to penalise gas flaring and venting – an even more polluting practice of releasing unignited gas.

“The potential to use access to the European market as a way to drive action is huge,” Banks said, adding that only a global standard, applied to all internationally traded oil and gas, could bring an end to flaring and venting.

US gas “certification”

Without such a standard, oil and gas companies are in practice policing themselves when it comes to curbing flaring and methane emissions more broadly.

In the US, for example, third-party gas “certification” companies track methane emissions coming from oil and gas infrastructure and tell consumers their gas is “responsibly sourced”.

According to OCI, there is no set standard for what level of methane leak reductions qualify natural gas for this label.

“Methane became a reputational issue for the US oil and gas industry a few years ago,” said OCI’s Stockman. “Suddenly we saw this proliferation of companies offering to monitor methane, and provide a certification to gas producers as an incentive to sign up.”

Gas certification is currently part of oil and gas companies’ voluntary efforts to act on their methane pollution – in the US, Colorado is the only state that directly measures methane emissions from oil and gas infrastructure. But, according to OCI, the industry is pressing regulators to use certification “as a proxy for regulatory oversight.”

Fossil fuel industry under pressure to cut record-high methane emissions

Research by Earthworks and OCI found that these certifying companies use unreliable technology, which missed all but one of the emissions “events” captured by researchers’ own monitoring equipment.

They also found conflicts of interest on the part of leaders and board members of certification companies, including holding investments in the same oil and gas clients they were working with and promoting fossil gas as a clean energy source.

While regulation is needed, Stockman said, it must be monitored by governments and is near impossible to enforce at scale, due to practical and technological limitations.

Even satellite technology is limited in its capacity to observe small-scale emissions events at “hundreds of thousands of individual sites”, he said.

“We can’t trust the industry,” he added. “The way to keep methane out of the atmosphere is to keep it in the ground.”

(Reporting by Daisy Clague; editing by Megan Rowling)

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A few weeks ago, leaders of Small Island Developing States (SIDS) met in Antigua & Barbuda to discuss our next decade of action. This, for us, is the critical decade, no less. We have a few years to change the tides that are swallowing our islands and extinguishing our culture and our identity.  

Pacific Island communities are unwilling witnesses of the climate crisis – emitting minuscule amounts of greenhouse gases while bearing the brunt of the extreme and devastating consequences of the world’s failure to break its addiction to fossil fuels.  

During that meeting, we heard from some G7 leaders that they will support our priorities, that a fossil fuel phase-out and a just and equitable transition is necessary. But these cannot be hollow words. As the single greatest security threat for our region, it is time to implement your commitments or be held accountable for your lack of inaction by carrying the loss of our future generations on your shoulders. 

Just a few months ago, at the UN climate talks in Dubai, countries around the world finally agreed to transition away from fossil fuels. This week in Bonn, any talk of how countries plan to implement this agreement was noticeably absent.

Bonn bulletin: Fossil fuel transition left homeless

But now, G7 nations – Canada, Japan, Italy, the United States, Germany, the United Kingdom, and France – are gathering at a historic time for climate politics, holding one of the first opportunities to show their leadership by putting the COP28 decision on fossil fuels into action. 

This will also be the last time these countries meet before they are required to submit updated and enhanced climate plans through to 2035 under the Paris Agreement. It is a final chance for G7 nations to adopt the measures that are necessary to limit warming to 1.5°C. 

Despite having both the capacity and the responsibility to be leaders driving forward a full, fast, fair and funded phase-out of fossil fuels, these countries are not walking the walk – at home or abroad.

Islands as “collateral damage”?

Some G7 countries have plans to massively expand fossil fuel production at home despite science telling us that no new oil, gas, or coal projects are compatible with a safe climate, while others are using billions of the public’s money to finance more fossil fuel infrastructure abroad. 

We are urging G7 nations to demonstrate true leadership at the upcoming negotiations, immediately halting the approval of all new fossil fuel projects and committing to 1.5°C-aligned timelines for phasing out existing fossil fuel reliance in a just and equitable manner.  

This transition must prioritise the needs of developing countries, which bear the brunt of climate change impacts despite contributing the least to its causes. 

G7 coal charade: Funding the fire they claim to fight

G7 countries have already committed to end international public finance for fossil fuel projects but continue approving billions of dollars for fossil fuel infrastructure. They are giving the fossil fuel industry a lifeline, indebting vulnerable countries, and delaying a just energy transition.  

In the words of UN Secretary General Antonio Guterres: “The idea that an entire island state could become collateral damage for profiteering by the fossil fuel industry is simply obscene.” 

There is no shortage of public money to enable a just and equitable transition to renewable energy and turn the COP28 agreement into a reality. It is just poorly distributed to the most harmful parts of the global economy that are driving climate change and inequality: fossil fuels, unfair colonial debts, and the super-rich. 

We need G7 countries to pay their fair share on fair terms for fossil fuel phase-out and the other crises we face. Climate finance remains the critical enabler of action – over the course of our meetings in Antigua & Barbuda we heard some G7 countries make commitments and pledges; we also heard a lot of solutions and options that will exacerbate our debt burden.  

But for us, it is clear. Climate finance must be scaled up to meet the trillions of dollars needed for adaptation, mitigation, and addressing loss and damage; and sent to where it is most needed – on fair terms that do not further burden our economies with debt. 

Hold fossil fuel firms to account

The members of the G7 are among the world’s most powerful and wealthiest nations. They have a responsibility to lead the way both at home and abroad. Anything less is hypocrisy and gross negligence, and risks endangering the implementation of the COP28 decision to transition away from fossil fuels. 

The Pacific Island nations have been vocal advocates for ambitious climate action and have led by example for decades. In 2023, our leaders aspired to a Fossil Fuel Free Pacific. We embedded the language of phase-out and transition in our leaders’ declaration.   

Bonn talks on climate finance goal end in stalemate on numbers

We have felt the impacts of climate change more acutely than most and have consistently called for comprehensive and equitable global action for the very survival of our nations and for the good of all people and species.  

For Pacific Island nations, the transition to clean and renewable energy is not just a goal but a necessity for survival. We call upon the G7 to reflect the highest possible ambition. These countries must acknowledge and support our aspiration for a fossil fuel-free future, setting an example for sustainable development that prioritizes the well-being of people and planet over profit – and ensure that the fossil fuel companies responsible for the climate crisis bear the cost of their actions. 

The time for action is now. The fate of our planet hangs in the balance, and the decisions made by the G7 nations will shape our collective future. We implore them to heed the call of the Pacific Island nations and rise to the challenge of the climate crisis with boldness, ambition and urgency. Our shared future depends on it. 

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The post Bonn bulletin: Fossil fuel transition left homeless appeared first on Climate Home News.

In a speech to mark World Environment Day at the American Museum of Natural History in Washington DC, he said that “many in the fossil fuel industry have shamelessly greenwashed, even as they have sought to delay climate action – with lobbying, legal threats and massive ad campaigns”.

“I urge every country to ban advertising from fossil fuel companies,” he said on Wednesday, adding that many governments already ban or restrict tobacco advertising – and that “some are now doing the same with fossil fuels”.

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In 2022, France banned adverts for some fossil fuel products, and similar laws are being discussed in Canada and Ireland. The Dutch city of Amsterdam has banned fossil fuel adverts and the Scottish capital Edinburgh is set to do the same.

Guterres described the fossil fuel industry as “the Godfathers of climate chaos”, raking in record profits and feasting off trillions in taxpayer-funded subsidies. Meanwhile the oil and gas industry last year invested “a measly 2.5 percent” of its total capital spending on clean energy, he added.

“Mad Men fuelling madness”

The UN Secretary-General said fossil fuel companies “have been aided and abetted by advertising and [public relations] companies, Mad Men – remember the TV series – fuelling the madness”.

He called on them to “stop acting as enablers to planetary destruction” by refusing new fossil fuel clients and setting out plans to drop existing ones.

According to sector campaign group Clean Creatives, nearly 300 advertising and PR agencies held contracts with fossil fuel firms between 2022 and 2023.

Subsidiaries of the British company WPP had the highest number of fossil fuel contracts – 55 – despite having a pledge to reach net zero by 2030. Their clients include oil and gas giants Saudi Aramco, Equinor and BP.

On the other hand, more than 1,100 organisations in advertising and publicity have pledged to cut ties with fossil fuel companies and decline any contracts with them in future.

Clean Creatives executive director Duncan Meisel said Guterres’ speech was “a turning point in the advertising and PR industry’s relationship with climate change and fossil fuels”.

“There is no longer any cover for agencies to say that they are doing the right thing when working with polluters,” he said. “Everyone knows this is wrong, and everyone needs to act.”

Don’t take ads

Guterres also said that news media and technology companies should stop taking fossil fuel advertising.

Internal documents from fossil fuel firms like BP have shown that they consider placing sponsored content in the news media as a deliberate and effective strategy for influencing both public opinion and energy policy.

Research by investigative website DeSmog and Drilled showed that in-house advertising teams at international media outlets like Reuters, Bloomberg, The Financial Times and The New York Times facilitated this strategy, by promoting fossil fuel companies’ messaging through sponsored content like podcasts, newsletters and videos.

In April, The Financial Times and Reuters pulled content sponsored by Saudi Aramco that showcased the state-run oil company’s preference for technologies like hydrogen and carbon capture and storage.

DC political journalism is drowning in oil.@PunchbowlNews presented by @Chevron @axios Generate sponsored by @Chevron@politico Power Switch presented by @bp_America pic.twitter.com/9XfD3ifO7y

— Brad Johnson SUBSCRIBE TO HILLHEAT.NEWS (@climatebrad) November 13, 2023

As well as sponsoring content, fossil fuel companies take out regular adverts in mainstream and specialist media. For example, Chevron sponsors Politico’s energy podcast.

Meta, the company that owns Facebook and Instagram, received around $4 million from fossil fuel firms in return for running adverts spreading false claims over the COP27 climate summit in Egypt, according to research from Climate Action Against Disinformation.

Hottest May ever

Guterres’ speech was scheduled to coincide with World Environment Day on June 5 – also the day, he pointed out, that May 2024 was confirmed as the hottest May in recorded history

“This marks twelve straight months of the hottest months ever,” the UN chief said. “For the past year, every turn of the calendar has turned up the heat. Our planet is trying to tell us something. But we don’t seem to be listening.”

On the same day, the World Meteorological Organization (WMO) said there is an 80% chance that one of the next five years will be 1.5C hotter than pre-industrial times. In 2015, that chance was estimated at close to zero.

In the Paris Agreement adopted that year, all governments agreed to strive to limit global temperature increase to 1.5C “recognising that this would significantly reduce the risks and impacts of climate change”.

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“WMO is sounding the alarm that we will be exceeding the 1.5C level on a temporary basis with increasing frequency,” WMO Deputy Secretary-General Ko Barrett said in a statement on Wednesday.

“However, it is important to stress that temporary breaches do not mean that the 1.5C goal is permanently lost because this refers to long-term warming over decades,” she added.

The WMO also said there is a close to 50% likelihood that the global temperature averaged over the five years from 2024-2028 will exceed 1.5C above the pre-industrial era.

The UN decided to combine its scientific and advocacy powers on World Environment Day in a bid to push climate change back up the global political agenda, which has been dominated by conflicts and major elections this year.

The aim is to increase pressure on the richest nations ahead of the G7 summit this month – and on all governments tasked with preparing new climate action plans – to urgently step up their efforts to cut emissions.

“The battle for 1.5 degrees will be won or lost in the 2020s – under the watch of leaders today”, said Guterres.

(Reporting by Joe Lo and Daisy Clague; editing by Megan Rowling)

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In a statement, a gathering of EU ministers called the Council of the EU said the decision “unlocked the process of modernisation of the Energy Charter Treaty (ECT) for its non-EU contracting parties”.

The compromise allows the EU as a body to withdraw from the treaty, while individual EU member states can stay in and approve the green reforms at a conference due to take place this year, if they wish.

The ECT currently allows all energy companies – including coal, oil and gas firms – to sue governments over climate and other policies they see as a threat to their current and future profits.

The proposed reforms to modernise the ECT, which are due to be voted on in November, would make it easier for ECT countries to prevent the treaty being used as a basis for lawsuits involving fossil fuel assets that are affected by green economy measures.

However, with several European countries already filing their notice to leave the ECT, it is unclear whether a sufficient number of EU states will stay in the treaty long enough to get the reforms approved. As part of today’s EU Council agreement, the EU confirmed it would leave the treaty.

Other ECT member states, including Japan and Kazakhstan, only grudgingly agreed to back the reforms under pressure from the European Commission.

For the ECT “modernisation” proposal to be adopted, none of the treaty’s member governments – now numbering 49 – must vote against it at November’s conference. Then three-quarters of ECT members need to ratify the reforms for them to take effect.

If the reforms fail, the ECT’s members across Europe and Asia will be unable to remove its protection for fossil fuel investments and – due to a 20-year sunset clause – even EU countries that have left would be exposed to lawsuits for that period.

Post-Soviet treaty

The ECT was conceived in the 1990s to boost investment flows between Western and post-Soviet countries. But its provisions to deter states from grabbing private assets have since been used by energy companies to fight back against climate policies.

In 2020, a British oil and gas company sued Slovenia over what it called “unreasonable” environmental protections”, while German energy company Uniper threatened to sue the Dutch government for €1 billion ($1.1bn)  over its coal phase-out plans.

In lawsuits brought under the ECT last November, British oil company Kelsch is suing the EU, Germany and Denmark for at least 95 million euros ($102m) over a windfall tax on energy firms.

G7 offers tepid response to appeal for “bolder” climate action

The European Commission reacted to these and other cases by attempting to remove fossil fuels from the list of investments protected by the ECT – with the aim that it would apply only to clean energy assets.

For two years, efforts by EU negotiators were repeatedly blocked by Japan and Kazakhstan. But in June 2022, a “flexibility mechanism” was agreed that would allow ECT states to end protection for fossil fuels, as long as no other ECT state objected.

Europe divided

Despite European Commission negotiators finally winning this right, EU member countries were divided on how to apply it.

Governments like France, Spain and Luxembourg wanted to immediately end protection for fossil fuel investments but faced push-back from several Eastern European countries.

They agreed a compromise to stop protection for new fossil fuel investments but to continue it for existing investments for ten years – a decision that angered climate campaigners.

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Friends of the Earth’s Paul de Clerck said at the time it would “lock the EU in fossil fuel investment protection” for a decade.

Despite this agreement, by the time the annual ECT conference came around in November 2022, EU governments no longer unanimously backed the reforms the European Commission had negotiated, and so they were shelved.

Locking in Asian fossil fuels

The EU’s stalling on the reforms drew an angry response from then head of the ECT secretariat, Guy Lentz of Luxembourg.

In a letter to the leader of the European Parliament in February 2023, he warned that if the EU withdrew as a bloc before approving the modernisation, it would amount to “an express prohibition” for other ECT members to better align with the Paris Agreement on climate change.

Tensions rise over who will contribute to new climate finance goal

He added that failure to agree reforms would essentially allow fossil fuel companies to sue EU states for longer because of an existing 20-year sunset clause, which means energy companies can bring lawsuits against governments for two decades even after a country leaves the treaty.

EU states wanted to neutralise this sunset clause by agreeing a side deal between themselves not to apply the treaty. But Lentz said these attempts “may not provide the expected legal certainty”. Campaigners accused him of “bluffing”.

Numbers game

EU countries then continued to debate among themselves whether to stay in or leave the ECT and – if they withdrew – whether to modernise it before exiting.

Despite the ongoing talks, France, Germany and Poland officially left the ECT in December 2023. Luxembourg and Slovenia will leave in June and October 2024 respectively. Portugal, the UK, Spain and the EU will leave next year.

This debate was resolved today, with EU states’ ministers agreeing to a compromise, brokered by the Belgian government. Governments that want to can stay and support the modernisation, but the EU itself can start process of exiting right away.

Belgian energy minister Tinne Van der Straeten said her government had “worked tirelessly to break this complex deadlock and found a balance acceptable and useful to all”.

The deal essentially makes the reforms contingent on timing and EU countries’ commitment to reform.

By November, after Luxembourg and Slovenia exit, there will be 47 ECT member states, including 22 from the EU. Eleven more – including the United Kingdom and Switzerland – are in Europe but not in the EU. Nine others are in Central Asia and three in the Middle East, with Japan and Mongolia the remaining two.

E3G analyst Eunjung Lee said ECT modernisation “is still uncertain” but added “with the EU Council decision today, it is probable that the modernisation might pass, particularly if the voting takes place via correspondence”.  

The ECT approved this option in October 2022. It means the conference’s chair sets a deadline by which any objections should be sent in.

“This will make things easier than voting at a conference, because unless there is a clear objection, the modernisation will be adopted”.

But even if the reform is approved, Lee said the ratification by three-quarters of countries “could take forever”.

De Clerck of Friends of the Earth agreed, saying “it is unclear if the reform would ever be ratified”.

(Reporting by Joe Lo; editing by Megan Rowling)

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This is Azerbaijan’s first large-scale solar power plant. It opened last October and the Emirati company developing it, Masdar, says it can power 110,000 homes.

Climate Home visited the solar park as part of a media tour organised and sponsored by the Azerbaijan COP29 Presidency, which is arranging the UN climate summit in Baku this November.

At the park’s opening ceremony, in front of Sultan Al-Jaber – Masdar’s CEO who led the COP28 climate summit in Dubai – Azerbaijan’s President Ilham Aliyev boasted about his country’s determination in “moving towards a green agenda”. 

“This is our contribution not only to the future development of Azerbaijan but to the issues related to climate change,” he told the assembled dignitaries. 

But despite this rhetoric, climate scientists have questioned Azerbaijan’s climate credentials as it prepares to host the COP29 summit. 

An increase in renewable energy production does not mean Azerbaijan is planning to leave its vast oil and gas reserves in the ground. Aliyev said last month that Azerbaijan will try to sell abroad the gas it saves by not using it in power stations at home. Europe is the main target customer, as it shifts away from Russian gas supplies.

In Nagorno-Karabakh, Azerbaijan’s net zero vision clashes with legacy of war

On top of selling its surplus, Azerbaijan is planning to extract more gas thanks, in part, to fresh investments from foreign fossil fuel giants like Britain’s BP, France’s TotalEnergies and Emirati oil giant ADNOC, which Al-Jaber also heads. 

Bill Hare, CEO of climate science non-profit group Climate Analytics, called Azerbaijan’s plans “a fantasy”. “Ramping up renewables won’t make a dent in emissions unless they displace fossil fuels in the system,” he told Climate Home. “You can’t tackle climate change without getting rid of fossil fuels.” 

A spokesperson for COP29 said gas is “an ideal transition fuel in the production of electricity”. In emailed comments, they added that gas exported to Europe can replace coal power – which currently provides around 15% of the EU’s electricity – in the short to medium-term, thereby reducing greenhouse gas emissions.

Azerbaijan is not alone in pursuing both renewable energy and fossil fuel production. Most fossil fuel producers – including wealthy nations like the US, UK and Canada – have no plans to stop producing oil and gas. That’s despite the International Energy Agency (IEA) warning that new fossil fuel extraction projects are not compatible with limiting global warming to 1.5C.

The COP29 spokesperson said Azerbaijan’s strategy does not contradict IEA scenarios, noting those do not exclude continued investment in existing oil and gas assets and approved projects.

A fossil fuel economy

Azerbaijan’s fossil fuel industry is steeped in history. As early as the 13th century, Italian explorer Marco Polo wrote of Baku’s “stream of oil in such abundance that a hundred ships may load there at once”. 

In the 19th century, Azerbaijan gave birth to modern crude refining, and by the 20th century it accounted for around half of the world’s oil production, helping fuel the Soviet Union’s victory in World War Two.

Oil and gas remain omnipresent today. The Flame Towers, Baku’s iconic skyscrapers, are a symbol of fossil fuel wealth. At night, their facades light up to display flickering flames in a reference to the naturally-occurring fires produced by gas leaks that earned Azerbaijan its name, “The Land of Fire”. 

The logo of SOCAR, the state-owned oil and gas firm, emblazons the national football team shirts, while one of the country’s oldest oil fields sits just behind Baku’s Olympic Stadium, the venue for the COP29 climate summit. 

Oil fields on the outskirts of Baku, Azerbaijan, April 2o24. Photo: Matteo Civillini

By global standards, Azerbaijan is no longer a major fossil fuel producer, pumping less than 1% of the world’s oil and gas. But its economy remains heavily dependent on the income they generate. Fossil fuels make up over 90% of all exports and 64% of government revenue.

At the Petersberg Climate Dialogue in Berlin last month, Aliyev said that “having oil and gas deposits is not our fault. It’s a gift from God. We must not be judged by that. He added that “our oil and gas will be needed for many more years, including in European markets”.

A shrinking market?

European countries have historically been the main destination market for Azerbaijani oil and gas, and flows have been rising in the wake of Russia’s invasion of Ukraine. 

As Europe tried to wean itself off Moscow’s supplies, the European Commission went looking around the world for alternative sources of gas to keep the lights on and curb skyrocketing prices. In Azerbaijan, it struck a new deal to double gas exports by 2027. 

Baku is now scrambling to make good on that pact, while using it as a lever to expand its lucrative gas industry. The country could boost its gas production by more than a third over the next decade, according to data analysis by campaigning group Global Witness. 

“We are largely investing in increasing our gas production,” said Aliyev in Berlin, “because Europe needs more gas from new sources.” 

But energy experts question that reasoning. While looking for new gas supplies in the short term, the war in Ukraine also prompted the EU to fast-track its transition towards renewable sources of energy. Its strategic energy plan, laid out in 2022, would see overall gas demand in the bloc halve by 2030. 

“There will be a lot of supply globally and not that much demand on the European side,” said E3G analyst Maria Pastukhova. “Looking at the amounts alone, the EU will not need any additional gas from Azerbaijan if it delivers on its energy transition policies.”

Clean, cheap or fair – which countries should pump the last oil and gas?

But much will also depend on what kind of gas the block will continue to rely on. Norway, Europe’s top supplier, Algeria and Azerbaijan provide it through pipelines, while the United States and Qatar ship liquefied natural gas (LNG) to the continent. 

“It’s hard to say at the moment [which supplies will remain],” added Pastukhova. “But it isn’t very likely that Azerbaijan can continue to bank on crazy gas revenues from the EU. We don’t see readiness from European buyers to sign long-term contracts beyond 2035.” 

Sell, don’t burn

Meanwhile, Baku also wants to ensure that its gas is channelled towards the lucrative export market not burned at home.

Central to this strategy is the rollout of renewable energy. With strong winds blowing from the Caspian Sea and sun shining for a large part of the year, Azerbaijan boasts significant clean energy prospects.

But that potential has so far been largely untapped. Renewable sources, mainly from three hydro power stations, produced only 7% of Azerbaijan’s electricity in 2023. The government wants to increase that to 30% by 2030. 

If that target is met, Aliyev says that solar and wind will pump 5 gigawatts of clean electricity into the national grid, freeing up “at least” 5 billion cubic metres of gas for the European market.

At Masdar’s sprawling solar park in Garadagh, this plan is being rolled out. The park spans the equivalent of 770 football pitches, but was built in just under two years. It cost $262 million, with multilateral development banks stumping up just under half of that.

Speaking to journalists inside the plant’s control room, Kamran Huseynov, deputy director of the Azerbaijan Renewable Energy Agency, said eight more solar and wind projects are being developed for the coming years. “We are quite sure we can reach the target [of 30% renewables capacity] by 2028,” he added. 

As in Garadagh, foreign energy companies will be at the helm of those eight projects. Masdar will build two more solar parks and one onshore wind farm. Saudi Arabia’s ACWA Power is erecting a wind farm just north of Baku by the Caspian Sea.

Renewables-processed fossil fuels?

Later this year, BP is expected to start building a solar farm in the district of Jabrayil. This is one of the territories Azerbaijan captured after a long-running dispute with Armenia centred on the Nagorno-Karabakh region. 

Baku seized control of these areas in a two-part military offensive that started in 2020 and ended last autumn. As a result, some 136,000 ethnic Armenians who had lived in Nagorno-Karabakh fled in a mass exodus which, according to Armenia and the EU Parliament, amounted to “ethnic cleansing”. Azerbaijan has rejected those accusations. 

In Nagorno-Karabakh, Azerbaijan’s net zero vision clashes with legacy of war

The Azeri government is now promoting a green vision for Nagorno-Karabakh which involves the construction of government-branded “net zero” villages. It has also designated the region as a “green energy zone”, aiming to attract investment in renewable energy.

BP was the first major international energy firm to jump at that opportunity. In 2022, the company’s regional president for Azerbaijan, Georgia and Turkey, praised Baku’s efforts to turn Karabakh into “the heart of sustainable development”. 

BP wants electricity produced from Jabrayil’s solar power plant to make some of its vast oil and gas operations in Azerbaijan less dirty.

The British energy giant runs the Sangachal terminal, one of the world’s largest oil and gas processing facilities and the starting point for the pipelines transporting gas to Europe. Processing all of this oil and gas requires power, which BP currently gets from burning gas in generators.

The Sangachal oil and gas terminal in Azerbaijan. Photo: Azerbaijan Presidency

According to Elnur Soltanov, Azerbaijan’s deputy energy minister and the COP29 CEO, these are “very inefficient” and produce “some of the dirtiest electricity” in the country. After being electrified, the fossil fuel processing plant will receive the same amount of electricity from the grid as the solar park generates, according to Azernenerji, the country’s grid operator.

The process will also free up “more gas to export to world markets”, BP says.

BP’s project is being developed in partnership with SOCAR, Azerbaijan’s state-owned oil and gas giant. After setting up a “green energy” unit last year, SOCAR says it is working with international companies, like BP, “in order to get the know-how” and “learn in the process” with the goal of transforming into a “comprehensive energy company”.  

“Sooner or later, hydrocarbons will slowly die out – not right away,” Teymur Guliyev, deputy vice president for the energy transition at SOCAR, told reporters including Climate Home. “But we have to start our transformation process when we still have plenty of time to plan accordingly, go through trial and error.” 

The COP29 spokesperson said Azerbaijan “is making significant progress” towards reducing its greenhouse gas emissions. Currently, Azerbaijan has a goal to reduce emissions 40% by 2050 as outlined in its national climate plan (NDC). It has promised to submit a new NDC that is aligned with limiting global warming to 1.5C, which is due by early 2025.

How to move it

While the current priority for Azerbaijan’s renewables push appears to be maximising its gas exports, the government is also wrangling over how to sell its clean energy to Europe, when gas demand falls.

COP29’s Soltanov told Climate Home and other international journalists that he is “very optimistic” about Azerbaijan’s green transition. “Azerbaijan has been at the forefront of the oil revolution, it has been at the forefront of the gas revolution, and it has all the conditions to be at the forefront of the clean energy revolution as well,” he added. 

But the transportation of green electricity remains an obstacle.

The main option being explored is laying an electric cable under the Black Sea, stretching over 1,155 kilometres between Georgia and Romania. Originally the project, under discussion for several years, had the stated intention of linking Georgia to the European transmission network and boosting its energy security. 

But it was recently revamped as a possible route to carry Azerbaijan’s clean energy to the European market. In December 2022, the leaders of Azerbaijan, Georgia, Romania and Hungary formed a partnership to push the project forward, indicating it could be completed by 2029 at a cost of €2.3bn ($2.5bn). A two-year long feasibility study is currently in its final stage, according to President Aliyev. 

The leaders of Azerbaijan, Romania, Hungary and Georgia, and the European Commission President, at the signing of a green energy partnership in December 2022. (Photo: Inquam Photos/Octav Ganea via Reuters)

Implementing the project could be challenging given the fragile geopolitical situation in the region. The cable would run just south of the Crimean Peninsula, under Russian control, and near a theatre of war in Ukraine with the strong presence of military vessels. 

For Climate Analytics’ Bill Hare, “it’s a tricky location to attract investment and get built at the moment, but it would provide a lot of benefits in the long-term”. 

There are also questions over whether Azerbaijan’s current plans to export green energy via the Black Sea cable will yield a high-enough return to compensate for selling less fossil fuel.

“Electricity trade is a stable source of revenue, but it is also capital-intensive and not very high margin,” explained E3G’s Pastukhova. “It will not replace the same amount of export revenue that gas and oil have been contributing.”

“What Azerbaijan is doing right now [on renewables] is not enough and quite alarming because this country is so dependent on oil and gas revenue,” she said.

(Reporting by Matteo Civillini in Azerbaijan; editing by Megan Rowling and Joe Lo)

Matteo Civillini visited Azerbaijan as part of an “energy media tour” organised and sponsored by the COP29 Presidency.

The article was updated on 17 May to include comments from a COP29 spokesperson received after publication. 

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At the fourth – and penultimate – round of talks, negotiators did not agree to continue formal discussions on how to cut plastic production before a final session in the Korean city of Busan set for November, making it less likely that curbs will be included in the pact.

Peru’s negotiator said his country was “disappointed”, while the nonprofit Center for International Environmental Law said governments had sacrificed “ambition for compromise”.

“The pathway to reaching a successful outcome in Busan looks increasingly perilous,” said Christina Dixon, ocean campaign leader at the Environmental Investigation Agency.

Big Oil’s plan B

While some governments led by a self-described “High-Ambition Coalition” have pushed for measures to reduce plastic production – which is expected to nearly double in G20 countries by mid-century – major oil and gas-producing states like the US, Russia, Saudi Arabia and Iran have favoured an emphasis on recycling over producing less.

The members of the self-described “High-Ambition Coalition” are in light blue (Photo credit: CREDIT)

Plastics are made from oil and gas, and their production accounts for 3% of greenhouse gas emissions. Fossil fuel companies are betting that as demand for oil and gas for energy use falls, they can compensate by selling more of their products to plastic manufacturers.

The Ottawa talks were marred by complaints from scientists and campaigners that plastics industry delegates were harassing and intimidating them, while secretively-funded, pro-plastics adverts were placed around the venue by a right-wing Canadian lobby group.

‘Unsustainable’ plastic use

The governments of Rwanda and Peru have been leading the push for a strong global deal to rein in plastic pollution, winning international approval for the talks to craft a treaty at the United Nations Environment Assembly in 2022.

In Ottawa last month, they asked governments to give their backing to formal negotiations on how to reduce the production and use of plastics, with support from the 65 member states of the High-Ambition Coalition.

While recognising that “this is an issue characterised by divergent views”, Rwanda’s negotiator told delegates “there is at least a convergence on the desire to develop an instrument that is fit for purpose guided by science – and to do so, the question we must ask is what are sustainable levels of production and consumption?”

“Science tells us that current and projected levels of plastic consumption and production are unsustainable and far exceed our waste management and recycling capacities. Moreover, these levels of production are also inconsistent with the goal of ending plastic pollution and limiting global warming to 1.5C,” she added.

‘More than a number’: Global plastic talks need community experts

But governments including Russia, Saudi Arabia and India are opposed to focusing on production curbs. The Ecuadorian chair of the talks, Ambassador Luis Vayas Valdivieso, did not include production in the list of topics to be officially discussed further before the final negotiations in South Korea.

Instead, he proposed expert groups on how to fund efforts to tackle plastic pollution and on criteria for identifying types of plastic product “of concern”. Governments accepted this, finishing their discussions at 3am on Tuesday.

Compromise welcomed

Peru expressed disappointment at the decision not to focus on production – but Russia’s negotiator welcomed it, saying that issues like the design of plastics and recycling are the “cornerstone of the future agreement” and so the talks should focus on them.

India’s delegate said the negotiations should be conducted in “a realistic manner and with consensus”, adding that “plastics have played an important role in development of our societies”.

Saudi Arabia’s negotiator praised the talks’ chair for “looking into those topics that bring convergence”, while many countries including China, the US and the European Union said the Ottawa outcome was a good compromise.

Southern Africa drought flags dilemma for loss and damage fund

Late on the last night of the talks, the EU had proposed holding another full session of negotiations before Busan, but that was blocked by Russia, Saudi Arabia and Iran.

David Azoulay, an observer for the Center for International Environmental Law, accused developed countries that style themselves as leaders on plastics of giving up the fight “as soon as the biggest polluters look sideways at them”.

In response to the lack of progress on production curbs, a group of countries led by the Pacific island nation of Micronesia put out a statement promising to continue talking informally about the issue and to keep it on the agenda. Thirty-two countries signed the “Bridge to Busan” initiative, including Nigeria, France and Australia, and more are expected to join later.

Micronesian negotiator Dennis Clare told Climate Home that its signatories “recognise that we cannot achieve our climate goals, or our goal of ending plastic pollution, without limiting plastic production to sustainable levels”.

Delays, intimidation and harassment

The four rounds of talks held since 2022 have been marked by delays, which some observers say are deliberate tactics by countries like Saudi Arabia and Russia.

At the second session in Paris last May, negotiators spent two days discussing voting rules, an issue which many thought had already been resolved.

And the third round in Nairobi in November failed to agree on intersessional work leading to Ottawa, after opposition from Russia and Saudi Arabia.

In Ottawa, the meeting was marred by complaints of intimidation and harassment from campaigners and scientists against some of the 196 lobbyists from the plastic and fossil fuel industry present in the halls.

Tensions rise over who will contribute to new climate finance goal

Bethanie Carney Almroth, a ecotoxicology professor at the University of Gothenburg who co-chairs the Scientists’ Coalition for an Effective Plastics Treaty, wrote a formal complaint to the United Nations Environment Programme (UNEP), the body that organises the talks.

She said she had been “verbally harassed, yelled at and subjected to unfounded accusations” by a male delegate from a plastics company, who interrupted her remarks to criticise an aspect of scientific research on plastics which he falsely said she was involved in.

In a separate complaint to UNEP, Almroth said plastics industry delegates had eavesdropped on scientists’ conversations, aggressively surrounded them and criticised their work, and “harassed and badgered several of our younger scientists”.

Marcos Orellana, the UN special rapporteur on toxics and human rights, said on X that it was “extremely worrying to hear about intimidation and harassment of scientists by industry”, adding “there should be zero tolerance for industry misconduct”.

Pro-plastic ads

Almroth told Climate Home that delegates were also faced with pro-plastic adverts at Ottawa airport, as well as on buses and taxis. “The entire city of Ottawa has been completely blanket-wallpapered in propaganda and pro-plastic and anti-UN campaigns,” she said.

Photos of these adverts seen by Climate Home show that some do not declare who paid for them, while others say they are sponsored by a right-wing lobby group called the Coalition of Concerned Manufacturers and Businesses of Canada (CCMBC).

I’m at #INC4 in Ottawa, reporting on the #PlasticsTreaty. The conference itself is plastic-free (food sold at the venue is wrapped in paper), but these ads are plastered in the hotel next door where events are being held pic.twitter.com/Bu8b6jawqG

— Lisa Song is @lisalsong.bsky.social (@lisalsong) April 24, 2024

The CCMBC’s president, political activist Catherine Swift, drove a van around the conference centre with pro-plastics adverts on it. In an interview next to the van with Rebel News, she claimed that plastics are “almost infinitely recyclable” and that recycling is the solution to plastic pollution. Passers-by tell Swift and Rebel News in the online clip that the adverts are “kind of weird” and that “plastic is killing the planet”.

The CCMBC does not systematically declare its donors. But videos from its 2023 gala dinner reveal that its sponsors include oil and gas companies like NuVista, TC Energy and plastics company Husky, whose CEO John Galt has appeared on the CCMBC’s Youtube channel.

“This is big money. This is high stakes,” said Almroth. “Plastics is the fossil fuel and the petro-chemical industry’s plan B. As we shift away from fossil fuels as an energy source, they’re putting their bets on plastics and we’re a threat to them.”

(Reporting by Joe Lo; editing by Megan Rowling)

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He added those countries should be “leading from the front” through much deeper emissions cuts, and bigger and better climate finance.

A day later, the gathering of the most powerful industrialised democracies responded with a tepid outcome, serving up a new commitment on ending coal power generation – weakened by a loophole in the language – a rehash of previous pledges and nothing new on climate finance, this year’s top priority in climate diplomacy.

For the first time, G7 countries all agreed to end the use of coal power generation in their energy systems “during the first half of the 2030s”.

While most members of the bloc are already planning to phase out coal before 2035, the commitment marks a step forward for Japan, analysts said. The Asian nation generates over a quarter of its energy from coal and, alongside Germany and the United States, had previously blocked international efforts towards setting a target date to shut down coal power plants.

Germany has written into its legislation a final target to exit coal by 2038 at the latest, but the government now intends to pull that forward to 2030. The United States unveiled new regulations last week under which coal plants planning to stay open beyond 2039 will have to cut or capture 90 percent of their carbon dioxide (CO2) emissions by 2032.

Not enough

But the G7 coal-power agreement struck on Tuesday in Turin, Italy, comes with a caveat that gives countries an alternative choice to phase out coal “in a timeline consistent with keeping a limit of 1.5°C temperature rise within reach, in line with countries’ net-zero pathways”.

Gilberto Pichetto Fratin, Italy’s minister for environment and energy security, told journalists at the end of the summit that the text “for the very first time uses a deadline, wherever possible”.

“G7 countries undertake to phase out the use of coal without jeopardising the various countries’ economic and social equilibrium,” he added.

Researchers say that, even if countries do stick to the mid-2030s deadline, it will not be enough to limit global warming in line with the goals of the 2015 Paris Agreement.

G7 countries need to phase out coal from power generation by 2030 at the latest, and gas by 2035, according to a recent analysis done by Berlin-based policy institute Climate Analytics.

G7 climate and energy ministers meet at the Reggia di Venaria Reale in Italy. Photo: G7 Italy

“It’s notable that gas has not been mentioned [in the G7 ministerial agreement],” said Jane Ellis, head of climate policy at Climate Analytics, pointing at increased investment in domestic gas facilities. “This is absolutely the wrong direction to be heading in – both economically and for the climate.”

In their final communique, ministers said that “publicly supported investments in the gas sector can be appropriate as a temporary response, subject to clearly defined national circumstances”, in their efforts to reduce dependency on imported Russian fossil fuels.

They also repeated a previous commitment to eliminate “inefficient fossil fuel subsidies by 2025 or sooner”, without providing a clearer definition of “inefficient” or details on how that goal would be achieved.

Fossil fuel subsidies across G7 countries hit an all-time high of $199.1 billion in 2022, according to analysis by IISD and the OECD. “It’s very clear they are not going to meet that target,” said Farooq Ullah, senior policy advisor at IISD.

No progress on climate finance

This week’s ministerial meeting in Italy also failed to significantly move the needle on climate finance, as UN negotiations on a new collective quantified goal (NCQG) at COP29 in November are starting to gather pace.

G7 countries said in their final text they “intend to be leading contributors to a fit-for-purpose goal” and acknowledged the need for “mobilising trillions”, but stopped short of making any new financial commitment or offering clear ways forward.

The existing goal is set at $100 billion a year, but developing countries – excluding China – need an estimated $2.4 trillion a year to meet their climate and development needs, leading economists have said in a report commissioned by the Cop26 and Cop27 presidencies.

In order to loosen the purse strings, it is crucial that every minister across government cabinets – and especially finance ministers and treasurers – “push climate action into high gear”, the UNFCCC’s Stiell said on Monday.

But, according to Luca Bergamaschi, director of Italian think-tank ECCO, they appear “not to be caring enough about climate finance”.

“Climate ministers are hitting a wall on climate finance. These decisions rest on finance ministers so they need to step up, and step in, because they have the power and responsibility to do so,” he told Climate Home.

Meetings of G7 finance ministers in mid-May and country leaders in June are seen as last-ditch opportunities to push things forward.

Experts believe an ambitious deal on climate finance at COP29 can play a crucial role in getting developing countries, especially the poorest ones, to commit to stronger action on curbing emissions and boosting adaptation as they draft their new national climate plans due early next year.

The G7 ministers in Italy made a firm pledge to submit their own such plans – called nationally determined contributions (NDCs) – by the February 2025 deadline “with economy-wide, absolute reduction targets” that cover all greenhouses gases and sectors “in line with 1.5C”. They also called on other major economies to do the same.

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Many countries in the Global South are burdened with huge public debts. These rising debts are a drain on public resources that are urgently needed for sustainable development programmes, and further pressure Southern governments to prioritise debt service over climate actions. 

Global South countries allocate more funds for debt service – 65% in lower- income countries and 14% in lower-middle-income countries – than their combined budgetary spending for education, health and social protection.  

Included among the public debts of Global South countries are those from projects tainted with fraud and whose negative impacts on people, economies and the planet far outweigh the benefits, if any. Furthermore, many debts arose from projects that did not involve democratic consultations nor the free, prior and informed consent of affected communities including indigenous peoples. Prime examples of these debts are those arising from or related to fossil fuel projects. These debts should be seen and treated as illegitimate.   

World Bank climate funding greens African hotels while fishermen sink

For several decades, international financial institutions and public finance institutions have lent hundreds of billions of dollars to Southern governments to support fossil-fuel energy projects. Many of the loans extended by the World Bank, Asian Development Bank (ADB), and other public finance institutions such as the Japan Bank for International Cooperation (JBIC), remain part of the current outstanding public debts. 

There is already a clear consensus among governments and many public financial institutions that fossil fuel energy – from its extraction, production and consumption – is the main driver of climate change.  

This is evidenced by outcomes from the Conference of Parties (COPs) summits of the UN Framework Convention on Climate Change, calling for the phase-out or transition away from fossil fuels, as well as outcomes from G7 and G20 summits committing to the phase-out of fossil fuel subsidies. Individual governments including China and Korea, have announced decisions to stop their financing of overseas coal projects. Further evidence is in the decisions made by public financial institutions to stop or phase out financing of coal and fossil fuels.   

These decisions, commitments and policy shifts should be taken as acknowledgement of their co-responsibility in the promotion of fossil fuels and the harms fossil fuel projects have caused to people, communities, the environment and climate systems. 

Owning up to their co-responsibility for fossil fuel projects and their impacts, and consistent with their avowed commitments to combat climate change, governments and public financial institutions, including international financial institutions, should cancel all outstanding public debts that arose from fossil fuel projects. These outstanding debts may be transformed into grants for renewable energy systems.  

UN climate chief calls for “quantum leap in climate finance”

The same can be said for private banks, financial and investment institutions and corporations that have lent money to governments for fossil fuel projects. Many have also recognised fossil fuels as the main drivers of climate change and have shifted their policies towards reducing or phasing down their lending and investments in coal and fossil fuels.   

From April 17 to 19, the IMF and the World Bank (IMF-WB) will hold their Spring Meetings in Washington D.C. These meetings take place amidst an ever-worsening debt crisis, most harshly felt by 3.3 billion people living under governments that spend more on interest payments than education or health.  

Bankruptcy risk from climate spending  

A new report released on the eve of the meetings found that developing countries will pay a record $400 billion to service external debt this year. It said climate spending could bankrupt developing countries due to huge debt costs and called for debt forgiveness for those most at risk. The report from the Debt Relief for Green and Inclusive Recovery Project (DRGR) warned 47 developing nations would reach external debt insolvency thresholds in the next five years if they invested the necessary amounts to meet the 2030 Agenda and Paris Agreement goals.

Spring Meetings can jump-start financial reform for food and climate

It is deplorable that the IMF-WB continues to push loans as the solution to multiple crises facing developing countries, including loans for climate action. At the height of the COVID-19 pandemic, when financial resources were most urgently needed, they supported and promoted the debt relief schemes of the G20 and Paris Club for the mere postponement of debt payments. These have all but proven flawed and futile. The suspended payments fall due in 2025 – by which time debt accumulation will have sped up even more. Private and commercial lenders, who now hold over 60% of sovereign debt, remain free to refuse participation in debt reduction. 

Total public debt, domestic and external, reached $92 trillion in 2022, increasing five-fold since 2000. Southern governments account for almost one-third of the total debt and are accumulating debt much faster than their richer counterparts. The number of countries with public debt levels exceeding 60% of GDP continues to rise, from 22 in 2011 to 59 in 2022. The long-term public external debts alone of low- and middle-income countries, excluding China, amount to a staggering $3.3 trillion. 

The consequences of World Bank projects, coupled with IMF neoliberal, policies have been devastating for vulnerable communities in the Global South. Large-scale infrastructure projects financed by the World Bank have led to displacement of communities, loss of livelihoods and destruction of ecosystems, and in the process, deepened inequality and impoverishment. Its fossil fuel subsidies and project loans impacted communities already struggling to survive economic hardships and environmental degradation. It also continues to subsidise the fossil fuel industry through direct and indirect financing, estimated at $885 million in 2022 and at least $194 million in 2023.  

The World Bank and the IMF, now in their eighth decade of committing to fight poverty, have yet to account for loans that are clearly illegitimate and must be canceled outright, nor for harsh loan conditionalities that have deepened inequality and impoverishment.

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I was six when I started catching shrimp in the waterways of Louisiana. I inherited the livelihood that sustained my father, grandfather, and generations before them. My boat in the Gulf of Mexico is my second home. But I may lose it all – in part to Japan’s dangerous investments in fossil gas.

Eight years ago, fossil fuel companies and their government allies moved Liquefied Natural Gas (LNG) projects into the region and turned our fishing community upside down. The Calcasieu Pass LNG export terminal was just 300 feet from my house, and promised “deep-water access, proximity to plentiful gas supplies and ease of transport for buyers”. Vibrations from its operations were so intense they knocked pictures off my wall. My wife suffered a heart attack, and my children were frequently ill. Facing dire health consequences and daily interruptions, my family was driven from our home.

Most people don’t realize that Japan is bankrolling LNG and the destruction along the US Gulf Coast. Japanese private banks MUFG, Mizuho, and SMBC are the first, second, and third biggest financiers of LNG export projects in the US. These banks have committed more than $13 million,  $11 million, and $10 million respectively to US-based LNG projects.

On April 10, Japanese Prime Minister Fumio Kishida will meet with President Joe Biden in Washington, DC to discuss the US and Japan’s commitment to promoting stability in the world and the advancement of clean energy supply chains. Biden clearly understands the need to take a hard look at the impacts of future LNG development as indicated by the pause he announced recently.

His administration has called the climate crisis the “existential threat of our time,” and sees the US as a champion to support other world leaders’ transition to green energy. But my family, and so many around me, are still waiting for change.

Travis Dardar drives his boat on the water with the Calcasieu Pass LNG terminal shown in the background. (Photo: Susanne Wong / Oil Change International)

Massive LNG tankers now crowd the water and wildlife is disappearing. Before the Calcasieu Pass LNG terminal started operating last year, local fishermen caught about 700,000 pounds of shrimp annually. The shrimp catch is now down nearly 90%, with no compensation for losing our livelihoods.

The devastating impacts of LNG on communities like mine and our unwavering opposition is the reason why in January President Biden paused LNG export approvals. The US Department of Energy is supposed to consider how to determine whether these projects are in the public interest and to take into account impacts on communities, ecosystems, and climate. Unfortunately, Energy Secretary Jennifer Granholm recently indicated this pause could be lifted within the year, when what we really need is for President Biden to stop all new LNG export projects for good.

European court rules climate inaction by states breaches human rights

Increasingly, the international community recognizes fossil fuels’ toxic effects on the environment and communities and the momentum is shifting towards clean energy.  Yet, Japan is still driving the expansion of gas and LNG in the US, across Asia and globally. In spite of Japan’s declining LNG demand at home, Japan is staking its economic growth on pushing governments across South and Southeast Asia to import LNG.

I invite Prime Minister Kishida to travel on my boat while he is in the US to see for himself the impact of Japan’s dirty energy projects on Gulf communities.

Air pollution hits health

Health deterioration in my community is unsurprising, given the plant’s pollution emissions. Long-term exposure to LNG chemicals can lead to heart disease and certain types of cancer, and living near a pollution center has been linked to increased stress, depression, and other mental health problems.

According to research by the Louisiana Bucket Brigade, the Calcasieu Pass LNG export terminal violated its air pollution permits on 286 of the first 343 days it was in operation – 83% of its first year. Rather than working to clean up its operations, Venture Global, the gas company behind the LNG facility, petitioned the state air quality agency to increase its allowable pollution limits. If the gas project already built can’t even follow pollution regulations, how can we expect the two plants posed for construction upstream to do so?

Despite this, the Gulf area buzzes with Japanese LNG operations. The proposed Calcasieu Pass 2 terminal is part of a 20-year contract with JERA, Japan’s largest gas company and the world’s largest LNG buyer. JERA agreed to buy 1 million tons of LNG annually from the project. INPEX, Japan’s largest oil and gas producer, also signed a 20-year contract to buy 1 million tons of LNG annually. These corporate operations and their profits are behind Japan’s push to expand LNG markets around the world.

Zambia’s fossil-fuel subsidy cuts help climate and kids – but taxi drivers suffer

Japan has developed a regional initiative, the Asia Zero Emissions Community, that will expand and prolong the use of fossil fuels by proposing to abate their emissions. This is a greenwashing effort to push governments in Asia to adopt dangerous distractions like hydrogen, ammonia, and carbon capture and storage. In reality, this will expand and prolong the harm of fossil fuels on communities like mine.

Although Biden’s pause on LNG export authorizations is a step in the right direction, it’s hard to celebrate here in Cameron Parish. LNG tankers dominate the water, and fishers are left to collect the scraps of our communities and livelihoods. Even with the setbacks, our community hasn’t given up hope. I founded Fishermen Interested in Saving Our Heritage (FISH), a united front that will fight to protect our homes, the environment, and access to the Gulf waters. We are focused on saving our way of life.

As the largest LNG exporter in the world, the US holds major influence in this tainted market. During their upcoming meeting, I urge Prime Minister Kishida and President Biden to recognize our future in renewables and stop sacrificing frontline communities for profit.

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But oil, gas and coal producers are still closing their ears. In 2023, they continued spewing near record-high amounts of methane into the atmosphere, according to the latest assessment by the International Energy Agency (IEA) released on Wednesday. That is despite a raft of promises to stop doing so.

Now, however, analysts believe the tide may finally be turning. The introduction of stronger regulations in key fossil fuel-producing and consuming countries, coupled with better monitoring and transparency of harmful leaks, gives them cause for optimism.

“While emissions are still very high, 2024 is going to be a watershed moment on action and transparency on methane,” said Christophe McGlade, head of the IEA’s energy supply unit.

Methane role in 1.5C goal

Methane is a major contributor to global warming. Although it remains in the atmosphere for a much shorter time than carbon dioxide, it is 84 times more potent over a 20-year time horizon.

The energy sector represents the second-largest source of methane emissions linked to human activity, after agriculture, and has the biggest potential for reduction, according to analysts.

“If we can’t make real progress in cutting down methane, it is going to be impossible to limit warming to 1.5C,” said McGlade, referring to the most ambitious warming goal in the Paris Agreement.

The IEA estimates that the fossil fuel industry needs to reduce methane emissions 75% by 2030 for the world to reach net-zero greenhouse gas emissions in 2050.

But last year methane emissions from fossil fuels remained near a record high first reached in 2019, rising slightly from 2022 to 120 million tonnes, according to the watchdog. The United States and China are by far the largest emitters of the powerful gas from oil and gas operations and the coal sector respectively.

Leaks from old or poorly maintained infrastructure and the practice of flaring – burning of excess gas – at oil and gas wells are the main energy-sector culprits for putting methane in the atmosphere.

Easy-fix

Reining in those emissions does not require rocket science. The IEA says well-known technologies and measures, such as upgraded equipment and more efficient practices, can cut the bulk of methane generated from fossil fuels in a fast and cheap way.

Just less than half of last year’s emissions could have been avoided at no net cost to the producers, with measures paying for themselves thanks to revenues from the additional gas captured. “It was a massive missed opportunity,” McGlade said.

Fossil fuel firms seek UN carbon market cash for old gas plants

If this is such a win-win, it begs the question of why fossil fuel producers are not stepping up to the plate. Lack of awareness over the scale of emissions and longer return on investment from plugging leaks are cited in the report as extenuating circumstances.

For Mark Brownstein, methane expert at the Environmental Defense Fund, up until very recently methane had simply been ignored by the global community as a serious threat.

“Aggressive action on methane is long overdue, but we are unfortunately still at a relatively early stage,” he told Climate Home. “Only now we’re starting to see some coordinated action from companies and countries to address this pollutant.”

Raft of pledges

More than 150 countries have signed up to a commitment first announced at the Cop26 climate summit in Glasgow to reduce global methane emissions by at least 30% from 2020 levels by the end of this decade.

Last year’s Cop28 in Dubai produced a host of new promises. The Global Stocktake assessment of national climate plans called for countries to substantially cut methane emissions. Meanwhile, more than 50 oil and gas companies pledged to speed up emission reduction efforts.

But for Romain Ioualalen from campaign group Oil Change International, the industry’s words only go so far. “The climate arsonists fuelling climate chaos cannot be trusted to put out the fire,” he said. “Government must take action to force the industry to clean up its mess on its way out the door.”

New regulations are now in the pipeline and provide experts with the biggest hope that things will finally move in the right direction.

Rules and satellites

In December 2023, the United States finalised new rules aimed at cracking down on U.S. oil and gas industry releases of methane. These include measures to eliminate routine flaring and force producers to better monitor leaks from equipment. Neighbouring Canada has also announced a new proposal for beefed-up methane-cutting standards.

Across the ocean, the European Union agreed at the end of last year on a new law that will require companies to report emissions, monitor and fix leaks, and limit flaring. Crucially, the rules will also apply to imports of oil, gas and coal into the bloc, effectively forcing overseas producers to improve their standards.

Despite Putin promises, Russia’s emissions keep rising

Alongside policy developments, the ability to track methane emissions is continuously improving – mainly thanks to satellite technologies – leaving polluters with less room to hide.

Advances on this front are expected to continue in 2024. MethaneSAT, a new satellite developed by EDF, was launched into space in early March and will soon provide free, near-real-time access to methane emissions data from wide areas that have so far been overlooked.

“This data will not only assist in the implementation of regulatory requirements, but it will also underpin the commitments made by fossil fuel companies at Cop28,” said Brownstein. “All of this is finally pointing us in the right direction.”

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At the Cop28 climate summit last December, governments agreed to set up a new global carbon credit market under Article 6.4 of the Paris Agreement – and a host of fossil fuel firms and their middlemen are now trying to cash in by making their projects eligible for trading.

Developers applied for thousands of projects to be transferred over from the old discredited Clean Development Mechanism (CDM) to the new market that will be established, before the deadline of January 1 this year.

Most of these projects are for renewable energy – which, while good for the climate, have stirred debate. Critics argue that they do not need additional funding from selling carbon credits because they are profitable without it.

However, more controversial are ten projects Climate Home News has identified, based largely in Asia, which backed the construction of power plants that run on natural gas, one of the fossil fuels governments agreed to transition away from at Cop28. 

If approved by their host nations, the projects would transfer more than 10 million old gas-linked credits – equivalent to the reduction of 10 million tonnes of carbon dioxide (CO2) emissions a year – to the new Paris carbon market.

“These projects are entirely inappropriate,” said Carbon Market Watch researcher Jonathan Crook. “Some were registered as far back as 2009. It’s unreasonable to assume they expected to rely on revenue from a new market mechanism in 2024 – not to mention that these projects may lock in fossil fuel emissions and infrastructure for years to come, among other issues.”

Clean, cheap or fair – which countries should pump the last oil and gas?

The Integrity Council for the Voluntary Carbon Market was set up in 2021 in a bid to ensure that carbon credits deliver on the emissions reductions they have promised and have a positive impact for the climate. In its categorisation of different types of carbon credit, offsets issued for gas-fired power plants are given the worst ranking.

Similarly, BeZero, a ratings agency for carbon credit projects, looked at three of the CDM gas projects that have applied for transfer to the new market. It gave them a ‘C’ grade, meaning they “provide a very low likelihood” of reducing emissions by as much as they claim. 

It cited the “minimal impact” of carbon credit revenues on the project’s overall financial situation and the risk of methane leaks from gas infrastructure that would make the projects more polluting than asserted.

Chinese gas-fired plant

The biggest project is a gas-fired power plant built by China’s state-owned oil and gas company CNOOC and Japanese conglomerate Mitsubishi in 2010 in the province of Fujian, China, just across the sea from Taiwan.

To fire the plant’s four turbines, CNOOC and Mitsubishi imported gas from an Indonesian gas field called Tangguh, which they both had stakes in, through the CNOOC-owned Fujian gas import terminal.

In addition to the income they received from selling the gas, importing it through the terminal and then selling the electricity it produced, they also submitted an application to the CDM to develop and sell carbon credits linked to the plant.

By their own calculations, the plant would emit 2.3 million tonnes of CO2 a year when fully operational. But if they didn’t build it, they said the electricity would come from coal, emitting over 5.3 million tonnes of CO2 a year. So they claimed credits for reducing the amount of CO2 that would have entered the atmosphere by an annual 3 million tonnes.

Justifying this assumption, they said that oil was too expensive and zero-carbon alternatives were not viable as an alternative. Most of Fujian’s hydropower potential had already been tapped, while wind power was “just start-up” and “of seasonal nature”, they added. They did not even mention solar power  – now the cheapest electricity source.

However, coal’s main competitors in the province are not gas but nuclear and hydro, power sources that do not emit greenhouse gases. Wind power has also grown rapidly in the province since the gas-fired plant was built.

Lauri Myllyvirta, a senior fellow with the Asia Society Policy Institute, told Climate Home: “The premise that power generation growth would come from coal if a new fossil gas plant wasn’t built was never true and certainly is not true today.”

Mitsubishi withdrew from the carbon credit project in 2022. While CNOOC remains involved, the main project participant is now a company called Europe New Energy Investment Capital, run by a Chinese citizen called Dongquan Yang.

A spokesperson for CNOOC said the project “is out of the scope of CNOOC Limited’s business operations”. Asked how that was compatible with CNOOC Fujian Gas Power Co., Ltd being listed as an authorised participant, the spokesperson did not reply. 

Indian carbon-credit developer

Fossil fuel firms are not the only ones trying to monetise carbon offsets from existing gas power plants. Documents show that Indian company EnKing – which has since changed its name to EKI Energy Services Ltd and claims to be the world’s biggest developer of carbon credits – is involved in three of the Indian gas power projects identified.

Last August, Climate Home revealed that EnKing vastly overestimated the benefits of carbon offsets linked to cookstoves in rural India and helped sell those junk credits to oil and gas giant Shell.

Cooking the books: cookstove offsets produce millions of fake emission cuts

Working with fossil fuel companies, EnKing used a methodology (AM0025), under the old Clean Development Mechanism, to derive credits from the building of gas-fired power plants in India.

The successor to this methodology is still technically up and running – but Verra, one of the main international carbon credit verifiers, has declared it inactive due to lack of use.

According to Crook of Carbon Market Watch, it is “extremely unlikely” that this type of methodology will be applicable under Article 6.4, which will govern the new UN carbon market when it launches. EnKing did not reply to a request for comment.

‘Not good practice’

To oversee the new carbon market, governments have agreed to set up an Article 6.4 supervisory body, made up of government climate negotiators. But the rules agreed for it so far offer little power to reject old CDM credits from gas-fired power plants. 

The host countries of those projects – including China and India – could refuse to authorise them, but they could still be sold, branded as “mitigation contribution units” under Article 6.4.

These are a lower class of carbon credit agreed at Cop27 which do not require authorisation by the host country as it does not need to do a “corresponding adjustment” for them, which means wiping the credits’ emissions reductions from its accounts.

Carbon credits talks collapse at Cop28 over integrity concerns

Mitigation contribution units cannot be counted towards national emissions goals set under the UN climate process, but they can be bought by companies and used for other purposes. That means the firms trying to sell carbon credits from old gas power stations just need to find buyers to make a profit.

Crook said such deals “wouldn’t be good practice”. “Retiring these credits paradoxically rewards fossil fuel companies for locking in emissions,” he added.

The post Fossil fuel firms seek UN carbon market cash for old gas plants appeared first on Climate Home News.

Beijing is aiming to reduce its energy intensity –  the amount of energy consumed per unit of its gross domestic product – by 2.5% in 2024, according to a government policy work plan published on Tuesday at the opening of the annual National People’s Congress.

The target falls short of the rate of reduction needed to hit a goal of slashing energy intensity by 13.5% in the five years to 2025, energy analysts noted.

China is already lagging way behind that goal. Energy intensity fell by only 2% between 2020 and 2023 as the country powered its economic growth with carbon-intensive sources like coal, recent analysis by the Helsinki-based Centre for Research on Energy and Clean Air (CREA) found.

‘Admitting defeat’

“China is effectively admitting its failure to fulfill the five-year target,” Li Shuo, director of the China Climate Hub at the Asia Society think-tank, told Climate Home. “This year’s target is even more modest than the average rate of reduction needed, while they should be playing catch up.”

Lauri Myllyvirta, a senior fellow at the Asia Society and co-founder of CREA, said that China is “basically admitting defeat” with this “very important metric”.

“The [2.5%] target is completely inadequate to get China back on track towards its 2025 goals,” he added. “It is very alarming that the government is not articulating a plan on how they are going to hit an internationally-pledged target.”

How to hold shipping financially accountable for its climate impacts

The energy intensity goal is one of the main climate commitments made by the Chinese government in its current five-year plan and is also referenced in the country’s nationally determined contribution (NDC), submitted to the UN under the Paris Agreement.

China set the target in 2021, but a year later it watered down the rules when it stopped counting energy consumption from renewable sources. “It’s essentially a fossil-fuel intensity target now,” said Myllyvirta.

A similar goal of reducing China’s carbon intensity – CO2 emissions per unit of economic output – by 18% is also at serious risk of being missed unless emissions fall dramatically over the next two years.

Emission cuts vs growth

China is the world’s biggest carbon emitter and juggles its emissions-cutting targets with Beijing’s desire to boost economic growth and maintain energy security.

The Asia Society’s Li said this year’s government work plan “does not really prioritise climate and environmental issues in light of the difficult domestic economic conditions”.

Germany uses funding to pressure climate groups on Israel-Gaza war

It does, however, indicate strong support for clean energy, saying the government will “further advance the energy revolution” and “strengthen the construction of large-scale wind power and photovoltaic bases”.

But it also says the government will continue to recognise the role of coal power in its energy system and “increase the exploration and development of oil and gas”, suggesting China is not yet planning to start transitioning away from fossil fuels, as countries agreed to do at Cop28 in December. 

Renewables and coal leader

The country is already both a global leader in renewable energy and a primary backer of coal power.

In 2023 it doubled its solar capacity after installing as many solar panels as the whole world had done in the previous year, according to the International Energy Agency. Wind power capacity also rose by 66% last year.

But it also has more than half of the coal-fired generating capacity operating globally. That is likely to increase as China has more coal power capacity under construction than the rest of the world combined, according to an analysis by the Global Energy Monitor.

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Steep cuts in CO2 emissions, mainly from burning fossil fuels, will be needed in the coming years if targets to limit a global rise in temperatures and prevent runaway climate change are to be met, scientists have said.

“Far from falling rapidly – as is required to meet the global climate goals set out in the Paris Agreement – CO2 emissions reached a new record high,” the IEA said in a report.

Global emissions from energy rose by 410 million tonnes, or 1.1%, in 2023 to 37.4 billion tonnes, the IEA analysis showed.

A global expansion in clean technology such as wind, solar and electric vehicles helped to curb emissions growth, which was 1.3% in 2022. But a reopening of China’s economy, increased fossil fuel use in countries with low hydropower output and a recovery in the aviation sector led to an overall rise, the IEA said in its report.

Moves to replace lost hydropower generation due to extreme droughts accounted for around 40% of the emissions rise, or 170 million tonnes of CO2, it said.

“Without this effect, emissions from the global electricity sector would have fallen in 2023,” the IEA said.

Energy-related emissions in the United States fell by 4.1% with the bulk of the reduction coming from the electricity sector, according to the report.

In the European Union emissions from energy fell by almost 9% last year driven by a surge in renewable power generation and a slump in both coal and gas power generation.

In China, emissions from energy rose by 5.2%, with energy demand growing as the country recovered from COVID-19-related lockdowns, the report said.

China, however, also contributed around 60% of global additions of solar, wind power and electric vehicles in 2023, the IEA said.

Globally electric vehicles accounted for one-in-five new car sales in 2023, reaching 14 million and up 35% on the level of 2022.

The post Global energy-related CO2 emissions hit record high in 2023 – IEA appeared first on Climate Home News.

But, while lots of countries are trying to reduce their use of planet-heating fossil fuels, only a handful have so far taken measures to produce less – particularly when it comes to oil and gas.

Last year, a United Nations report found that governments plan to produce more than double the amount of fossil fuels in 2030 than they should if global warming is to be limited to 1.5C. So they need to cut back. 

The International Energy Agency (IEA) says no more new fossil fuel production projects are required, yet we will still need fossil fuels for the next few decades to keep economies running. That raises the question of who should get to drill, pump and sell those last supplies – and why?

Indonesia turns traditional Indigenous land into nickel industrial zone

Climate Home looked at three key criteria for the production of oil and gas. Unlike the other dirtiest fossil fuel – coal – they tend to be located together and so are produced in the same regions by the same nations. And the IEA predicts that their use will outlive that of coal.

We’ve looked at whose oil and gas is the cleanest, whose is the cheapest, and whose economy could most handle losing out on oil and gas revenue. Depending on the metric, the results differ wildly.

The cleanest oil and gas comes from Norway and the Arabian Gulf, the cheapest is in the Gulf. But when global economic justice is considered, the fairest is in smaller nations in the developing world – the likes of Libya, Trinidad and Tobago, and Turkmenistan.

Cleanest production?

Given the world will be using oil and gas for some time to come, shouldn’t we use that which causes the least damage to the planet?

While all oil and all gas is equally damaging to burn as fuel, the process of pumping it up from the ground can be more or less harmful to the climate.

Norway and the United Arab Emirates make this argument, arguing their oil and gas is the cleanest – and a November 2023 report by the IEA backs them up. 

It found that Norway’s oil and its gas were the cleanest in the world to produce, measured by emissions intensity, while supplies from the UAE and other Gulf nations like Saudi Arabia and Qatar were also among the least damaging.

Norway’s oil and gas are cleaner because it has strict rules in place, requiring oil and gas producers to capture any methane gas that leaks during the production process. This prevents it from reaching the atmosphere and making climate change worse. 

On top of this, much of the machinery used to produce the oil and gas doesn’t run on fossil fuels itself but on clean electricity.

A handful of Gulf states – including Saudi Arabia, Qatar, Kuwait and the UAE – have lower-intensity operations in part because of their “easy to access” reserves. As the oil is nearer the surface, less energy-guzzling machinery is needed to pump it up.

But the emissions from producing the oil and gas need to be put in perspective. It is the use of those fuels that has the biggest consequences. Just 5-20% of oil and gas companies’ total emissions are from production, according to energy consultancy Wood Mackenzie.

Cheapest energy?

Or should we use the cheapest oil and gas? The cheaper those fuels are to produce, the cheaper it should be to use our power plants, polyester and petrol. Those savings should be passed onto consumers around the world when they fill up their vehicles or switch on their lights.

This was an argument deployed by Amin Nasser, the head of oil giant Saudi Aramco, who told reporters at Davos in 2019: “There will continue to be growth in oil demand … We are the lowest-cost producer and the last barrel will come from the region.”

Gulf nations like Saudi Arabia again score well on this. As their oil and gas is near the surface, it’s cheaper to pump.

In the IEA’s “low cost” scenario, in 2040, Qatar, Saudi Arabia, Iraq and Iran increase their oil and gas production the most. More expensive producers like Canada, Australia and China have to cut down how much they pump.

Fairness and capacity?

Or should the governments that cut back on oil and gas output first be the historically large emitters that can most afford to go without the money they get from selling fossil fuels? 

It’s an argument made by many African nations. Ahead of Cop28, African negotiators unsuccessfully proposed a ban on developed countries exploring for fossil fuels “well ahead of 2030, whilst affording developing countries the opportunity to close the global supply gap in the short term”.

Climate Analytics analyst Neil Grant argues we must take “capacity to transition” into account when thinking about who should be the last producers. A Carbon Tracker report found at least 28 oil and gas-reliant economies would lose half of their expected revenues under just a “moderate-paced transition” – so there is a lot at stake.

US trade agency backs oil and gas drilling in Bahrain despite Biden pledge

Greg Muttitt, from the International Institute of Sustainable Development, told Climate Home that if the transition is left to market forces, “a lot of people” in oil and gas-dependent economies will “get hurt”, either by losing their jobs, or experiencing a breakdown in public services. 

At Cop28, a network of civil society groups published a report assessing which countries should be the last to extract fossil fuels, accounting for both economic dependence, and climate equity. 

Using a measure of financial “capacity”, defined as surplus income above “what is required to meet people’s needs”, the report found that Libya, Iraq and South Sudan should be among the last countries extracting oil, while Algeria, Trinidad and Tobago, and Turkmenistan are among the last extracting gas. The likes of Norway, Canada and Qatar should stop first for both, it concluded.

Whichever answer you chose, Michael Lazarus, co-author of the UN report and U.S. director for the Stockholm Environment Institute, told Climate Home he was pleased that “we have finally gotten to the point in the global conversation where folks are asking the question…of what that ultimate transition looks like.”

The post Clean, cheap or fair – which countries should pump the last oil and gas? appeared first on Climate Home News.

“Leading by example is obviously a key way to move forward and to show that the solutions are under our eyes,” she told a press conference, alongside ministers from Canada, Spain and other – mainly European – governments.

But, just two months later, in efforts to placate protesting farmers, her government U-turned on plans to remove subsidies for the fossil fuels that power agricultural machinery like tractors.

And the political fallout of the decision could reverberate beyond France’s borders, Sussex University international relations professor Peter Newell told Climate Home.

“It doesn’t send a good signal about these commitments if, at the first sign of trouble, richer countries relent for short-term, narrow electoral reasons,” he said.

The then French environment minister (second from left) posing for pictures after joining an initiative to end fossil fuel subsidies

The G20 group of big economies has been promising to phase out “inefficient” fossil fuel subsidies since 2009, but to little effect. Globally, explicit subsidies – undercharging for the supply costs of fossil fuels – more than doubled to $1.3 trillion in 2022, according to International Monetary Fund figures.

Bad example

Newell warned that France’s move “sends a signal that it’s okay to capitulate in the face of social pressure when it comes to difficult choices around fossil fuel subsidy reform”. 

It could spur on other groups to push back against similar reforms, he said. Farmers in Germany and Lithuania are also currently fighting plans to remove their fuel subsidies.

A team of researchers found that between 2005 and 2018, 41 countries had at least one riot associated with popular demand for fuel. Their study concluded that the removal of subsidies had often led to social unrest. In France in 2018, for example, the rising cost of driving sparked a wave of protests by the gilets jaunes (yellow vest) movement, leading to a rollback of fuel tax hikes.

French farm machinery produces about ten million tonnes of carbon dioxide equivalent a year, which is just over a tenth of France’s farming’s emissions, according to a recent analysis by the French government’s official climate advisers (HCC). 

About half of French agricultural emissions come from cows releasing methane through burps. Just over a tenth is from fossil fuel-based fertilisers, with smaller amounts from pigs, sheep and other sources.

French farmers currently receive an annual €1.7-billion ($1.8-bn) taxpayer subsidy to make the diesel that runs their machinery cheaper.

The HCC analysis says that about a tenth of farm machinery’s carbon pollution can be stopped through driving in a way that uses less fuel and engine maintenance.

To reduce emissions further, it recommends tractors should be converted to biodiesel or electric engines “as soon as possible to avoid the risks of lock-in” given that many tractors bought today will still be in use as France gets close to its deadline of reaching net-zero emissions in 2050.

Just transition

Stéphane De Cara, director of research at the French agricultural research institute INRAE, sees the failure to address this “low-hanging fruit” as a clear signal that France is “not moving in the right direction” when it comes to emissions targets.

But, he said, if the fuel subsidy were to be scrapped, then the money saved should be channeled back to poorer farmers so that they can invest in greener technology.

Since Cop28, Pannier-Runacher has been appointed to France’s agriculture ministry and put in charge of ecological planning, energy issues and the production of biomass. She has vowed to devote all her energy to “farmers and food sovereignty”.

Ahead of European elections in May, farmers’ protests have been dominating headlines across Europe, pushing their grievances over foreign competition and falling incomes, coupled with rising costs, up the political agenda. Some farmers have targeted climate and nature policies at the national and European Union levels.

According to Newell, right-wing political parties are using the issue as a “lightning rod for broader social discontent” as part of a “weaponisation” of climate policy across Europe ahead of June’s EU elections. 

Farming is the “new battle line in discussions around just transitions”, the researcher added. 

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The US Export-Import Bank (Ex-Im) – a federal export credit agency – is pushing ahead with plans to back the drilling of more than 450 new oil and gas wells in one of the oldest extraction fields across the Middle East.

Ex-Im’s board voted on Thursday to notify US Congress about the potential investment, a required step for projects over $100 million. Observers told Climate Home the Bahrain financing is nearly certain to be secured as early as next month.

At Cop26, the US joined 33 other countries in pledging to end direct public finance for overseas fossil fuel projects by the end of 2022. While most other signatories respected the commitment, the US approved over $2 billion in international fossil-fuel finance last year, according to an analysis by Oil Change International. Exim has been responsible for just under half of it.

“The United States is stalling momentum to end international public finance for fossil fuels globally”, said Nina Pušić, export finance climate strategist at Oil Change International. While the country can help “lead a shift of billions of dollars” from fossil fuels to renewables, approvals like this one “are a huge step backward”, she added.

Oil and gas expansion

Ex-Im’s financing in Bahrain would go towards a $4.2 billion programme to boost production in a nine-decades-old field where new reserves were discovered in 2018.

State-owned company Tatweep Petroleum plans to drill up to 34 new gas wells and more than 420 new oil wells, in addition to the construction of processing facilities and transport networks.

The programme is expected to free up reserves containing 5.2 trillion cubic feet of gas – nearly six times the amount of gas the Kingdom currently produces every year, according to company filings. Oil production should see a more modest uplift.

No new oil and gas extraction project should go ahead if the world wants to keep global warming below 1.5C, according to the International Energy Agency (IEA).

Pumping oil and gas from the expanded Bahraini field is expected to spew over 1.4 million tonnes of CO2 a year in the atmosphere by 2026 – nearly double the emissions recorded there in 2022, according to an environmental assessment submitted by Tatweep.

That does not include emissions generated from end consumers burning the fuels (known as Scope 3), which generally account for up to 90% of the carbon footprint of fossil fuel companies.

Running tensions

Ex-Im’s continued support for fossil fuels overseas has been a source of ongoing tensions.

Two members of an advisory group set up by the Biden administration to bolster Ex-Im climate considerations resigned last week following discussions over the Bahrain project.

Last year former special envoy John Kerry reportedly phoned Ex-Im’s chair Reta Jo-Lewis urging her to delay a decision to fund a nearly $100 million oil refinery expansion in Indonesia, according to Politico. But the agency went ahead with the vote and greenlit the project.

As the US official export credit agency, Ex-Im is influential in directing investment towards specific sectors by offering exporters government-backed loans, guarantees or insurance. The agency acts independently, but its board members are appointed by the US president and confirmed by the Senate. Joe Biden picked the sitting chair Jo-Lewis.

No clear guidelines

When president Biden took office in January 2021, he issued an executive order calling on federal agencies, including Ex-Im, “to identify steps through which the United States can promote ending international financing of carbon-intensive fossil fuel-based energy”. Months later, the US government signed up for the UN pact in Glasgow.

However, the Biden administration stopped short of directly forcing Ex-Im to adopt a fossil fuel exclusion policy.

“A key issue is the lack of clear guidelines from the US government to Ex-Im and other US agencies to explicitly prohibit new public fossil fuel support”, said Sherri Ombuya, a researcher at Perspectives who wrote a report about Ex-Im policies.

In 2023, Ex-Im approved just under $1 billion worth of funding for projects including an oil refinery in Indonesia and a credit facility to help commodity trader Trafigura sell more US liquefied natural gas (LNG). Oil and gas investments account for nearly a quarter of the agency’s portfolio.

Ex-Im’s arguments

Ex-Im has repeatedly justified its fossil fuel financing by pointing to a “non-discrimination” clause in its charter. The provision prevents the agency from rejecting funding applications just because they concern specific industries, such as oil and gas.

But Ombuya said that “is not a fully valid argument”. She added that Ex-Im’s board could turn down applications “if they don’t align with the US climate commitments which would effectively lead to the rejection of oil and gas projects”.

Ecuador’s new president tries to wriggle out of oil drilling referendum

Campaigners also argue that the agency could expand the use of existing tools to screen projects against certain thresholds of greenhouse gas emissions without singling out specific sectors. Ex-Im already applies criteria to projects with “high carbon intensity”, effectively ruling out any funding for coal power plants.

Friends of the Earth filed last December a legal complaint against Ex-Im at the Organisation for Economic Co-operation and Development (OECD) arguing that the agency is breaching a requirement to draw up emission reduction plans and avoid causing environmental damage.

Win for American fossil fuel firms

Ex-Im says its mission is to support American jobs. It does so by helping US companies secure lucrative foreign contracts with its backing.

Last year Jo-Lewis met government officials and corporate executives in Bahrain to “expand ExIm’s footprint in the region and facilitate new opportunities for U.S. exporters in Bahrain.”

The Bahrain project will see the involvement of SLB (formerly known as Schlumberger), the world’s largest oilfield services provider.

The Houston-based company specializes in finding oil and gas deposits, drilling wells, and managing reservoirs to boost production. SLB was involved in the discovery of the new oil and gas reserves in central Bahrain and in March 2021 it won a $225 million contract for their development.

Ex-Im has been approached for comment.

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Last month, recently elected president Daniel Noboa said in an interview to a local media outlet that he believed that a “moratorium [to the referendum result regarding oil exploitation in the Yasuní] is a viable path”. 

While Noboa supported keeping oil in the ground during the refendum, he now argues that Ecuador is at war and that “we are not in the same situation as two years ago”.

Activists and indigenous people told Climate Home they were concerned about the president’s remarks, adding that democracy is under threat and that their “hope is being taken away”. 

Back in August, 59% of Ecuadorians voted to stop oil drilling in block 43. Environmentalists around the world celebrated the victory as an example of how to use democratic processes to leave fossil fuels in the ground.

Since then though, the country has gone through a political and social crisis due to a rise in gang violence. The government declared a state of emergency earlier this year, following the escape of a powerful drug lord from a top security prison.

The new president Noboa suggested that the oil from the Yasuní could help fund the “war” against drug cartels. 

Taking away hope

Pedro Bermeo is a spokesperson for Yasunidos, a coalition of indigenous NGOs from the Amazon that led the call for the referendum. He said Noboa’s statement is “worrying, unwise, and undemocratic” as Noboa is saying he won’t abide by people’s votes. 

Belén Páez, president of climate and indigenous rights NGO Fundación Pachamama, said Noboa’s statement “is very dangerous in several ways because it attempts against the citizens’ decision and puts democracy at risk”. 

As someone who voted in favor to keep Yasuní’s oil underground, Bermeo said that people like him feel their “hope is being taken away”. 

Bermeo said that, when the refendum took place, Ecuador was already facing extreme violence and poverty. But nevertheless, people voted to keep the oil in the ground.

“There was a feeling of hope to protect life on the planet”, says the activist. So now Bermeo argues that voters feel defrauded and “have stopped believing in the State”. 

Belén Páez added “it makes us all feel bad and distrustful”. 

Páez, who has worked to protect indigenous rights in Ecuador, added that Noboa’s remarks could result in a set back of other environmental policies. 

Moi Guiquita of the indigenous Waorani people in the Ecuadorian Amazon pulls a boat over flooded jungle areas at the lagoon of the Yasuni National Park in the Bameno community, in the Pastaza province, in Ecuador, July 29, 2023. REUTERS/Karen Toro

Fighting back

On February 1, the indigenous Amazon Waorani Nationality declared themselves in a ‘territorial emergency’ and demanded that the government respects the referendum.

At a press conference, the indigenous group rejected Noboa’s proposal of a moratorium. They added that a moratorium would perpetuate the violation of indigenous peoples’ rights and territory, including those of the Tagaeri and Taromenane, the only two indigenous peoples in voluntary isolation in Ecuador. 

The Waorani Nationality announced that, if a moratorium is formally proposed, they will take legal action against the Ecuadorian State. Their decision to do so was supported by the Confederation of Indigenous Nationalities of the Ecuadorian Amazon.

“We are not going to allow our rights to continue being violated,” said Waoranai Nationality president Juan Bay, “it is time for us to have social and environmental justice”. 

Second referendum

Mauricio Alarcón is a rule of law and democracy campaigner at Fundación Ciudadanía y Desarrollo. He said this situation leaves voters with “an unpleasant feeling”.

Alarcón argues that Noboa’s statement is contradictory to his past stances, as he vowed to protect the Yasuní when he was a presidential candidate. 

He added that a moratorium on the referendum is technically possible, but it might not be as easy as the government is making it seem.

The results of a referendum can only be reversed through another referendum, he said, which would force the government to propose a new vote on whether to put in place a moratorium..

If what the government intends is a total reversal of what has been decided regarding the Yasuní, a referendum is also the way to go, “and it will be the citizens the ones to have the last word”, states Alarcón. 

Since his remarks in January, president Daniel Noboa hasn’t referred to the moratorium again. But government insiders say that it is still a possibility. 

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Last month, Shell used rice farming carbon credits to offset a chunk of its annual emissions, claiming to reduce the “carbon intensity” of its fossil fuel products.

But experts have long argued that the sellers of these offsets are over-counting their emissions reductions and using accounting tricks to evade checks, as a Climate Home investigation showed last year.

These accusations led leading carbon standard Verra to suspend the projects early last year and launch an investigation. Shell took them off its website as a result.

But, although Verra’s review continues, on January 9 Shell quietly retired over a million credits produced by the suspended projects, meaning it counts the claimed emissions reductions towards its climate targets.

Rachel Rose Jackson, director of climate policy at Corporate Accountability, said Shell’s actions were “shameful, dubious and reckless against the backdrop of a deadly climate emergency”.

“To retire over one million offsets from projects actively under investigation reeks of bad faith and malintent”, she added.

Carbon Market Watch’s Jonathan Crook said Shell should have at least waited until Verra’s review had ended to see if there were problems with the offsets.

If the offsets do have problems then, he added, they “have no value from a climate perspective and using them towards net carbon intensity targets is totally inappropriate”.

Shell did not reply to detailed questions on these particular offsets. But a spokesperson said that the credits the company buys are “certified in accordance with independent standards and further screened through our due diligence process”.

Claiming to lower rice emissions

The idea behind the projects is that emitters like Shell pay for Chinese rice farmers to take measures to reduce their emissions that they wouldn’t otherwise be able to afford.

Rice is traditionally grown in flooded fields known as paddies. These have more bacteria than dry fields and the bacteria breaks down decaying plants, turning them into a potent greenhouse gas called methane.

To reduce the damage to the climate and save water, the project developers claimed they would pay farmers to periodically drain their fields. With less standing water, there are fewer bacteria and less methane.

A rice field irrigated with alternate wetting and drying methods

But opinions from experts and scientific literature suggest that lots of farmers already employ this technique across China, encouraged by the central government. So they do not need incentives from carbon credit to do so.

Carbon credit rating agency BeZero Carbon has given a Chinese rice cultivation project similar to Shell’s its lowest possible score. 

Its assessment says there is a “significant risk” that the emissions reduction measures are not additional to what would happen without the carbon credit money “due to the high level of government support for the project activities”.

A Climate Home investigation last year found that the project developers artificially divided up fields across several projects to pass them off as small-scale and avoid stricter checks.

Quality issues

These activities were initially given the green light by leading carbon standard Verra. But early last year, in response to concerns, it identified “quality issues”, launched a review and stopped the projects from producing any more credits.

But the suspension did not prevent offsets already in circulation from being sold or used to offset emissions.

When Climate Home approached Shell last year, the company said it was aware of Verra’s review and “would look carefully at the results when they are published”. 

The company took the offsets off a webpage dedicated to its portfolio of carbon credits offered to external clients, with a spokesperson saying this was “pending Verra’s review”.

Rich nations miss loss and damage fund deadline

Nearly a year later, the results of the review have still not been published and the projects remain on hold. But Shell retired 1.23 million carbon credits issued by those projects, offsetting emissions equivalent to three gas-fired power plants running for a year.

A Shell spokesperson said the company had “recently retired a number of carbon credits as part of our net carbon intensity target”.

Finding a way out

Shell’s involvement in these projects is not just as a buyer. The schemes were originally set up by a Chinese firm but four years later Shell signed a series of agreements to become its exclusive agent.

The role granted Shell the right to either claim the credits against its emissions or sell them to other companies, potentially profiting from their sale.

Italy launches ‘ambiguous’ Africa plan fuelling fears over fossil fuels role

Before Verra suspended the projects, only a quarter of the credits issued by the projects had been used, primarily by Chinese state-owned oil company PetroChina. 

Shell retired the vast majority of the remaining credits on January 9. Carbon Market Watch’s Crook says it would appear Shell “had sunk money into the projects and had these credits sitting on their books”.

“Perhaps they have not been able to find any buyers since the projects were put on hold”, he added. “Or perhaps they are doubting that the review will be positive and it will be difficult to sell or trade any of these credits in the future. So they went ahead and used them themselves”.

Shell involved in rule-making

While Verra probes the credits, it has taken the rare step of banning any further use of the rice farming methodology under which the projects were developed.

The register is now working on a new rulebook for future rice farming offsets. It says it will allow project developers “to credibly achieve emission reductions and generate high-quality credits”.

To advise them on this, Verra has appointed an Indian company which is part of Shell, raising concerns about conflict of interests.

Crook described this as a “recurring issue” in the carbon credit world. He said: “You have actors who wear all these different hats. They can sometimes develop methodologies, transact carbon credits and/or use them towards their own targets, potentially based on rules they helped develop. It raises real questions around conflicts of interest and integrity.”

A Shell petrol station. Photo credit: Tomcat MTL/Flickr

A Verra spokesperson told Climate Home it “takes potential and actual conflicts of interest very seriously” and that methodologies “undergo an extensive review process before they are finalised” and at each stage “all stakeholders, including the public, have an opportunity to evaluate and comment”. 

They said: “This process is designed to promptly identify any issues with the methodology, including the opportunity to identify any perceived conflicts of interest”.

Investigation ongoing

The spokesperson said Verra does not comment on specific projects under review to avoid influencing the outcome of the investigation.

“The steps in a review, as well as the timeline for completing the review, depend on the underlying facts and circumstances, the complexity of the issues, the cooperation of third parties and other factors”, they said.

“A review may take several weeks or months to complete,” they added, “while every review is different, Verra aims to conduct an appropriately scoped review as expeditiously as possible.”

A spokesperson for Shell said: “We retire credits to compensate emissions, including those associated with the energy our customers use in transport, homes, producing goods and providing services. This approach complements our activities to avoid and reduce emissions from our own operations”.

The post “Shameful”: Shell uses carbon credits under investigation to meet climate targets appeared first on Climate Home News.

Announcing the move on Friday morning, President Joe Biden said the pause on all pending export permits for liquified natural gas (LNG) “sees the climate crisis for what it is: the existential threat of our time”.

The decision comes after Biden faced mounting pressure from environmentalists and climate activists to apply the brakes on the US build-up of fossil fuel capacity. The groups represent an important voter base for Biden as he seeks reelection in November.

The US is the world’s largest exporter of LNG and shipments are expected to keep soaring as a result of projects already approved and under construction.

But the review will put on hold the planned development of at least four more gas export terminals on the coast of the Gulf of Mexico.

That includes the Calcasieu Pass 2 (or CP2), a facility in Louisiana described by campaigners as a “carbon bomb”. If built, it could ship up to 24 million tonnes of gas every year.

New climate tests

Biden said his administration “will take a hard look at the impacts of LNG exports on energy costs, America’s energy security and our environment”.

A White House statement said the pause would allow the White House to integrate “critical considerations” that have emerged since the last analysis of gas export approvals was carried out five years ago.

That includes the impact of greenhouse gas emissions. Gas supporters have historically promoted it as a “cleaner” fossil fuel because of its reduced carbon dioxide emissions compared to coal.

But LNG is primarily made of methane, a much more potent earth-warming gas. While burning it turns it into carbon dioxide, methane leaks during transport can push its lifetime emissions higher than those of coal, according to a new study by methane expert Robert Howarth currently undergoing peer review.

Liquified natural gas (LNG) facilities in Texas. Photo: Tim Aubry / Greenpeace

Max Gruenig, senior policy advisor at E3G, said Biden’s decision is a “significant shift” because the Department of Energy, which is responsible for assessing the projects, has historically only taken economic benefits into account.

“They will have to come up with a new methodology to assess what is beneficial to the public that includes externalities like climate change”, he added. “But the problem is, of course, as soon as you publish the details of the methodology, you risk being litigated against and attacked in court. The pause allows the Biden administration to avoid this and buy itself more time until the election”.

Elections in sight

Campaigners hailed the White House announcement as a “bold step” and “a historic win”. Ben Jealous, executive director of the Sierra Club, said the decisions “makes it clear that the Biden administration is listening to the calls to break America’s reliance on dirty fossil fuels and secure a livable future for us all”.

Sixty percent of US voters surveyed in a poll by Data for Progress, a progressive think tank last November supported limiting gas exports.

Gruenig said that the Biden administration had been “growing more careful” about climate considerations in energy infrastructure after approving the Willow oil project in Alaska. “I don’t think the White House expected that would cause such a massive backlash from the climate community”, he added.

Zimbabwe looks to China to secure a place in the EV battery supply chain

Biden’s statement attempts to draw a dividing line with his likely opponent Donald Trump. He criticised “MAGA [Make America Great Again] Republicans” who “willfully deny the urgency of the climate crisis, condemning the American people to a dangerous future”.

Gruenig believes the LNG expansion freeze will bolster US credibility on the international climate stage, where many developing countries and campaigners regularly point fingers at American hypocrisy over fossil fuel investments.

Lobbyists fan energy security fears

Industry groups have condemned the pause as a “win for Russia” and “a loss for American allies”. As rumors of Biden’s plans swirled around in previous days, the prevailing narrative from pro-gas lobbyists has been that the approvals freeze would put Europe’s future energy security at risk.

Since Russia’s invasion of Ukraine forced the bloc to look for alternative gas sources, US LNG exports to Europe have increased rapidly.

But analysts believe this is going to change soon as a result of rapid renewables rollout and better energy efficiency. By 2026, the International Energy Agency (IEA) predicts European gas demand will be one-fifth below the pre-war level of 2021.

Cop29 host Azerbaijan launches green energy unit to sceptical response

Existing LNG installations should be able to satisfy that demand without any further expansion, according to IEEFA. Their analyst say that, just taking into account terminals already being built, US export capacity by the end of this decade will be three-quarters higher than European demand.

A group of 60 European lawmakers largely from Green parties made that point in a letter to the White House on Thursday, arguing that the fossil fuel industry is using Europe as “an excuse” to expand gas exports. “The demand for new gas from industry voices in Europe is a false one”, they said. 

While using pro-Europe rhetoric, gas producers could actually be looking to sell their products in other, more promising markets. Venture Global, the owner of the CP2 terminal in Lousiana, has signed purchase agreements with Japan and China, for example.

The post US government pauses new gas export terminals in ‘historic win’ for climate appeared first on Climate Home News.

The birthplace of crude refining, Azerbaijan has embedded fossil fuels in the fabric of its society for centuries. Oil, and more recently, gas have never stopped flowing from the vast reservoirs dotted around the Caspian basin.

Feeding energy-hungry consumers across Europe continues to bring immense wealth to the country and particularly its ruling elite. Fossil fuels make up over 90% of all exports and are by far the largest source of government revenue.

But as it gears up to host the Cop29 UN climate summit in November, Azerbaijan wants to show the world a different image. Burnishing its clean energy credentials through its state-owned oil and gas company, Socar, is part of the plan.

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At a board meeting at the end of December, just a few weeks after the country was appointed as Cop host, Socar announced the creation of a green energy division called Socar Green. It is promising investments in solar and wind projects, green hydrogen production, and carbon capture and storage (CCS).

It was a largely unexpected move for a company planning to expand its gas output and recently criticised for lacking any energy transition strategy. The timing sparked suspicions among international observers: are they serious about it or is this just greenwashing?

“A green division is meaningless for the climate without an accompanying plan to phase out oil and gas”, Myriam Douo, a senior campaigner with Oil Change International, told Climate Home. “The reality is that to avoid catastrophic climate breakdown more than half of fossil fuels in existing fields must stay in the ground”.

Oil and gas keep flowing

Despite being heavily reliant on oil and gas, in global terms Azerbaijan is not a major producer. It pumps less than 1% of the world’s oil and gas output.

Its oil is expected to run out in about 25 years and production is already going down slightly as reserves are depleted. But it has enough gas for nearly 100 years and is exploiting more and more of it each year. Industry analysts Rystad expect its gas production to rise by a third in the next ten years.

“The country will not be producing oil and gas forever”, said Gulmira Rzayeva, an Azerbaijani senior research fellow at the Oxford Institute for Energy Studies. “But consumers in Europe, Turkey, Georgia need these hydrocarbons now and, if Azerbaijan alone stops extracting oil and gas, it will absolutely not change anything for the energy transition of the world. If there are such plans, they need to involve all producers”.

Harjeet Singh, a campaigner at the Fossil Fuel Non-Proliferation Treaty Initiative, agreed that to move away from fossil fuels all nations need to “act in concert, each according to their fair share and historical responsibility”. But he added that”every fossil fuel producer, including Azerbaijan, must have a clear transition plan to phase out fossil fuels”.

No transition plans

Government-controlled Socar is at the heart of Azerbaijan’s money-spinning machine. It extracts, transports and refines fossil fuels, usually in partnership with private European companies like BP and Total or other state-run firms like UAE-based Adnoc.

It is also one of the most worst oil and gas companies in the world in terms of its climate credentials, according to the Oil and Gas Benchmark. Out of 99 firms, its researchers ranked Socar 91st.

Amir Sokolowski is global director of climate at CDP, the non-profit behind the benchmark. He says that, at the time of their analysis late last year, “there were no transition plans to speak of and these take a very, very long time to develop”.

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The firm has no emission reduction targets, no commitment to supporting human rights and no long-term transition plan although it does have a “low-carbon development strategy”.

Socar’s latest accounts dedicate pages and pages to oil and gas operations but only a very small paragraph to any form of green energy activities. Their use of wind and solar energy, the report indicated, was limited to powering measuring devices installed on oil and gas pipelines and to illuminating some office buildings.

“This would not seem to be a high priority on their agenda, but we can hope that with the spotlight of hosting Cop29 things may start to change”, Sokolowski added.

Renewables potential

Azerbaijan’s history with renewable energy is largely one of untapped potential and unmet expectations.

In 2020 Azerbaijan set a target of increasing the share of renewables in its electricity mix to 30% by 2030.

Since then, its barely changed, still standing at 6%, which is almost entirely hydropower rather than wind or solar.

The country has “abundant” wind and solar resources, according to a recent World Bank report, but while investment projects have been announced, “little progress” has been made on the ground.

The dominance of state-owned enterprises, like Socar, was cited by the World Bank as one of the biggest challenges to the energy transition.

The development of the only three major renewable projects (one wind and two solar) have so far rested in the hands of foreign companies.

At the end of last year, president Ilham Aliyev inaugurated the country’s first major solar power plant, which could supply up to 110,000 homes with clean energy. Its owner is the Emirati company Masdar, headed by Cop28 president Sultan Al-Jaber.

Now Socar wants its slice of the cake. It said in its initial phase the new green energy division will collaborate on these projects with a view to “expand partnership opportunities” and “incorporate international best practices”.

Plans split opinions

Gulmira Rzayeva thinks it is a strategic decision to make Socar’s green push coincide with the country’s Cop hosting. “Socar can play a decisive role”, she said. “It wants to invest in clean energy and it’s targeting production of green hydrogen not only for domestic use but for export.”

Azerbaijan, Georgia, Romania and Hungary announced last year they would set up a joint venture to lay an electricity cable under the Black Sea, bringing green electricity from Azerbaijan to Europe.

Sokolowski says it is hard to predict what Socar’s green proclamations will amount to.

“Will they be leaders on that front? I find it hard to believe”, he added. But “when it comes to renewable energy, having even just a small unit, something that would be considered greenwashing, actually has an impact. It is the beginning of every change”.

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The “UAE consensus” did not go so far as to call for a “phase-out” as more than a hundred countries wanted. It settled on “transitioning away from fossil fuels in energy systems”.

Still, after coal was targeted for a “phase-down” two years ago in Glasgow, it extended that scrutiny to the oil and gas sector.

Cop28 president Sultan Al Jaber brought down the gavel on a deal late Wednesday morning, one day into overtime. “We have language on fossil fuel for the first time ever,” he said, to applause.

One delegation not joining in the ovation was Saudi Arabia. Oil-exporting states fought hard against the phase-out language that appeared in earlier drafts.

Many emerging economies were also wary of signing up to quit fossil fuels, given limited finance on the table to support cleaner development paths.

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Samoa complained they were not yet in the room when the deal was adopted. Small island states had pleaded for a rapid fossil fuel phase-out to hold global warming to 1.5C, seen as critical for their survival.

Excerpt from the global stocktake text agreed at Cop28 addressing fossil fuels

The energy package included a push to triple renewable capacity and double the rate of energy efficiency improvements by 2030. It called for accelerating the implementation of technologies like carbon capture, utilization and storage, “particularly in hard-to-abate sectors”.

Controversially, it cited a role for “transitional fuels”, which can be taken to mean fossil gas.

Attention now turns to the next round of national climate plans which, the deal says, should align with limiting global warming to 1.5C. But the pathway to do so is vanishingly small.

The post No ‘phase-out’, but Dubai deal puts oil and gas sector on notice appeared first on Climate Home News.

While it can be helpful at the margins, CCS cannot possibly deliver reductions in greenhouse gas emissions on the scale needed to avert climate disaster. This can only happen if the main sources of emissions – fossil fuels – are phased out.

CCS is expected to deliver less than a tenth of the cumulative carbon dioxide emission reductions, over the 2023-2050 period, needed to hold global warming to 1.5C.

In the International Energy Agency net zero emission (NZE) scenario, CCS captures approximately 1.5 billion tons (GT) of CO2 in 2030, and 6 GT by 2050. But very little of that is applied to emissions from fossil fuel production and combustion. It is primarily used to capture CO2 from sectors where emissions are harder and more expensive to reduce, such as cement production or chemicals.

Is the IEA NZE scenario the only way to achieve net-zero emission and limit the temperature increase to 1.5C? Certainly not. There are different scenarios out there, including those of the Energy Transition Commission and McKinsey. And scenarios coming out of models are not to be confused with reality. The fossil fuel industry claims it can achieve the same objectives as in the IEA NZE scenario, while producing more oil and gas, by relying more heavily on CCS. Is this true?

50% more expensive

Another IEA scenario, the stated policies scenario, gives the answer. Reaching net-zero carbon emissions in this way would require the capture of 32 GT of CO2 emissions by 2050, including 23 GT through direct air capture (DAC).

At this scale, DAC alone would require 26,000 TWh of electricity to operate, which is more than the total global electricity demand today. Reaching net-zero emissions in this way would be 50% more expensive (for an annual investment cost of $6.9 trillions) than in the IEA NZE scenario.

People in the oil and gas industry know there is zero probability of this high-CCS scenario coming true. They are not even seriously investing in it, but waiting for governments, through taxpayers, to pick up the bill. The reality is they are just fooling us one more time, to buy time we can’t afford to waste in dealing with the climate crisis.

For all these reasons, framing the objective of the energy and climate transitions in the Cop28 decision text as “phasing out unabated [i.e. without CCS] fossil fuel emissions”, without specifying the order of magnitude of CCS in the overall portfolio of zero-carbon energy solutions (approximately 10%), and its primary use (hard-to-abate sectors, outside the oil and gas industry), would be profoundly misleading.

Focus on real solutions

It would also be a missed opportunity for Cop28 to send a clear signal of where investments should be going in the energy sector, to ensure climate safety as much as energy security and future profits of energy companies: energy efficiency and savings; the deployment of renewable energies and other zero-carbon energy solutions (green hydrogen, sustainable biofuels, synthetic fuels, etc.); the complete decarbonization of the power sector (electricity generation); and the electrification of energy demand.

Today, the oil and gas industry is not part of the energy transition: it represent only 1% of the total investment ($1.8 trillion in 2022) in clean energy solutions, globally. And it invests only about 2.5% of its own record-high profits into clean energy, as opposed to the further expansion of oil and gas.

What should be the ratio of investments between zero-carbon energy solutions and the maintenance of existing oil and gas facilities, to limit the temperature increase to 1.5C? 50/50 by 2030, says the IEA in its fossil fuels special report, before it shifts further in the direction of a complete phase out from fossil fuels.

These should be the real objectives of Cop28, in relation to the energy transition. Otherwise, we are just mixing up the signal and the noise, confusing what should be the priority (phasing-out fossil fuels, phasing-in zero-carbon energy solutions) and what is a small part of the strategy (CCS) for a successful energy transition.

Laurence Tubiana is the CEO and Emmanuel Guérin is a fellow at the European Climate Foundation.

The post Don’t be fooled: CCS is no solution to oil and gas emissions appeared first on Climate Home News.

Winds of almost 200 mph tore through communities claiming more than 6,000 innocent lives. My family’s hometown of Tacloban – only five metres above sea level – faced a wall of seawater over seven metres tall.

As the storm left a massive trail of devastation, I was delivering a speech at the Cop19 UN climate talks in Poland.

I could not reach my brother and it was another three days before I found out he was alive. But he personally carried 78 people to mass graves. To this day, many of the headstones in the local cemetery bear the names of ten people or more, with one date of demise.

Over the last few weeks, I have joined a band of climate and human rights activists on a 1,000km walk across the Phillipines to commemorate this catastrophe and demand climate justice.

Along the way I heard countless stories of loss from people who believe that Haiyan should have been a wake-up call for the world about the dangers of climate change.

Damaged areas along the coast in Tacloban City after Typhoon Haiyan hit the area. (Photo credit: Matimtiman//Greenpeace)

I continue my journey by ship. The campaigners, researchers, journalists and photographers on board the Rainbow Warrior have met residents of Bohol province’s ‘sinking islands’. Beautiful places that are slowly but surely losing ground to the waves as sea levels rise and typhoons are super-charged by a heating climate.

Yet even while I bear witness to their stories, there are some who want to silence me.

Shell lawsuit

Earlier this month we learned that Shell is suing Greenpeace UK and Greenpeace International, threatening a damages claim for millions of dollars for protesting against its continued exploration and production of planet-heating fossil fuels.

As executive director of Greenpeace Southeast Asia and as one of the activists who tried to board a drilling platform Shell was moving to the North Sea earlier this year, I am named in the court documents.

The company is not only financially attacking Greenpeace, but is seeking an injunction to prevent Greenpeace protesting on its infrastructure at sea or in port anywhere in the world forever.

Far from heeding the wake-up call, or even hitting the snooze button, they are trying to smash the alarm clock.

That is why I will be joining Greenpeace activists today in sending a clear message to the fossil fuel industry that its intimidation tactics will not silence us.

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Using kayaks and small boats, we will try to block an oil tanker from docking at a major Shell refinery near Batangas, a city on the edge of the Verde Island Passage.

This idyllic 10-mile wide channel separating the islands of Luzon and Mindoro is one of the most biodiverse marine habitats on Earth, home to countless rare and wonderful species.

But it now faces an existential threat. It has become the epicentre of my country’s expanding liquefied natural gas industry, with multinational giants pouring millions into constructing new power plants and LNG terminals.

Not only does this endanger marine life – an oil tanker spilled 800,000 litres of oil into the channel earlier this year – it will greatly increase my country’s fossil fuel dependence.

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Our kayaks and banners are clearly no match for a multinational oil and gas corporation.

Record profits

But as world leaders gather in Dubai for the Cop28 climate talks, we want to remind the world about the damage that Shell and the rest of the fossil fuel industry are causing to the planet and those who live on it.

All eyes at Cop28 will be on whether governments can agree how to set up a fund for loss and damage to help the most vulnerable communities recover from climate disasters. But what about the companies who have made record profits and are continuing to pump the oil and gas that is roasting our planet?

Shell recently announced third quarter profits of $6.2 billion, and further share buybacks on top of the $23 billion it has returned to shareholders so far this year.

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Why should the Philippines be left with a $12 billion bill for Typhoon Haiyan, not to mention other fierce typhoons that came after and future more powerful storms that scientists predict, while oil companies pile up obscene profits?

So as I reflect on the countless tales of loss I have heard, I remain focused on the road ahead.

I will cling to my banner and paddle, and if necessary face Shell in court, and together we will show oil companies that the era of fossil fuels must end and that they must pay up for the climate vandalism they continue to perpetrate. The journey ahead may be long, but we’re not stopping here.

Yeb Sano is the executive director at Greenpeace Southeast Asia 

Shell response

A Shell spokesperson said: “The right to protest is fundamental and we respect it absolutely. But it must be done safely and lawfully.”

“Boarding a 72,000 metric ton moving vessel at sea was unlawful and extremely dangerous. A judge said Greenpeace protestors were ‘putting their lives and, indirectly, the lives of the crew at risk’. The legal costs to secure two court injunctions to prevent further boarding were significant. So were the costs for the companies who had to deal with the action at sea, for example by mobilising an extra safety vessel and increasing security at the port.

“The safety of the protestors – as well as the crew – was paramount. Rightly, we did not hesitate to put in place measures to protect all people involved. Shell and its contractors are entitled to recover the significant costs of responding to Greenpeace’s dangerous actions.

“Our intent has been misrepresented. This is simply about preventing activities at sea which could endanger peoples’ lives — as happened earlier this year — nothing more.”

The post Ten years on from Haiyan, Shell’s intimidation won’t silence me appeared first on Climate Home News.

The UAE talks cap a year that saw the world’s climate scientists lay out the unequivocal need for steep and immediate emissions cuts to limit warming to 1.5ºC and ways to get there.

A year in which the International Energy Agency set out a narrow but feasible 1.5ºC aligned pathway for the decline of fossil fuels and acceleration of renewables.

Fossil fuels are relentlessly and undeniably killing us, but renewable energy promises a better future, where no one is left behind.

Primer: The ‘inevitable’ fossil fuel fight set to dominate Cop28

Take my homeland of Denmark as an example. For more than 80 years Denmark has allowed exploration for hydrocarbons and since 1972, oil – and later gas – has been produced in the Danish offshore waters of the North Sea.

In 2019 alone, Denmark produced a total of 3.2 billion cubic meters of fossil gas. So we’ve certainly done our part in causing this crisis.

Wind is winning

Yet, now we’re proving the impossible possible. Wind energy, which was long seen as a nice-to-have but not good for energy security, is already delivering over half of all Denmark’s power needs, largely thanks to community commitment and political ambition.

Furthermore, the Danish Parliament announced in 2020 that it would cancel all future licensing rounds for new oil and gas exploration and production permits in the Danish part of the North Sea and end existing production by 2050.

In numbers: The state of the climate ahead of Cop28

The Nordic nation hasn’t stopped there as it initiated the Beyond Oil and Gas Alliance, an international alliance of governments and stakeholders working together to facilitate the managed phase-out of oil and gas production.

Launched at Cop26 and led by the governments of Denmark and Costa Rica, the alliance aims to elevate the issue of oil and gas production phase-out in international climate dialogues, such as those we will shortly see in Dubai.

Denmark doesn’t have it all sorted out though as oil and gas production is projected to increase over the coming years before peaking in 2028 and 2026 respectively and will start declining hereafter.

Make polluters pay

Rising emissions and planned expansion of fossil fuel production, wherever in the world, are wildly out of sync with the direction of progress needed on the international stage, while financial support to reduce emissions in poorer countries, along with finance to address escalating climate impacts, remains completely inadequate.

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The last thing the world needs is new fossil fuel developments. At Cop28, governments must do their utmost to agree to end expansion and instead rapidly phase out coal, oil and gas, and accelerate the renewable energy transition.

It doesn’t end there. Citizens, like me, of wealthy countries, like Denmark, with historical responsibility for the climate crisis, need to make sure our governments take accountability for finding and channeling money from where it sits to where it’s needed – from polluters to those least responsible and most in need as they transition to renewable energy and build climate resilience.

We need a credible finance package that includes the launch of a new Loss and Damage Fund, and steps to start making polluters pay for the destruction and harm they have caused.

The climate crisis is not in some far-off future. It is here right now and the planet is not coping despite the credible solutions on offer.

A world free of fossil fuels is possible as much as climate resilient frontline communities, but it won’t feel that way until it is done. It’s time for governments to get it done and stop the climate emergency. Dubai awaits.

Mads Flarup Christensen is the executive director of Greenpeace International

The post The Cop28 climate summit must set us free from fossil fuels appeared first on Climate Home News.

It’s a measure of how far the discourse has moved since the Paris Agreement that Sultan Al Jaber has taken that line in the run-up to Cop28.

As president of the UN climate summit starting in Dubai on 30 November, Al Jaber could not ignore mounting calls to quit coal, oil and gas.

“We cannot address climate catastrophe without addressing its root cause: fossil fuel dependence,” said UN chief Antonio Guterres last week. “Cop28 must send a clear signal that the fossil fuel age is out of gas – that its end is inevitable.”

But Al Jaber has not quit the day job as chief of Emirati state-owned oil company Adnoc, which is increasing production. The conflict of interest is writ large.

And despite the longstanding scientific consensus that burning fossil fuels is the main driver of the climate crisis, there was no political consensus to name them in UN climate decisions until very recently.

At the 2021 climate summit in Glasgow, UK, countries made a breakthrough agreement to phase down coal power generation. A group of around 80 countries pushed to extend that to oil and gas in Sharm-el-Sheik last year, but were stonewalled. Will Al Jaber’s rhetoric translate into an international agreement?

Phasing down or cashing in?

The science is clear: we need to substantially reduce the use of fossil fuels to stand a realistic chance of limiting global warming to 1.5C, the Intergovernmental Panel on Climate Change said. There is no room for new oil and gas fields, the International Energy Agency agreed.

While there is money to be made, though, mining and drilling continue. Buoyant oil prices since Russia invaded Ukraine last year have spurred development.

The top 20 fossil fuel-producing nations plan to extract twice as much by 2030 as the level consistent with meeting the Paris Agreement goals, according to the UN’s 2023 Production Gap report.

The difference between governments’ fossil fuel plans and projections and levels consistent with limiting warming to 1.5°C and 2°C remains wide. Credit: UN Production Gap Report

The first global stocktake of the Paris Agreement is due to conclude at Cop28 – a prime opportunity for a course correction. Two elements of the energy package under negotiation have broad support: a tripling of renewable energy capacity and a doubling of energy efficiency by 2030. But on a third plank – the fossil fuel phase-out – divisions remain stark.

“We are not going to solve the problem by scaling up renewables alone,” says Ploy Achakulwisut, a research fellow at SEI and one of the UN report’s authors. “Governments need to step up and commit to stronger language on fossil fuels now. Accepting a phase-out is the first step towards coordinating and implementing a well-managed and equitable transition.”

A fractured field

On one end of the spectrum, fifteen countries under the banner “high ambition coalition” are calling for a phase-out of fossil fuels production and use: no ifs, no buts. The group includes rich Western countries like France and Spain, African states, including Kenya and Ethiopia, and Pacific island nations.

Oil, carbon and loss: navigating Cop28 with Climate Home News

On the opposite end, Russia says nyet to any proposal of cutting the oil and gas production that makes up most of its revenues. “We oppose any provisions or outcomes that somehow discriminate or call for phase-out of any specific energy source or fossil fuel type,” the country’s recent submission to the UNFCCC said.

In between are developed countries justifying continued oil and gas development on energy security grounds and emerging economies resistant to any check on their growth.

One word is likely to dominate discussions: unabated.

Abatement fight

A universally-recognised definition of “unabated” does not exist – and that is a big part of the problem. Fossil fuel abatement generally refers to efforts to reduce the amount of greenhouse gas emitted throughout their life cycle, chiefly by using carbon capture and storage (CCS) technologies.

But what percentage of emissions needs to be captured and how countries ensure this is not a delaying tactic are open questions.

“Differing views on abatement are causing hostages to fortune and allowing fractures to appear that are not helpful in terms of actually achieving fossil fuel phaseout,” Camilla Fenning, a fossil fuel transition expert at E3G, told Climate Home. “A clear definition is something that would be very useful.”

Chevron’s Gorgon gas project in Australia has one of the largest carbon capture and storage plants in the world. Photo: Chevron Australia

Rich countries all call for some form of phase-out of unabated fossil fuels, in line with what was agreed at a G7 meeting in Hiroshima last May.

Their interpretation is not univocal, however.

The EU wants to designate some clear boundaries around the use of technofixes. “Exaggerated expectations from CCS should not be a pretext to delay climate action now,” an EU negotiator told Climate Home. “It will not deliver what we need before 2030. In the longer term, we will need it in hard-to-abate sectors, but we need to see what is possible.”

Meanwhile, the US is betting big on CCS and curbs on methane leakage to limit the climate damage of oil and gas operations. It is a position that brings it closer to petrostates like Saudi Arabia and Cop28 hosts UAE.

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China’s climate envoy Xie Zhenhua has also come out in favour of CCS while calling a global fossil fuel phase-out “unrealistic”.

The country, which is expanding both coal power capacity and renewables, risks being a major blocker to an agreement. Highlighting “the significant role of fossil fuels in ensuring energy supply security”, its latest submission said the transition needs to be achieved by “establishing the new before abolishing the old”.

For Cuban Ambassador Pedro Luis Pedroso Cuesta, chair of the G77 group of developing countries, development needs take priority over a fossil fuel phase-out. “The most important thing for developing countries is eradicating poverty and guaranteeing a right to development within a sustainability framework,” he told Climate Home.

Equity and money questions

For many developing countries, equity concerns will need to be addressed before signing on to any deal.

Negotiators from Africa and India are planning to push rich nations to commit to phasing out fossil fuels faster than the rest of the world. Their position is based on the “common but differentiated responsibilities” principle, where the wealthy countries who are most responsible for causing climate change take the lead in tackling it.

They will highlight the contradictions between what some developed countries advocate for in climate talks and what they do at home. For example, the US is responsible for more than one-third of the expansion of global oil and gas production planned by mid-century, followed by Canada and Russia, according to Oil Change International.

Cuba’s Pedroso Cuesta called this a “severe contradiction”. “Those who are proposing these initiatives [fossil fuel phase out] should lead by example. I don’t think they are currently,” he added.

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Another sticking point is money. A huge amount of it will be required for developing countries to wean themselves off fossil fuels while investing heavily in renewables and energy efficiency, the other elements of the COP28 energy package. “Developing countries need to be given assurances about more financial support to encourage confidence in signing up for those commitments”, says E3G’s Fenning

It is not yet clear who is going to provide finance and on what terms. Energy transition partnerships between rich countries and South Africa, Indonesia and Vietnam have stuttered over the last year. Promises of significantly higher levels of support from development banks and the private sector still need to materialize.

Activists gearing up

While country delegates refine their rhetoric, activists are also gearing up their campaigning firepower to make sure a fossil fuel phase-out remains top of the agenda in Dubai.

Demonstrations and protests are expected to be limited to the UN-designated zones, given the harsh rules clamping down on dissent in the UAE, campaigners told Climate Home. But more creativity and better coordination will ensure impact, they promise.

Campaigners are planning to target anyone blocking a deal on fossil fuels. Not only governments but also industry lobbyists expected to descend onto the petrostate in vast numbers.

“The fact that we’re closer than ever to a decision on fossil fuel phase-out in a UN space means that the industry is mobilising more strongly to oppose this,” says Collin Rees, an activist at Oil Change International. “The industry has been forced to come out and show its face. Having that fight in full public view will be very important”.

The post The ‘inevitable’ fossil fuel fight set to dominate Cop28 appeared first on Climate Home News.

The plan was announced ahead of a US-China climate summit and outlines measures that will be taken to cut emissions from coal mines, rice paddies, landfills and other methane sources.

But it did not include any targets for emissions reductions. This stands in contrast to the over 150 nations who have promised to collectively reduce emissions by 30% between 2020 and 2030.

Experts told Climate Home that China’s baseline estimate of methane emissions was unreliable and a target could invite unwelcome pressure to shut down its coal mines.

Coal’s other problem

Just under half of China’s methane is from its coal mines, as methane gas leaks out of the seams of black rock.

This gas is explosive and dangerous so mine operators suck it from underground mines up to the surface where it damages the earth’s atmosphere, causing climate change.

China’s methane plan says it will “encourage and guide” coal firms to capture more of this gas. It can then be burned to produce electricity, heat the mines or dry coal.

Colombia’s big green plans run into headwinds

But, coal mine methane analyst Anatoli Smirnov told Climate Home, the “only real solution to reduce methane emissions is to close coal mines”.

They then must be flooded or sealed, with a pump installed to capture the gas that still leaks and use it for something productive.

Lauri Myllyvirta is the co-founder of the Centre for Research on Energy and Clean Air. He told Climate Home that the Chinese government lacks the “political will and buy-in” to start controlling methane.

Since late 2021, he said, China’s priority has been to increase the amount of coal China produces to get the coal price down.

“So any obligations that would cover a significant part of coal mines don’t really fit into that paradigm,” he said, adding “the same goes for oil and gas”.

Bad measurements

About a year ago, China’s climate envoy Xie Zhenhua said that China has “a little bit of a way to go so we can do surveillance and collect statistics as well as verification of our baseline”.

Li Shuo, an analyst at the Asia Society, told Climate Home that “in many of our emitting sectors, we simply don’t know how much methane emissions are there, and that makes setting reduction targets hard”.

But some analysts have accused China of under-counting its  coal mine methane emissions even though they have the ability to report more accurately.

Sabina Assan, an analyst at Ember said that, like many countries particularly in the developing world, China works out its coal mine methane emissions with a formula.

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It guesses how much methane leaks per ton of coal and multiplies that by how many tons of coal it produces.

Assan said China actually does measure the methane released from its underground mines, so it could improve reporting to the UN but hasn’t.

On top of this, China hasn’t reported its methane emissions since 2014 so its figures are out of date.

Myllyvirta said this hasn’t been reported since because China doesn’t want to “own up to the huge increase in emissions since 2014 and the Paris Agreement”.

The International Energy Agency and several other scientific studies come up with similar estimates to the Chinese government’s.

But Global Energy Monitor has done analysis based on the number and size of coal mines, how deep they are and what type of coal they have.

Using these variables, it estimates that the real figure for coal mine methane is almost double what the government claims.

The Chinese province of Shanxi alone, it estimates, emits about the same coal mine methane as the rest of the world.

The post China sets out methane plan, but no reduction target appeared first on Climate Home News.

The OECD is made up of a group of primarily wealthy countries, who collectively set their own standards around big global issues like tax, trade and the environment.

Despite being one of the world’s most influential trade bodies, decisions at the OECD often happen behind closed doors.

Members say that this allows them to get on with “building better policies for better lives” without distraction.

The problem is that channelling billions of dollars of public money into fossil fuels each year doesn’t square with that aim. 

Forests, methane, finance: Where are the Cop26 pledges now? 

The OECD regulates its members’ “export credit agencies”. These are government-owned institutions that provide loans, guarantees, credit and other forms of financial services – often at subsidised rates – to large infrastructure projects around the world.

Between 2018 and 2020, OECD export credit agencies (ECAs) also provided more international public finance for fossil fuels ($41 billion) than any other type of public finance institution, including multilateral development banks like the World Bank. They spent five times more on fossil fuels than renewable energy projects every year.

Too much LNG

Without ECA support, many new oil and gas projects would not go ahead. Over the last decade, these institutions have pumped over $80 billion into liquefied natural gas (LNG) projects, which receive the overwhelming majority of ECA support.

Projects include the Vaca Muerta gas pipeline in Argentina, a carbon bomb that threatens to release 50 billion tons of carbon dioxide over its lifetime; and $14 billion in loans and guarantees to a controversial LNG project in Mozambique. LNG is often cited as a bridge fuel in the clean energy transition, but the reality is the opposite. We already have more LNG infrastructure than we can use to stay within safe climate limits. 

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Every dollar spent on new fossil fuels puts the brakes on our clean energy transition. To keep global temperature rise to within 1.5C – as per the Paris Agreement goal – the International Energy Agency is clear there is “no need“ for investment in new supplies of coal, oil and gas.

Under the Paris Agreement, all countries promised to “make financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development“, but the opaque governance structure of the OECD provides a loophole for oil and gas finance to keep flowing, via ECAs.

Public money

This isn’t a good way to spend public money. With peak demand for fossil fuels now expected as soon as 2030, any investment in new fossil fuel projects risks failing to deliver a return. Economists have estimated that around $1.4 trillion in oil and gas assets are at risk of becoming stranded.

Far from delivering energy security, public investment in fossil fuels exposes us to huge economic risks, whereas channeling this money into clean energy could open up new economic opportunities. Every dollar of investment in renewables creates three times more jobs than investment in fossil fuels.

Poll after poll shows that voters in OECD countries don’t want their money going into fossil fuels either. Almost two thirds of British and Canadian voters want their governments to stop subsidising fossil fuels.

In the United States there’s majority bipartisan support for ending fossil fuel subsidies.

Using public money to prop up a twilight industry isn’t in the public interest – it makes us all worse off. 

At the Glasgow climate conference, Cop26, a majority of OECD member countries committed to ending public fossil finance for the unabated fossil fuel energy sector by the end of 2022, including by driving multilateral negotiations through the OECD.

Backtracking

Despite this, some OECD countries have backtracked on their commitment. Research from Oil Change International shows that since 2021, the United States, Germany, Italy and Japan have approved at least $5.2 billion in new public finance for international fossil fuel projects.

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This year alone, the US, via its ECA, the United States Export-Import Bank (EXIM), provided $740 million to oil and gas projects around the world. If President Joe Biden is to become the climate leader he wants to be, there is clearly much more to do. 

OECD members already signalled the beginning of the end for public fossil fuel finance, by ending ECA support to coal-fired power in 2021.

The UK, EU and Canada proposals on the table represent a rare moment of leadership that must help set the stage for forging agreement on a global phase-out of fossil fuels at the upcoming climate conference in the United Arab Emirates.

They must not be shut down and strung out by OECD members still clutching onto fossil fuels such as Japan, South Korea and the United States.

Countries should use this week’s meeting to reform export credit agencies for good, so they catalyse the clean energy transition and preserve our planet, rather than destabilise it.

Sandrine Dixson-Declève is the co-president of The Club of Rome and co-lead of the Earth4All initiative

The post The OECD must take its chance to stop funding oil and gas appeared first on Climate Home News.

Nearly two years on, Climate Home News looks at how these commitments are holding up to the test of time.

• Methane Pledge
• Forest Pledge
• International Fossil Finance Pledge
• Glasgow Financial Alliance for Net Zero (GFANZ)

METHANE PLEDGE

WHAT: Reduce human-made methane emissions by 30% between 2020 and 2030. Cutting the amount of methane present in the atmosphere is important because it is a much more powerful greenhouse gas than carbon dioxide despite having a shorter lifespan.

WHO: 104 countries, led by the US and the EU, signed up to the pledge when it was first announced at Cop26 in Glasgow. The number of signatories has since risen to 150. However, they only represent about half of global methane emissions as China, India and Russia – three of the world’s top four emitters – have not joined the coalition.

HOW IT IS GOING: The raw figures paint a fairly grim picture. Since Cop26, the concentration of methane in the atmosphere has kept rising fast and it is now more than two and a half times its pre-industrial level.

Over half of the emissions come from human activities, like fossil fuel extraction, farming and landfills, with the rest caused by natural sources. Under current trajectories, total human-made methane emissions could rise by up to 13% between 2020 and 2030 – the pledge’s timeframe.

This graph shows the globally-averaged, monthly atmospheric methane concentration since 1983. Image credit: NOAA Global Monitoring Laboratory

Targeting the oil and gas sector is seen by many as the easiest and fastest way to bring down emissions in the near term. Experts say existing technologies already provide cheap and effective ways to plug leaky infrastructure like pipelines and gas storage tanks.

However, the technological developments have not yet been converted into real, widespread action. According to the International Energy Agency (IEA), methane emissions from oil and gas remained “stubbornly high” in 2022 even as the energy companies’ bumper profits made actions to reduce them cheaper than ever. “There is just no excuse”, the IEA chief Fatih Birol commented.

Raft of initiatives

But judging the pledge’s progress on current numbers only tells half the story, argued Jonathan Banks, global director of the methane programme at the Clean Air Task Force (CATF). “Emissions are not going to turn around immediately,” he told Climate Home. “If you look at the work going into the pledge, building the funding and technical resources to bring emissions down, I think it could potentially be on track for success”.

A series of initiatives have been set up to help countries deliver on the pledge. The UN’s Climate and Clean Air Coalition (CCAC) is helping over 30 developed and developing countries to establish plans to achieve the 2030 target.

Canada has set out a strategy that it expects to reduce domestic methane emissions by “more than 35%” by 2030, compared to 2020.

Methane leaking from Chelmsford compressor station, UK on 15 October 2021, picked up by a special camera (Photo: Clean Air Task Force/ James Turitto)

The Global Methane Hub (GMH), a philanthropic organisation, is also supporting signatories of the methane pledge with technical assistance and funding. Carolina Urmeneta, a director at the GMH, told Climate Home News that over the last year, the group has focused its work on developing systems to monitor methane emissions rates from oil and gas and landfill installations using satellites.

She said reaching the 2030 target “is possible and cost-effective, but it is not easy. We need to improve data transparency and increase funding for projects with methane targets.”

Regulations drive

Some progress has also been made on the regulatory front. The USA introduced new rules to address methane emissions caused by oil and gas companies through the Inflation Reduction Act. Using a carrot-and-stick approach, it provides $1 billion in public subsidies to take action, while charging a fee for excessive emissions.

In May the European Parliament agreed on tougher measures to tackle methane emissions in the energy sector. The approved text calls for binding emission reduction targets, stronger obligations for fossil fuel operators to detect and repair leaky infrastructure and the application of the same measures to exporting countries outside of the bloc.

While the final rules are still being negotiated with the EU’s national governments, CATF’s Banks believes they could have a “huge global impact” if introduced in their current form. “The methane emissions associated with the gas Europe buys from the rest of the world is quite large, so such measures could really drive some change”.

New announcements are expected at Cop28 in Dubai, after the summit’s president Sultan Al Jaber set the phaseout of methane emissions in oil and gas by 2030 as one of his priorities. “More than 20 oil and gas companies have answered Cop28’s call,” he said this week. “And I see positive momentum as more are joining”. But the UAE has been accused of double standards as it failed to report methane emissions to the UN for a decade, as the Guardian reported.

While it has not signed the pledge, China is expected to announce its long-awaited methane plan at Cop28.

FOREST PLEDGE 

WHAT: End and reverse deforestation by 2030. Country leaders pledged to conserve forests, tackle wildfires, facilitate sustainable agriculture, support indigenous populations and “significantly” increase the provision of finance towards achieving those goals.

WHO: More than 140 countries joined the coalition. Signatories of the pledge – including large forest nations like Brazil, Indonesia and the Democratic Republic of Congo – cover around 90% of the world’s forests. But major G20 powers such as India, South Africa, Saudi Arabia and rainforest nations like Bolivia and Venezuela did not join the group.

HOW IT IS GOING:  Countries remain off track to reach the goal of the Glasgow pledge and end deforestation by 2030, according to an assessment done by a coalition of NGOs.

Across the world, tree loss recorded in 2022 was 21% higher than the level needed to be on course to reach zero in seven years’ time, the report said.

Source: Forest Declaration Assessment

In fact, the situation is getting worse. Global deforestation grew 4% last year, wiping out 6.6 million hectares of forest, according to the study. That’s a tree-covered area nearly as big as Ireland disappearing in one year.

“The world’s forests are in crisis. All these promises have been made to halt deforestation, to fund forest protection. But the opportunity to make progress is passing us by year after year,” said Erin Matson, a lead author of the Forest Declaration Assessment.

Saving the Three Basins means stopping fossil fuel expansion

There are important regional differences, however. While tropical Asia is faring better, with Indonesia and Malaysia on track to hit their targets, Latin America and the Caribbean are farthest off track.

The election of President Lula da Silva in Brazil has led to a reversal in the skyrocketing deforestation rates in the country, which hosts most of the Amazon rainforets.

But efforts to create a regional forest protection coalition have failed. At the Amazon summit in August, eight South American countries failed to agree on a pledge to end deforestation by 2030 following opposition from Bolivia and Venezuela.

An aerial view shows deforestation near a forest on the border between Amazonia and Cerrado in Nova Xavantina, Mato Grosso state, Brazil in 2021 (REUTERS/Amanda Perobelli)

While it included a larger number of countries, the Cop26 commitment was not entirely new: it repeated promises previously made in the 2014 New York Declaration on Forests, which by then had already failed to achieve some of its core targets.

Keen to avoid the same fate, self-declared “high ambition” countries launched a new initiative designed to deliver the pledge.

“High ambition” efforts

Chaired by the USA and Ghana, the Forest and Climate Leaders’ Partnership (FCLP) has promised to spur global action and provide accountability.

Only a fifth of the original 140 signatories have joined the group so far, with Russia and Indonesia among the most notable absentees.

Christine Dragisic, who leads the forest team at the US State Department, said the goal is to create a “high-level community” that brings together governments, indigenous people, philanthropies, civil society and the private sector to drive action forward and hit the 2030 target.

“Can we do it? Yes. Is it going to be hard? Definitely. Does it require everybody to be at the table? For sure”, Dragisic told Climate Home.

An Indonesian ranger patrols a forest protected through a carbon credit project. Photo: Dita Alangkara/CIFOR

Since its launch last year, the FCLP has worked on a number of initiatives offering technical and financial solutions to forest nations, looking at the role of carbon markets and the forest economy in averting tree loss.

Finance gaps

As with most climate actions, however, it ultimately comes down to the question of money. “The delivery of climate finance is very important to achieve a lot of these targets and that is still very much lacking”, Roselyn Fosuah Adjei, director of climate change at Ghana’s forestry commission and co-chair of the FCLP, told Climate Home.

“The kind of finance we need is not finance for today or tomorrow, it’s finance for yesterday. We are already behind schedule. If it gets delivered fast there’s lots that we can do to close the gap that is now quite wide,” she added.

The Cop26 pledge was accompanied by a commitment from a group of rich nations to provide $12 billion in forest-related climate finance between 2021 and 2025. The money should be channeled to developing countries enacting concrete steps to halt forest loss.

The donor countries reported last year that they had provided $2.6 billion – over a fifth of the target amount – in 2021. They are expected to provide an update at Cop28.

INTERNATIONAL FOSSIL FINANCE PLEDGE

WHAT: End new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited and clearly defined circumstances that are consistent with a 1.5°C warming limit and the goals of the Paris Agreement.

WHO: 34 countries and five development banks – predominantly from wealthy cuontries – signed up to the pledge at Cop26. These included the G7 nations – with the exception of Japan – and most EU member states.

HOW IT IS GOING: Among the signatories that give lots of money to the energy sector, the vast majority have introduced policies in line with the promise made in Glasgow.

The United Kingdom, France, Denmark, New Zealand, Canada, Finland and Sweden have stopped providing loans and guarantees for oil and gas extraction and processing overseas through their export credit agencies.

Their actions have shifted at least $5.7 billion per year in public finance out of fossil fuels and into clean energy, according to analysis by Oil Change International and E3G.

On the other hand, however, the USA, Italy and Germany have continued funding international fossil fuel projects in 2023 in breach of the pledge.

They were supposed to stop funding foreign fossil fuels by December 2022. But since then, they collectively approved over $3 billion in financial support to oil and gas overseas programmes.

Most of the funding comes in the form of state-backed guarantees provided by export credit agencies. These products limit the risk taken by companies selling services and goods in other countries, influencing investment.

Among the projects receiving backing from the US and Italy was the expansion of an oil refining facility in Indonesia’s Borneo.

The US Export-Import Bank justified its backing of the project by claiming it would allow Indonesia to reduce its reliance on imported fossil fuels. The Italian agency did not provide a motivation for the decision.

Germany and the US have also poured hundreds of millions of dollars into projects aiming to boost the production and trade of liquified natural gas (LNG), which has been more sought after since Russia invaded Ukraine and Europe cut back on Russian gas.

Political splits and carve-outs

In the US, efforts to comply with the Glasgow pledge have caused a split among senior officials in the Biden administration and in the federal agencies charged with disbursing the money, as Politico revealed.

The White House has drafted guidance underpinning the investments - without making it public -, but the final decisions are made by agencies like the US Export-Import Bank (Exim).

“It is a struggle to get US Exim to comply, so far they’ve ignored the Cop26 commitment”, says Nina Pusic from Oil Change International. “It will require a lot of political weight from the Biden administration and Congress.”

Indonesia delays coal closure plans after finance row with rich nations

Italy looks likely to keep funding fossil fuels overseas for years to come. Its policy guidance lays out a "gradual dismission of public support to new requests of fossil fuel projects", seeing support for gas extraction and production run into 2026. Oil processing and distribution projects should be excluded from the beginning of next year.

But Italy has also carved out a wide range of exceptions that allow its export credit agency to keep greenlighting support for fossil fuel projects on "national energy security" and "energy efficiency" grounds.

The FSRU Toscana LNG regasfication platform off the coast of Italy (Photo: OLT Offshore LNG Toscana)

Germany's main export credit agency has just introduced this month new policies restricting support for fossil fuel projects. However, it allows for financing the development of new gas fields and related transport facilities until 2025 when justified by "national security and in compliance with the Paris Agreement targets".

Investment in new coal, oil and gas production is regarded as incompatible with limiting global warming to 1.5C, according to the International Energy Agency (IEA) and a large number of climate scientists.

"Germany has a vast amount of fossil fuel transactions pending approval", says Oil Change International's Pusic. "The success of the new policy will be judged on the decisions made on those projects".

GLASGOW FINANCIAL ALLIANCE FOR NET ZERO (GFANZ)

WHAT: Commit to achieving net zero emissions by 2050 at the latest by aligning their portfolios and investment practices with the goals of the Paris Agreement.

WHO: Over 650 institutions across the financial sector, including banks, insurers, asset owners, asset managers, financial service providers, and investment consultants. Gfanz members represent 40% of global private financial assets. They are grouped together under eight independent net-zero financial alliances focused on specific branches of finance.

HOW IT IS GOING: It is not easy to gauge the progress of a wide-ranging initiative with loosely defined targets and a constellation of constituent parts.

GFANZ says it has made progress over the last two years by raising the ambition of financial institutions and by providing tools and guidance to turn commitments into action.

"Two years ago, not a single bank had set a science-based 2030 target. Now nearly all global, systemically important banks have voluntarily and independently set 2030 targets for oil and gas", a GFANZ spokesperson said.

Above all, the mere fact that the alliance still exists at all is a first - albeit limited - marker of success, after an especially tumultuous year.

The prospect of ending up in legal hot waters in the US, where Republicans have driven an anti-climate investment backlash, has dampened the enthusiasm of many leading signatories. The result is that parts of the alliance have been hemorrhaging members, while other components have resorted to watering down their requirements to assuage concerns.

Mark Carney, former Bank of England governor, launched GFANZ at Cop26. Photo: World Economic Forum/Valeriano Di Domenico

Troubles started brewing in mid-2022 when a group of leading US banks threatened to pull out over fears of being sued because of having decarbonisation policies imposed by external parties. That's after US Republican politicians had accused financial institutions of breaching antitrust rules by grouping together in a climate cartel that limits opportunities for investors.

A month later, in October 2022, Gfanz dropped a key requirement for its members to sign up to the UN Race to Zero initiative - a verification body for corporate and financial sector pledges - which had been seen as a way to prevent greenwashing.

GFANZ told Climate Home that the alliances are still working with Race to Zero and "continue to note" its advice and guidance.

Heading for the door

Those US banks eventually ended up staying in but, despite the less stringent criteria, other influential members began heading for the door in droves soon after.

Vanguard, one of the world's biggest asset managers, quit the Net Zero Asset Managers' initiative - part of Gfanz - saying it wanted to "provide clarity to investors" and "speak independently on matters of importance" to them.

But it's the insurers' coalition, known as NZIA, that has suffered the biggest - nearly fatal - wounds. The group has lost nearly two-thirds of its members since the start of the year, with leading firms like Allianz, Zurich, Munich Re and Lloyd's of London throwing in the towel.

Again a major driver for the mass exit was a letter written in May by 23 Republican attorney generals accusing signatories of advancing "an activists climate agenda" with "serious detrimental effects on the residents" of their states. The spark for this was the alliance's initial obligation to its members to set emission reduction targets by the end of July.

Staring at the real prospect of shutting down, the insurers' alliance again watered down its requirements, becoming effectively toothless.

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"NZIA member companies have no obligation to set or publish targets", wrote the UN Environment Programme (Unep) - convener of the initiative -  in a clarification letter. "Each company who chooses to be a member of the NZIA unilaterally and independently decides on the steps on its path towards net zero."

Meanwhile, GFANZ says its members have submitted over 300 interim targets "representing clear progress in implementing commitments" to divert finance in line with net zero goals.

But while plans have been announced, many GFANZ members are also being accused of not putting their money where their mouth is. 161 members of the coalition have collectively invested hundreds of billions of dollars into the expansion of the coal, oil and gas industries since they joined the group, according to research by campaigning group Reclaim Finance.

A GFANZ spokesperson said "it’s clear a lot of work still needs to be done to ensure the world is deploying capital consistent with a 1.5C pathway".

"GFANZ is helping to support financial institutions to each set their own sectoral targets and develop transition plans and release guidance on their plan for a managed phaseout of fossil fuels," they added.

The article was amended on 6/11 to add comments from GFANZ received after publication

The post Forests, methane, finance: Where are the Cop26 pledges now? appeared first on Climate Home News.

President Felix Tshisekedi, who is seeking re-election in December, has promised to shake off Congo’s reputation for opaque dealings as he pushes plans to develop dozens of oil and gas blocks – many of them in environmentally sensitive areas.

First to be auctioned were three methane blocks in Lake Kivu, sometimes dubbed a “killer lake” because of a risk of deadly eruption. The extraction project aims to supply gas for power generation, including to hundreds of thousands of people living on the lake’s shores.

The auction, which took place last year, was the first of its kind to be conducted in Congo under a law from 2015 that was designed to promote transparency in the oil and gas sector.

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Canada-based Alfajiri Energy Corporation was included in the auction although an evaluation report produced by a government-appointed commission in October 2022 found the company did not meet minimum financial requirements.

The report, along with two others, was obtained by Reuters in collaboration with the Bureau of Investigative Journalism, a non-profit news organisation. Reuters also independently interviewed three sources directly involved in the auction.

Additionally, a technical report assessing the bid, dated 8 December 2022, appeared to have been altered in Alfajiri’s favour, according to the documents and the sources. The documents do not show why Alfajiri was included in the auction, who requested that the report be edited, or why.

No financial records

Hydrocarbons Minister Didier Budimbu denied any problems with the tender process in an emailed response to questions from Reuters.

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“The process was very transparent and it will remain so. I will make sure of it,” he said in an earlier text message exchange.

Tshisekedi’s office declined to comment, saying any questions about the auction should be directed to Budimbu.

In a written reply on 23 October, Alfajiri’s founder and chief executive Christian Hamuli called the process “rigorous, transparent and credible.”

Congo-born Hamuli registered Alfajiri Energy Corporation on January 10, 2022, three weeks after plans for the auction were first announced, using the address of his home in Calgary, Canada’s company registry shows.

The hydrocarbons ministry’s call for expressions of interest in the project spelt out a clear stipulation, only companies with three years of financial records would be considered suitable, a requirement that reflected a clause in Congo’s new oil and gas regulations.

Specifically, articles 66 and 67 of the regulations say offers will be rejected if they do not meet certain conditions including “the presentation of balance sheets and statements from the last three financial years.”

First hurdle

The first hurdle to clear was the pre-selection stage where a panel of government oil sector officials and technical experts evaluated the suitability of the companies competing for the three blocks.

Having only existed for a few months, Alfajiri failed to produce the required financial records, according to the eight-page, Oct. 22 report from the committee. It showed the three rival applicants for the Lwandjofu block met the requirement.

Joseph Nzau was a lawyer for the ministry when the regulations governing the sector were drafted. He said the financial history requirement was created after several companies that signed previous oil and gas contracts ended up lacking the means to execute projects.

“The rule is clear. A company applying for pre-selection must provide proof of its accounts and balance sheets for the past three years,” he said. He declined to comment on the merits of individual companies.

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In his response to Reuters, Minister Budimbu denied Alfajiri’s lack of financial records should have disqualified it in the pre-selection phase, saying this amounted to a misinterpretation of the law.

Budimbu was responsible for organising the auction to find suitable operators. He was also in charge of forming the panel that drew up the bid assessment reports and passing the panel’s conclusions to the council of ministers, which approved the winner based on the recommendations.

He said Alfajiri scored highly enough to make it through the pre-selection stage despite its lack of paperwork.

Alfajiri’s Hamuli did not directly address questions about the lack of required financial records in Alfajiri’s bid. Alfajiri has “highly qualified and experienced professionals with integrity capable of developing the project in a secure manner,” he said.

The ministry has not announced the size of the investment in the blocks, how the project will be financed, or production goals.

“Killer lake”

Lake Kivu lies in the Rift Valley on Congo’s eastern border with Rwanda. Dissolved at great pressure in water hundreds of meters down near the lake’s bed are large methane reserves and even greater quantities of carbon dioxide.

Lake Kivu is one of three lakes in Africa scientists say are at risk of limnic eruption.

Extracting methane from Lake Kivu, located in one of Africa’s most heavily populated areas, could provide power to some of the 80% of Congolese who have no access to electricity, and potentially reduce the risks from the lake, the Congolese government and experts say.

However, some scientists, including vulcanologist Dario Tedesco, say failure to properly reinject water and by-products could increase the chances of eruptions of carbon dioxide and poisonous hydrogen sulfide, pollute the lake bottom and alter its delicate chemical and physical balance.

Moving on

Despite its lack of financial history, Alfajiri advanced in the process, and its bid for the Lwandjofu block was assessed alongside those of US firm Winds Exploration and Production and Congolese-Lebanese firm Ray Group.

Alfajiri’s bid performed badly on several criteria at this stage, and a report from the panel dated Dec. 8, 2022 showed it received the lowest suitability score among the three bidders.

Of the three submissions, Alfajiri initially received the lowest score – a total of 30.7 points out of a possible 100 – on a scale that assessed how well the bids met financial and technical criteria including their proposed partnership terms with Congo, work plan, and the qualifications of key personnel.

Of that score, it received just two of a possible 30 points in the financial portion of the assessment and 28.7 out of 70 points in the technical portion.

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Alfajiri failed to demonstrate it employed qualified staff, had not submitted a feasibility study or a timetable for the project and “had not taken account of public safety issues,” the report said.

Winds scored the highest of the three bidders, with 53.8 points, the report shows.

Score boosted

But then, an edited version of the report put Alfajiri in first place, the documents show.

The report’s second version – also dated 8 December and seen by Reuters – raised Alfajiri’s score to 55.75, putting it ahead of Winds.

In his response, Budimbu told Reuters the only version of the final report that mattered, and that he had received, was the one in which Alfajiri was awarded the highest score.

Although it gave a higher score, the final report added a number of concerns to the earlier version, including comments that Alfajiri had proposed insufficient financing for requisite state bonuses and social projects.

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Reuters was unable to establish the motive for the new scores in the second report.

Asked if he was aware about any irregular change to the results, Frank Ihekwoaba, chief executive of Winds said “we heard rumours” but had not wanted to escalate it to avoid souring relations with the government. He said the process seemed rigorous for Winds, which won another of the three blocks.

Ray Group did not respond to Reuters’ request for comment.

Hamuli did not directly respond to Reuters’ questions about the changes in the report that led to it winning the block.

Regarding Alfajiri’s suitability for the project, he said Alfajiri was a start-up that would use a better extraction method than competitors, without giving further details on this method.

“I am very proud and confident of our team’s ability to bring the project to fruition,” Hamuli said by text message in September.

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