Welcome back to a special issue of Molecules, the Eurogas newsletter, that focuses entirely on clean energy technologies developed here in the EU.
At Eurogas we believe that in a changing world, with the challenges of both a digital and an environmental transition, innovations are key to keeping Europe as a climate leader – as well as helping European industry to adapt, modernise, and stay ahead of the game.
In the coming weeks and months, we would like to showcase some incredible technological developments to you, and demonstrate the ingenuity, potential and excellence we have on our doorstep when it comes to climate technologies.
One way we will do this is through a series we are calling Eurogas Tech Talks. Each week, we will invite an energy expert to discuss a climate technology and provide a short video of this interview. We will cover anaerobic digestors, pyrolysis, electrolysers, turbines, new types of engines and many more. We will talk about what these technologies can do, what they can’t do, and crucially, why they haven’t already been rolled out if they are indeed such great solutions.
Finding the barriers to decarbonisation in every single sector of our economy is now imperative. We know that the post-Covid Industrial Strategy and the Green Deal must come together to achieve a carbon-neutral industry by 2050 – but we must also put solid measures in place to save European industries from tough global competition. And we see an opportunity for Europe’s championship here, in the development and use of clean energy technologies. These technologies can provide skilled work, help us to decarbonise, and demonstrate how Europe remains a climate leader. In turn, the technologies can be exported, to support decarbonisation around the world.
We have all been affected by the pandemic. We now have an opportunity to rebuild, and to use recovery funds for an ambitious post-Covid industrial recovery plan, ensure our industrial sectors remain strong, and keep our climate goals at the forefront of our progress.
By Poppy Kalesi, Environmental Defense Fund
The role of gas and relevance of Europe’s gas industry to the European energy transition and welfare stands at a pivotal point in time. While some national governments and companies support gas as a transition fuel through infrastructure investments and their purchasing decisions, most do so opportunistically and not as a matter of long-term strategic planning. In addition, the sector is under increasing pressure to improve its environmental performance by a much broader set of stakeholders, including investors and civil society. This requires a radically different mindset of an industry, which is used to interact with few, big, strategic partners.
In response to the increasing pressure, the industry has enthusiastically embraced hydrogen, biogas and biomethane – three technologies and markets at different stages of development and commerciality which have nevertheless one thing in common: they become competitive to the core business, gas, at CO2 prices of EUR 80- 90/tn. However, until the political will to support these price levels is there, gas will inevitably play a role as a bridging fuel in the short-to-medium term in countries that rely heavily on coal for power or oil for heating.
This has been the UK playbook for quickly reducing emissions and it has proven effective in reducing CO2 emissions. However, what we know in 2020 – and that the UK did not in 2010 – is that the climate value of gas is challenged by its methane emissions footprint. And this has to be factored in all energy decisions, both strategic and opportunistic.
Fortunately, there are many technologies, both new and mature, to reduce methane now. With this in mind, the key differentiator between companies that are likley to succeed commercially and those that are likley to struggle is the willingness to invest and become the first buyer of innovative methane management technologies.
An array of monitoring and detection solutions are being developed by highly competitive EU start-ups to see how best to minimise risk of methane leakages and cut emissions, at limited or no net cost. It is the demand for such new technologies that needs to increase to turn them into market innovation. As Europe starts working toward climate neutrality, these first users will stand to gain the most.
Nurturing Europe’s place in the low carbon gas technology market can also result in new high-skilled, well-paid quality jobs. There are plenty of valuable skillsets across the oil and gas industry that could be transferred to the emissions mitigation sector. Prominent companies in the methane management market like The Sniffers, Carbon Limits and Kayrros are all led by former oil and gas workers. Over the longer term, the skills of many traditional oil and gas workers will be in demand constructing and maintaining offshore wind turbines, engineering and operating industrial carbon capture and storage projects, or producing and distributing the ‘green’ hydrogen that could one day play a role in meeting the energy needs for transportation, industry and buildings.
This is why it is not only in the sector’s best interest to become a good first-user and a better buyer of innovation, but also to support policies that ensure its products are fit for a climate neutral purpose. The upcoming EU gas market reform represents the next big opportunity to provide industry with the regulatory certainty it needs to spur innovations that can help oil and gas companies virtually eliminate methane emissions.
*** This oped was contributed by Poppy Kalesi. Ms Kalesi leads EDF’s Energy program in Europe with a focus on delivering ambitious EU policies that will contribute to deep reductions in global oil and gas methane emissions by 2025. Poppy’s experience includes energy and climate policy, business strategy and technology innovation from roles previously held with the European Commission, the European Parliament, Eurelectric, Statoil and the Norwegian Ocean Industries. Based in Norway, Poppy has also served on the Boards of the European Aquaculture Technology and Innovation Platform and the Norwegian Institute for International Networks.
By David Wells, Vice President Shell Energy Europe and Environmental Products
Shell welcomes the European Green Deal and supports the EU’s target to achieve climate neutrality by 2050. To contribute to this ambitious objective, the European gas industry will need to embark on a significant transformation and the gas market will need to be decarbonised over time.
In the run up to 2030, natural gas will play an important role as a substitute for coal and nuclear in dispatchable power generation, as well as a source of flexibility in electricity systems. In the medium term, gas can act as a partner for renewables in providing power. Longer term, decarbonised and renewable gas will continue to be essential in meeting energy demand that cannot be electrified. Shell believes that, together with large-scale electrification, lower-carbon gases will have an important role to play.
In order to meet the EU’s climate ambitions there must be change across all sectors. For the gas industry, reform is vital in residential heating, industry, power and gas in transport. Shell believes this will require:
Clean hydrogen at the core of the transition to climate neutrality
Decarbonised and renewable gases, notably hydrogen, will have a key role to play by helping to decarbonise sectors where electrification is not currently an option such as freight, heavy road transport or industry. Shell Scenarios Sketch “A Climate-Neutral EU by 2050” shows that to achieve net-zero emissions in the EU energy system, hydrogen would need to rise from negligible levels today to at least 10% of the EU’s total final energy consumption by 2050.
Accelerating the deployment of clean hydrogen will require measures to kickstart markets in key sectors in tandem with incentives for investment in supply and infrastructure. Consideration could be given to demand-side mandates for the use of clean hydrogen in specific hard-to-abate sectors, particularly in the shorter-term.
Where is Shell investing to enable this transition?
Achieving this scale of hydrogen deployment will require significant investment. Shell has already made a start. Along with partners, Shell is building the world’s largest polymer electrolyte membrane (PEM) hydrogen electrolysis plant. Supported by the Fuel Cells and Hydrogen Joint Undertaking, the REFHYNE project will use renewable electricity to produce green hydrogen at Shell’s Rheinland refinery in Germany. And we are also active in blue hydrogen. Together with our partners, we continue to advance our project to provide CO2 from clean hydrogen production to the Port of Rotterdam Transportation Hub and Offshore Storage (PORTHOS).
The transition to a low-carbon gas market will require investments in other forms of decarbonised and renewable gases such as bio-LNG or biomethane. Our projects include a strategic partnership with Renewi and Nordsol in the Netherlands to jointly produce bio-LNG. This collaboration aims to contribute to the circular economy and completes the cycle of turning organic waste into a sustainable fuel for long-haul transport. Shell Energy Europe entered into an agreement to buy biomethane from Nature Energy in Denmark. The long-term agreement is the largest of its kind and demonstrates the important role that biomethane can play in Europe’s transition to a lower-carbon society.
Regulating methane as a matter of priority
The environmental benefits of gas depend on managing methane emissions. Any comprehensive effort to limit global warming must include strong, ambitious and urgent action to reduce emissions of this potent greenhouse gas across the full natural gas supply chain. The Commission’s new Methane Strategy is a positive step that Shell greatly welcomes.
The Commission’s proposal on MRV processes for energy-related methane emissions will help to understand supply chain emissions of all gas sold in the EU and will enable other policies that hinge on credible quantification of emissions. Beyond this, we strongly believe that a methane performance standard of 0.20% should be set for all gas sold in the EU market, including from imports, from 2025. This would be a strong next step to further advance the Methane Strategy.
Embed a sectoral approach to deliver climate neutrality
For the EU to achieve climate neutrality by 2050, every economic sector will need a pathway to net-zero. The pace and the policy mechanisms required will be different in each sector, but they will all need to get there. Earlier this month, the European Parliament voted to introduce sectoral pathways to net-zero in the draft European Climate Law. These will provide an important mechanism to accelerate and scale up the demand for clean energy, including decarbonised and renewable gases, in sync with supply and infrastructure. Our ability to transform as an industry, presents both a challenge and an exciting opportunity to stay relevant and make a significant contribution to the EU’s transition to climate neutrality.
*** This oped was contributed by David Wells, Vice President Shell Energy Europe and Environmental Products. David was appointed President of Shell Energy Europe Limited in May 2017 and is responsible for the marketing and trading of gas and power in Shell’s European energy markets. His organisation is also responsible for the Shell Group’s global trade in environmental products. Please see here for Shell Disclaimer
#GasTechTalks: A LinkedIn Series | 21 October 2020
Starting on the 21 October with ITM Power discussing Electrolysers, we will be meeting with energy experts to discuss the new innovations being designed, manufactured here in Europe.
Head to our LinkedIn page to watch these short interviews and the incredible technologies underway.