Renewables developer says gas is ‘no solution’ to mitigate climate change

EU signals its intention to establish that fossil gas for electricity production is ‘contributing substantially to climate change mitigation’

It will be "disgraceful if the European Commission succeeds in its attempt to label gas as a solution to address global warming", according to renewable energy developer Eddie O'Connor.

In a leaked draft “delegated act” sent to EU member states on December 31st, the commission signalled its intention to enact EU-wide legislation establishing that fossil gas for electricity production is “contributing substantially to climate change mitigation”. A similar status is being applied to nuclear power.

“I am mystified by the European Commission’s attempt to label gas – a fossil fuel and one of the largest contributors to climate change – as a solution to global warming,” the Supernode chairman said.

"Less than a year ago the International Energy Agency warned there can be no new investments in gas – starting now – if we are to meet the Paris climate objectives."

He said the commission's signal to investors and the public now seemed to be the opposite – "that Europe must keep burning fossil fuels to save the planet from heating up".

Procedures

Delegated acts allow the commission to supplement legislation with non-essential elements without following ordinary legislative procedures. The document outlines its intention to classify fossil gas for electricity production as sustainable, arguing it is necessary because renewables “are not yet commercially available at a sufficient scale”.

The commission’s wish to close discussions running for three years was understandable, said Dr O’Connor. “However, arguing that gas must be acknowledged as a solution to climate change because renewables are not commercially available is just plain wrong. The global investments in wind and solar alone were more than five times investments in gas power plants in 2020.”

According to the IEA, $359 billion was invested globally in renewables in 2020 compared to $113 billion in fossil fuel power generation, mainly coal and gas-fired power plants. In 2021, Europe invested $75 billion in renewable power and $9 billion in gas -fired power.

The new infrastructure would inevitably be used for many years to come under the transition definition being pushed by the fossil fuel sector, which facilitates greenwashing and delayed decarbonisation, Mr O’Connor insisted.

The commission’s taxonomy system is intended to direct investments towards sustainable projects and activities, and “should create security for investors, protect private investors from greenwashing, help companies to become more climate-friendly, mitigate market fragmentation and help shift investments where they are most needed”.

Technology

The leaked draft reveals the intention to adopt fossil gas for electricity as a “transitional” technology. The legislation adopted in 2020 establishes that for an economic activity to be “transitional” it must have carbon emissions corresponding with best performance in the electricity sector; must not hamper development and deployment of low-carbon alternatives ;and not lead to lock-in of carbon-intensive assets.

"Gas does not meet any of the criteria allowing an activity to be considered 'transitional' in accordance with EU law. I urge members of the European Parliament and EU member states to veto the commission's delegated act to safeguard Europe's green credentials," Dr O'Connor said.

An expert panel, the Platform on Sustainable Finance, has until January 21st to respond. A majority of 20 out of 27 member states, representing at least 65 per cent of the EU population, would be needed for the council to block the commission’s proposal, while the European Parliament can also oppose it by simple majority.

Ireland’s EU commissioner Mairead McGuinness has insisted the classification is based on scientific advice. The Commission sees a temporary role for gas, especially in countries getting out of using “dirty coal”, but gas was not being given “a green card”, as in time it will have to be replaced by low-carbon gases with strict conditions, she said.

Likewise, she told the Today with Clare Byrne Show on RTÉ Radio last week, nuclear power was a bridge to carbon neutrality by 2050 under strict conditions - and is not seen as a long-term option.

The Commission sees a temporary role for gas, especially in countries using “dirty coal”, but gas was not being given “a green card” as in time it will have to be replaced by low-carbon gases with strict conditions. Likewise, she told the Today with Clare Byrne Show on RTÉ Radio last week, nuclear power was a bridge to carbon neutrality by 2050 under strict conditions and is not seen as a long-term option.

The taxonomy is intended to set standards for what kind of activities businesses can present as “green”. There are plans to make it apply also to EU funds, potentially driving a flood of money towards the sectors included.

Under the draft plans, nuclear power plant investments could be labelled as green if it is a “transitional” fuel and receives a permit before 2045. Any project must include funding, plans and a site for the safe disposal of radioactive waste.