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Natural Gas and the European Green Deal - YouTube
Channel: Into Europe
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in 2015 world leaders pledged to keep
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the temperature from rising more than 2
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degrees and in 2019 the european union
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unveiled its response the european green
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deal
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it commits europe to carbon neutrality
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by 2050
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but it's not a concrete plan
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instead it lays out the different pieces
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of legislation that the eu needs to
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produce to reach that transition
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one of those pieces is about green
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finance it's called the green finance
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taxonomy it's more than 200 pages long
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you don't need to read it
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what it says is something about the way
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the eu operates and how it plans to get
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money from investors to sustainability
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related projects
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the document says something about the
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way the european union is planning its
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energy transition
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and the role fossil fuels will play in
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it
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it raises questions of how green the eu
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wants to be
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but also can afford to be
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the main focus of the european green
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deal is to decarbonize the european
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union's economy
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the question of decarbonization focuses
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on four aspects industry energy
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transportation and agriculture which are
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responsible for most of the eu's co2
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emissions it means producing powering
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moving and growing the same things as
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before with less energy and without the
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co2 emissions associated with it
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but while we think of the sustainability
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transition in terms of electricity
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production
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fossil fuels are ingrained in every part
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of the economy whether it be the cars we
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drive heating our homes shipping or
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manufacturing industry building blocks
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like steel cement they're everywhere
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in a lot of ways decarbonizing the
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economy means electrifying it
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it means replacing fossil fuels in every
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part of the economy
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but that's expensive and the european
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union needs to spend 2.8 trillion euros
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up till 2030 to reach its climate goals
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but only a fraction of that will come
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from the eu budget the rest will come
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from private investors
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most of that money needs to go to
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companies for decarbonization
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that's where the idea of green finance
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comes in to help get money from
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investors to green projects
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when a company wants to invest in a
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project like building a wind park it
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usually doesn't have the money for it up
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front so it goes to financial markets
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and investors companies can either take
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on debts call bonds or sell part of
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their company called shares to investors
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to finance future activities but what
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investors are looking for are two things
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a high return on investment which means
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they make money and lower risk which
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means their investment is safe
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green investments are seen as lower risk
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because they are future proof
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if a coal power plant is built today the
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chances are it will be closed before the
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end of its lifetime so it doesn't make
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for a good investment
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the problem up until now is that the
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definition of what a green investment is
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is still vague and there have been
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accusations that green finance is green
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washing that it was being used to fund
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projects that aren't actually green
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so that's where the green taxonomy comes
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in it aims to filter out unsustainable
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activities and prevent green washing
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it's currently a list of criteria and of
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70 activities that are considered to be
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green
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it tells companies how to manufacture
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basic building blocks of the economy in
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a carbon neutral and circular way it
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includes renewable energy but also the
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manufacturing of industry building
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blocks like steel or cement
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these activities get a green label which
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makes them eligible for green finance it
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means that they are low risk and
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attractive investments so that's it the
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green finance taxonomy is just a set of
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rules for green finance
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yes that's what it aims to do
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but the challenge is that deciding what
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is green is not only a scientific
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decision but also a political one
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it means making a trade-off between what
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is sustainable and what is feasible it
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tells us that the green transition the
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eu ambitions may first start off grey
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at the center of this debate is one type
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of technology and the question of
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whether to include them in the taxonomy
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they're being called transitional
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technologies and they're not exactly
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green but they might be a necessary step
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to make the european union's climate
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goals affordable feasible and acceptable
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a transitional technology is in a sense
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not entirely green but greener and the
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idea is that they would help speed the
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eu's transition from the worst fossil
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fuels before also being eventually
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replaced by renewable energy
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the main candidate for this status are
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natural gas nuclear energy and carbon
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capture technology which involves
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capturing the co2 from polluting
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activities and storing it underground
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while activists have labeled this as
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green washing and called it a watering
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down of the transition it raises two
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questions why is the european union
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considering these technologies and if
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decarbonization means full
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electrification why are there fossil
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fuels being included
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but this goes down to three elements of
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the sustainability transition industry
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energy and transportation
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will leave out agriculture which is the
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focus of another piece of legislation
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for these aspects the idea is to go from
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a system where fossil fuels are used to
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one where everything is produced powered
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and moved with renewable energy but the
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problem is that a lot of the
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technologies needed to do this don't
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exist or don't have the scale to allow a
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direct switch from one to another
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battery and green hydrogen production
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the two technologies essential to full
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decarbonization and electrification are
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still in their infancy
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so the idea with transitional
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technologies is to add an extra step to
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the energy transition
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one where fossil fuels are used in a way
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that will allow them to be replaced by
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renewable energy later on
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for industry it means using hydrogen
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from natural gas instead of using
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natural gas directly as an additional
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step to manufacture goods
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this can eventually be replaced by
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renewably produced hydrogen in the
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future
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and in transportation it means using
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electric cars that are powered by fossil
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fuel power plants until renewables can
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replace them
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but most of the debate has taken place
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around the use of natural gas and
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nuclear for energy production where the
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main goal is to phase out of coal
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here renewables face their biggest
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challenge it's called the duct curve
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no not this duck
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it's the idea that energy generated by
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renewable energy doesn't match with when
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it's used
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this line represents when renewable
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energy is being produced and this one
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when it's being used and as the share of
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solar energy increases that mismatch
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will become worse
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to solve this requires building a lot of
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batteries cheaply or power plants which
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unlike renewables can be turned on and
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off the easiest solution would be to
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build nuclear and natural gas power
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plants to produce electricity and heat
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when renewables can't
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the difference here is that there is no
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effective way to add an extra step to
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the transition from transitional
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technologies to renewables which can be
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replaced later on and for that reason
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energy production from natural gas has
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been dropped from the taxonomy
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what's important to note is that this
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transition with an additional step is
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only a partial one it requires the added
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step of carbon capture to be
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emissions-free
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but at the same time it opens up the
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door for full electrification when the
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technologies needed to scale become
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available
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the problem is public opinion related to
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the very challenges they pose
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while natural gas emits less co2 than
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coal one burnt it also emits methane
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when extracted which contributes
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extensively to the greenhouse
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nuclear accidents while rare can happen
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and there's still the problem of what to
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do with radioactive waste
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carbon capture despite being labeled as
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necessary by the international panel on
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climate change is mostly an untested
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technology
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this has been made worse by the fact
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that there has been extensive lobbying
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by the fossil fuel industry to give
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natural gas a green label
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in 2020 the eu came under fire for
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allowing blackrock a financial firm
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heavily invested in fossil fuels to give
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financial advice about how to set up
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green finance
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the problem is that while these
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transitional activities are seen as a
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bridge to a low carbon economy and they
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would ideally be phased out by 2050 they
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could create lock-in mechanisms
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if gas power plants are endorsed by the
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green taxonomy and are built
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infrastructure will also have to be
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built to support them
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it means building gas terminals and
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equipping homes to be heated by it
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money that could have instead been spent
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on other aspects of the green transition
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and once implemented it would make it
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more expensive to switch away from it
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later on
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while the inclusion of these
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technologies means europe's transition
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may start off gray and it risks lock-ins
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it is likely the only transition
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countries will be willing to sign up for
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and able to afford
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this was into europe thanks for watching
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if you like this video make sure to like
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