Page 7 - EurOil Week 29 2021

EurOil COMMENTARY EurOil

relocating to other jurisdictions to escape car- particularly from those that want to see natu-
bon costs. The risk is considered less high for gas. ral gas, and later biogas, emerge as a key vehicle
fuel. Natural Gas Vehicle Association (NGVA)
Gains in power and shipping Europe argues that by considering only exhaust
Increased carbon costs will undermine margins emissions, the Commission fails to recognise
across the gas value chain, although in some the contributions that biogas can make towards
markets gas-fired power generation may benefit addressing climate change. In the right condi-
from the larger cost burden on dirtier coal-burn- tions, biogas can be produced in a carbon neutral
ing plants. or even carbon negative way when considering
Poland, for example, relies on coal to produce emissions across the value chain.
80% of its power but has recently put in place In a statement responding to the EC’s pro-
policies to expand the role of gas, supported by posal, NGVA Europe said the Commission had
new import infrastructure. The phase-out of coal “missed the opportunity to also account for the
there is likely to accelerate as the extra carbon positive contribution of renewable sustainable
cost makes the fuel uncompetitive. fuels such as biomethane.”
In countries like the UK, though, which “This move can be seen as a forced EU-wide
despite leaving the EU is revising its own ETS switch to electromobility,” NGVA Europe’s sec-
system along similar lines, gas is already the big- retary-general, Jens Andersen, commented.
gest source of power and will gain little in market “The elimination of technological competition
share from coal’s further demise. Gas will simply between ecologically equivalent solutions will
become less competitive next to subsidy-sup- lead to new dependencies, be they on resources,
ported renewables. companies, markets and tax subsidies, which
As noted, the EU ETS will also extend to will also be the case for financially weaker EU
maritime emissions. Specifically, it will cover all countries, provided that the subsequent approval
emissions from intra-EU voyages and half from process does not involve any changes.”
extra-EU voyages. Its inclusion will be phased in NGVA Europe argues that the negative
between 2023 and 2025. aspects of electric road transport are overlooked.
Gas will make gains here, as LNG is the For one, how clean an electric car is depends on
only low-emission maritime fuel that has been the power mix of the country it is operating in.
demonstrated as commercially viable. Others An electric car in Poland, for example, would
like hydrogen and ammonia are still at an early source 80% of its power from burning coal. Sec-
stage of development. ondly, the association argues that the EC fails
to consider emissions from the manufacture of
Losses in road transport electric cars, and the cost of establishing new
Road transport and construction, meanwhile, infrastructure for them to operate.
will be governed by a “separate but adjacent” “Neglecting the chance for immediate,
system, due to go live in 2025, with compliance additional CO2 savings through renewable
obligations beginning in 2026. sustainable fuels and the major role that gmo-
“This will avoid any disturbance of the bility can play in this regard will severely curtail
well-functioning emissions trading system for the dynamic deployment of renewable fuels
stationary installations and aviation, given the precisely where the market demands them,”
different reduction potentials in those sectors Andersen said. “NGVA Europe believes that a
and different factors that influence the demand,” mechanism, such as – for example – a voluntary
the EC explained. Uniting the two systems crediting system for sustainable renewable fuels
should be considered “only after a few years,” it [5], can be the necessary solution and is look-
said. ing forward to discussing this proposal with EU
The way that the EC has applied emissions policymakers, the industry, and its members in
trading to road transport has drawn criticism, addition to regional and social partners.” ™

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