Monday

4th Dec 2023

Gas-price spike will backfire on industry, energy guru says

  • In order to reach the target of 1.5C, investments in clean energy should be tripled, Fatih Birol said.
Listen to article

With prices surging and supply remaining low, the gas industry is showing itself to be an unreliable "partner", the International Energy Agency (IEA) told press in Brussels on Thursday (14 October).

IEA chief Fatih Birol warned the gas industry not to be too happy about the high prices, saying price volatility would prove to "be bad for producers and exporting countries" alike.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Although Birol did not mention producers or exporters by name, Russia has, in recent weeks, been accused of withholding gas in order to force German regulators to give it a monopoly on use of its new 'Nord Stream 2' pipeline, with MEP's calling for an investigation.

The European Commission on Wednesday also said it would investigate possible energy-price manipulation.

"Right now, high energy prices are hurting the population," Birol said, adding that he hoped this would motivate governments to reduce their dependence on gas.

Birol, one of the most influential people in the global energy scene, made the comments at an event in the Belgian foreign ministry's Palais d'Egmont in Brussels, in its 'Hall of Mirrors', filled with diplomats, politicians and policymakers, many of whom will also gather at the UN Conference for Climate Change (COP26) in Glasgow in November.

Birol focused on the IEA's World Energy Outlook 2021 (WEO), which was released a month early to help inform negotiations among climate representatives at what is meant to be the most crucial climate summit in years.

"We have all the data at our fingertips," Birol said, warning his audience that they needed to step up their game.

"If we add up all the national climate commitments, the earth will warm up 2.1 degrees Celsius [by 2100]", he said - a figure much higher than the limit of 1.5 degrees agreed in the landmark 2015 Paris climate accord.

Even if all governments implemented their current pledges, the world will only achieve one-fifth of its targeted emission cuts by 2030, he added.

But there was also good news: Birol expected oil consumption to reach its peak around 2025, which, thanks to the pandemic, was sooner than past projections.

At around €300bn a year, direct investment in CO2-emitting oil and natural gas is on a downward path to a net-zero emissions world in 2050, he noted.

Birol saw the emergence of "a new global energy economy", saying: "Soon the market of clean technology will be bigger than the oil and gas industry, the backbone of our economy. Governments and industry leaders need to invest now if they want a piece of the pie."

But, he warned, there was still a mismatch between commitments and actual investments.

In order to reach the target of 1.5 degrees, investments in clean energy should be tripled, he said, while adding that investments were not flowing in the right direction.

"Most future emissions will come from emerging economies," he said, "but emerging economies receive only 20 percent of global green investment".

While there were positive developments in Europe, the EU was only responsible for a tiny part of global emissions.

"The Chinese steel and cement industry emits more carbon dioxide than all the EU member states combined," Birol noted.

To solve the issue of underinvestment in emerging countries, "Europe will need to focus more of its energies on the international aspect of climate action," he said.

The WEO report also highlighted four areas in which money should be invested: minimising methane emissions, electrification, energy efficiency, and innovation.

The report states that the world will need to grow its annual investment in green energy to close to €3.5tn by 2030, with the majority coming from private investors.

"Governments should present a united front to signal to investors they will lose money if they don't invest in green technology," Birol said.

Bilateral energy deals threaten EU security, IEA says

EU capitals should create a united front in order to beef up their position vis-a-vis major energy suppliers such as Russia, the International Energy Agency has suggested. Meanwhile, Brussels has reiterated the case for the Nabucco energy pipeline.

Timmermans: high energy prices must speed up transition

High energy bills are already affecting businesses and households across the bloc. But only about one-fifth of the price increase can be attributed to the CO2 prices rising, EU's climate chief Frans Timmermans told lawmakers

EU probes possible energy-price manipulation

The EU Commission is investigating possible "manipulative abuses" by Europe's gas suppliers, as part of new measures to help businesses and vulnerable consumers cope with rocketing prices.

Agenda

Energy and gender in EU focus This WEEK

In the European Parliament, the home affairs committee will start to work on new migration laws: providing the legal framework for the new migration policy in the EU.

Gas price spike exposes rift at EU summit

The first topic leaders discussed at the EU summit were the continent's soaring gas prices, which have lead to a spike in household energy bills - amid widespread disagreement on how to solve the issue.

EU calls for end to gas price speculation

The EU has called for an end to energy price speculation, but it is still unclear how far the commission is willing to go to stem market forces.

Analysis

What are the big money debates at COP28 UN climate summit?

The most critical UN climate conference (COP28) ever will run from Thursday to mid-December — with talks on climate commitments and climate finance expected to determine the success of this year's summit.

Latest News

  1. Afghanistan is a 'forever emergency,' says UN head
  2. EU public procurement reform 'ineffective', find auditors
  3. COP28 warned over-relying on carbon capture costs €27 trillion
  4. Optimising Alzheimer's disease health care pathways across Europe
  5. Georgian far-right leader laughs off potential EU sanctions
  6. The EU's U-turn on caged farm animals — explained
  7. EU-China summit and migration files in focus This WEEK
  8. COP28 debates climate finance amid inflated accounting 'mess'

Stakeholders' Highlights

  1. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  2. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  3. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  4. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?
  5. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  6. UNOPSFostering health system resilience in fragile and conflict-affected countries

Stakeholders' Highlights

  1. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  2. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  3. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  4. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  5. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch
  6. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations

Join EUobserver

Support quality EU news

Join us