‘Climate pledges abandoned’ as gas & coal make comeback in Europe – ‘A striking reversal of commitments’
It’s all over
Climate pledges abandoned as Putin sparks global coal crunch
1) Climate pledges abandoned as Putin sparks global coal crunch
The Daily Telegraph, 25 June 2022
2) Coal makes unwelcome return as energy crisis engulfs Germany and Europe
The Sunday Times, 26 June 2022
3) Back to black: Germany pushes for G7 reversal on fossil fuel funding
Bloomberg, 25 June 2022
7) British voters turn on Government and Bank of England over cost of living crisis
The Sunday Telegraph, 26 June 2022
8) Boris Johnson forced to slash Net Zero targets in bid to tackle cost of living crisis
1) Climate pledges abandoned as Putin sparks global coal crunch
It has been a striking reversal of commitments. Just seven months ago world leaders convened in Glasgow and decided to “phase-down” coal, marking a landmark agreement in the push to tackle climate change. Now, officials and power company bosses are grappling with the opposite challenge: where can they get more of it?
Countries from the UK to China and the Netherlands are scrambling for supplies of the fossil fuel to help keep the lights on this winter as Russia’s war on Ukraine tightens the squeeze on global energy markets. For the first time, the prospect of Russian gas to Europe being cut off is being taken seriously.
Yet after years of being told to shut mines in favour of more environmentally friendly energy sources, coal is in short supply globally.
Coal prices in Europe hit an all-time high of $430 (£350) per tonne in May, about four times higher than long term averages. There is little sign of cooling, with Russian imports set to be choked off by sanctions and rival exporters beset by their own challenges.
It offers little relief for households around the world stuck with high household energy bills, as the backsliding towards coal, albeit temporary, exposes further fragilities in the global energy system.
“If you want extra coal, you’re going to have to pay a lot,” says Steve Hulton, coal expert at Rystad Energy. “If you are paying a lot for your coal, and gas is incredibly expensive, then expect power prices to be really high. That’s going to hurt everyone.”
Efforts to push coal to the sidelines have intensified in recent years, with politicians, investors and banks trying to clamp down on coal-fired power stations which account for about 30pc of the energy sector’s emissions.
The UK has pledged to stop using coal in power stations by 2024, while China last year said it would stop funding overseas coal projects. Yet demand has remained stubbornly high: expensive gas prices since last summer, due to shortages, have pushed many to coal.
Global power generation from coal jumped to an all-time high of 10,350 terawatt-hours in 2021, according to the International Energy Agency (IEA), generating about 36pc of global electricity. With supply restricted by the pullback in investment, benchmark Australian thermal coal hit an all-time high of $261.11 on January 28.
Russia’s war on Ukraine has added to the pressure, as traders cope with disruption and brace for loss of supply from one of the world’s biggest coal and gas exporters, due to sanctions or retaliation to them.
Last week state-owned Gazprom restricted gas sent through the Nord Stream 1 pipeline to Germany. It had already cut off supplies to the Netherlands, Denmark, Finland, Poland and Bulgaria after they refused to meet demands to pay in roubles.
Dr Fatih Birol, the IEA’s executive director, warned that Russia was using gas supplies to gain leverage over Europe, and said he wouldn’t rule out a total cut off. Europe “needs contingency plans” for that scenario, he added.
Using coal instead of gas features heavily so far in those contingency plans, with renewable power not yet able to pick up the slack. The UK, Germany, the Netherlands, Austria and Italy are all turning to coal-fired power to help provide supplies this winter.
Kwasi Kwarteng, the UK’s business secretary, wrote to coal plant owners EDF, Uniper and Drax last month urging them to stay open for back-up supply. Coal-fired power generation in Germany is already about 20pc higher year-on-year, according to Rystad Energy. Robert Habeck, Germany’s economy minister, from the Green Party, has described the situation as “bitter”.
Some plants in Europe use a particularly dirty, domestically produced form of coal, called lignite. Others need cleaner, less sulphurous, hard fuel, which has typically been heavily sourced from Russia. Many have continued to tap that source despite the war.
Russian coal exports are at record levels, from 9.8m tonnes in January to 13.6m tonnes in May and are on course for 13.2m tonnes this month. While more is going to China and India, imports into Europe have also been “unusually high” according to one senior industry source. The figures suggest stockpiling ahead of an EU ban on Russian coal imports in August.
They will still need more.
“I don’t think any of the utilities will be comfortable with the stocks they have to get them through the winter,” said the source. The UK is not set to ban Russian imports of coal until the end of the year, but utilities EDF and Drax have ruled out buying from the country. It is understood EDF already secured one order from South Africa last week and is also looking to the US.
Uniper, the German utility which runs a coal-fired power plant in Nottinghamshire, said it had taken steps to make sure its plants could be run without Russian coal and it “plan[ned] to cease the importation of Russian coal to the UK in line with the relevant sanctions.”
Alternative sources are struggling, however. Exports from South Africa, typically one of the largest sources, are being held back by problems getting coal to the key port in Richards Bay. Transnet, the state-owned rail operator, has blamed theft and vandalism on the railway lines.
“We are keen in South Africa to help supply the 40-60m tonnes Europe wants, but we don’t have stocks at Richards Bay and the mines are not producing as much as before,” says Xavier Prevost, senior coal analyst at XMP Coal Consulting in South Africa.
Colombia, meanwhile, has just elected anti-fossil fuel Gustavo Petro as president. The US, which produces higher sulphur coal often blended with Russian by European utilities, also has rail constraints. Authorities in Australia, meanwhile, have invoked powers allowing them to block coal exports if needed amid unprecedented power shortages, which this month forced regulators to suspend the electricity market in the east of the country.
The long-term pressure to move away from coal also means there is limited spare capacity, and investors are unlikely to try and pump cash into alleviating what may only be a short-term demand surge.
“Coal markets have been burned so many times [..] and you’ve still got a very drastic retirement schedule in Europe,” says Natalie Biggs, global head of thermal coal markets research at Wood Mackenzie.
“What’s the purpose of opening new mines and rushing out into the market when that market disappears in the next five years? So they’ll say, ‘thank you for the high margins at the time. But I’m not going to open another mine’.”
Following the record high in May, a 50,000-tonne cargo changed hands at $417.50 per tonne on the European spot market last Wednesday. Experts believe the prices are likely to stay high, with poorer countries less able to compete.
“We’re probably going to see European buyers secure supply, but that inadvertently shifts the supply shortage pain to the Asian market,” adds Biggs.
China and India are trying to bolster domestic production to cut reliance on imports. The IEA expects them to drive a 10pc increase in global investment in coal supply chains this year, to around $115bn.
Power plants in Europe, meanwhile, could end up having to run on lower quality coal, meaning less efficient production and potentially higher levels of sulphurous pollutants.
“One of the things that may help Europe a little bit is if the governments potentially relaxed some of their emission limits,” says Hulton, at Rystad Energy. Cop26 feels a long way away.
2) Coal makes unwelcome return as energy crisis engulfs Germany and Europe
The Sunday Times, 26 June 2022
War has unforeseen consequences. And so it proved last week, when Germany’s politicians did a screeching U-turn on environmental policy and ordered coal power plants to fire up in the face of soaring gas prices stoked by Russia’s invasion of Ukraine.
“From now on, gas is a scarce commodity,” said economy minister Robert Habeck, a member of the Green Party that is now part of Germany’s coalition government. He added that there were “no taboos” in the hunt for energy security, suggesting Germany’s phase-out of coal by 2030 could be delayed. Ministers have even floated the idea that Germany’s dwindling fleet of nuclear power stations could be kept online beyond their shut-off this year — an idea long considered verboten in a country that, under former chancellor Angela Merkel, shunned atomic energy after the Fukushima disaster in Japan in 2011.
Coal’s comeback is a bitter moment for a country where environmental concerns dominated much of the election debate last year, in the wake of deadly floods that hit western Germany last summer. The question for politicians is just how temporary coal’s resurgence will be — European Commission president Ursula von der Leyen, herself a veteran of German politics, last week warned against “backsliding” into “dirty fossil fuels”.
Her plea is in danger of falling on deaf ears, as Germany is not alone in its new embrace of the black stuff. Last week the Dutch government, led by Mark Rutte, scrapped limits on power production from coal-fired plants until 2024. And last weekend, Karl Nehammer’s government in Austria ordered a reserve gas plant to switch to burning coal; the Mellach station was mothballed just two years ago, when Austria became the second country in Europe after Belgium to go coal-free.
In the UK, business secretary Kwasi Kwarteng ordered the Electricity System Operator (ESO), the manager of the grid, to open talks with the owners of three coal plants — EDF, Drax and Uniper — to “bolster” energy security this winter.
Yet supply challenges are building in coal that could make this emergency measure a very costly foray — politically, environmentally and financially. For how long will Old King Coal regain his throne?
Though not a direct importer of Russian gas, the UK has, like everywhere else, been exposed to European prices going haywire since the invasion of Ukraine. The timing is especially bad, since Britain considers gas a “transition fuel” to help pave the way for a net-zero economy, as it is greener than burning coal. But if gas is suddenly too expensive, coal moves up the pecking order.
“That the government is having to consider using coal to keep the lights on this winter is a sign of its failure to deploy an effective renewable energy strategy,” said Tony Bosworth at Friends of the Earth. He notes that the installation of onshore and offshore wind capacity has slowed since 2017, according to the government’s own statistics. “Coal was a vitally important part of the UK’s past, but its place is now in the history books.”
Following Kwarteng’s intervention, EDF agreed to delay the closure of its West Burton A coal plant in Nottinghamshire by six months, to March 2023, to provide “emergency” power. Talks with the other suppliers are ongoing. It is a measure of the severity of the situation that the ESO has never before had to seek “top up” agreements beyond the regular deals it strikes with power companies to ensure the system has enough juice.
Michael Grubb, professor of energy and climate change at University College London, said Kwarteng was right to act as he did: “If one of your major bridging technologies for energy security is natural gas and all hell’s broken loose, it makes sense to fall back on something else.”
Coal has sunk in the last decade to make up just a tiny fraction of power generation. Kwarteng has insisted the firing up of plants this winter will not delay the planned shutdown of all coal generation by September 2024. But Grubb suggested this deadline was likely to slip. “I think the UK does, by implication, have to change its phase-out date for coal, and probably wants to make it conditional upon how long this crisis lasts,” he said.
The waters were muddied further last week by the prime minister’s unexpected backing for more coal production in the UK. Boris Johnson responded to a question from a Tory MP by saying: “It makes no sense to be importing coal, particularly for metallurgical purposes, when we have our own domestic resources.”
He was referring to “coking” coal, used in furnaces to make steel, as distinct from the thermal coal burned in power stations. His comments were interpreted as support for a new mine in Cumbria that will supply coking coal to the UK and Europe. A final decision by communities secretary Michael Gove is expected soon.
Mike Starkie, mayor of the Cumbrian borough of Copeland, where the proposed Woodhouse colliery will be based, said it would give “a shot in the arm to the local economy”. But Friends of the Earth’s Bosworth said new coal supply would not help the steel industry reduce its emissions. “EU steelmakers … are already moving away from coal, prompted in part by the demands of car companies for greener steel,” he said. “The market for the mine’s coal is declining before it even opens.”
In contrast to the UK, Germany’s energy crisis is more tied to the war. Under Merkel, it became reliant on Russian gas as it sought to drive its energy transition to renewables. Natural gas now makes up about 15 per cent of power generation in Germany, of which one third was imported from Russia at the end of 2021.
By the start of this year, renewable energy made up about 45 per cent of German electricity, but coal still has a high share. Along with lignite — its particularly dirty cousin — it comprised 30 per cent of generation in the first quarter of this year, though this is down from about half a decade ago. Nuclear has sunk to just under 5 per cent, said the Federal Association of Energy and Water Industries.
Some say the phase-out of nuclear, championed by Merkel, happened before there was enough renewable energy to take its place. “In recent years there has been too little investment in renewables,” said Thorsten Lenck at the Agora Energiewende think tank in Berlin. “And that’s not because there are no investors. It’s because there was not enough surface area dedicated for wind power, too long planning and approval procedures, and insufficient targets … We need to go further and faster.”
Last week, the head of the International Energy Agency (IEA) warned Europe it should prepare for Russia to shut off the flow of gas altogether. Surely, then, Germany’s vulnerabilities in energy stem from failures of policy in Merkel’s 16-year reign? “I think almost nobody in Germany had the feeling the dependency [on Russia] would lead to this,” said Manfred Fischedick of the Wuppertal Institute, noting that Russian oil and gas flowed even in the Cold War. “With hindsight it is absolutely fair to say that this assessment was a big mistake. But it was not only the mistake of Merkel but also of all the parties that have been in power in the last two decades.”
As Europe scrambles to prepare for winter, the clock is ticking. The EU has vowed to end imports of Russian coal from August 10; prior to the war, they made up about half of European supply. From the end of the year, the EU will stop receiving Russian oil by sea. Longer term, it wants to phase out Russian gas.
The ripple effect is being seen in commodity markets. Coal prices have more than doubled in a year, to nearly $400 a tonne, as demand surges. Even before the Ukraine war, they were climbing as countries reopened after lockdowns.
The IEA said last week there was likely to be a 10 per cent rise in investment in coal supply this year to meet demand, driven mostly by China and India. Elsewhere, few new coal mines are being sanctioned, as investors seek green alternatives. Supply cannot keep up with demand, according to one senior coal trader: “I would say there is no spare capacity in the system whatsoever. Everyone’s running as hard as they can.”
He suggested coal could surge above $600 a tonne and still be cheaper than the liquid natural gas (LNG) that countries are buying to replace Russian gas.
Europe is turning to the US and Colombia to top up coal supplies. This is driving prices higher, leaving traditional buyers in the dark. Blackouts have recently struck countries such as Sri Lanka, Pakistan and Australia.
The situation offers a silver lining for those still trading in coal. Among them is the FTSE 100 giant Glencore, which this month said profits from its coal business and its commodity trading arm would smash expectations. Fellow miner BHP recently decided to hold on to a thermal coal mine in Australia that it had been looking to sell; instead, it will wind down the mine by 2030 — and most likely bank healthy profits in the process.
For some investors, owning a coal miner is only acceptable if the company has plans to phase out the fuel over time and pay for any clean-up; the argument goes that cutting off supply to developing nations still reliant on coal will do nothing to help people or the energy transition. Stephanie Maier, head of sustainable investment at asset manager GAM, said: “Removing coal from portfolios does not eliminate the emissions … We see engagement as critical in supporting energy companies transition away from coal.”
Others simply want out. “We listened to our investors early and could see the way it was going,” said the boss of one mining company that sold its coal assets.
Most seem to believe the sudden revival of coal is only a temporary, if damaging, setback. “We thought Europe’s exit from coal was a five to ten-year story,” said Tom Price at investment bank Liberum. “It’s probably now a ten to 15-year story. But the reality is, it’s not a fuel we should keep using on our planet. We’ve got to clean up our act.”
3) Back to black: Germany pushes for G7 reversal on fossil fuel funding
Bloomberg, 25 June 2022
Germany is pushing for Group of Seven nations to walk back a commitment that would halt the financing of overseas fossil fuel projects by the end of the year, according to people familiar with the matter. That would be a major reversal on tackling climate change as Russia’s war in Ukraine upends access to energy supplies.
A draft text shared with Bloomberg would see the G-7 “acknowledge that publicly supported investment in the gas sector is necessary as a temporary response to the current energy crisis.”
The caveat in the proposal is that such funding is done “in a manner consistent with our climate objectives and without creating lock-in effects.”
The text remains under debate and could change before G-7 leaders hold their summit in the Bavarian Alps starting Sunday hosted by Chancellor Olaf Scholz. The UK opposes the proposal, two of the people said. A German government spokesman declined to comment.
A person familiar with the discussions said Italy wasn’t actively opposing the German proposal. Italy, like Germany, is highly dependent on Russian gas. On Friday, speaking during a press conference in Brussels, Prime Minister Mario Draghi said Italy has managed to reduce Russian gas imports from 40% last year to 25% at the moment. This has been possible also by signing new gas deals in countries including Congo, Algeria and Angola.
A government spokesperson said Italy did not support Germany’s idea.
Asked about the proposal on Air Force One as US President Joe Biden flew to Europe, National Security Council spokesman John Kirby said he did not want to preempt discussions at the summit. “Our position last May was that the president was clear that he did not feel like these investments were the right course of action,” he told reporters. “I know of no such change to that policy.”
Canada, the world’s sixth largest energy producer, has shown it’s willing to support new fossil fuel infrastructure if it fits within the country’s overall emissions reduction plan, a senior official said. But the official would not say if Canada supports the language in the German proposal, stressing it’s a preliminary document.
The debate comes as Europe in particular struggles for alternative sources of fuel to Russian gas. The German government has warned that Russia’s moves to limit supply risk a Lehman-like collapse in the energy markets, with Europe’s largest economy facing the unprecedented prospect of businesses and consumers running out of power.
Germany has responded to the cuts by reviving coal plants and providing financing to secure gas supplies, while continuing with plans to phase out nuclear energy. The World Nuclear Association, an industry lobby group, is urging the G-7 to boost access to nuclear technologies.
Italy has said it will monitor the potential need to trigger emergency energy plans. Any such move could also see it boost coal production.
A G-7 shift from a commitment initiated last year and firmed up in May would be a u-turn in global efforts to fight climate change. It would make it harder to rally the rest of the world around more stringent targets and direct investments toward cleaner sources of energy.
It would also go against International Energy Agency advice that no new oil and gas projects should be developed if the world is to limit global warming to 1.5 degrees Celsius.
G-7 ministers, in making their commitment to end direct international financing of fossil fuels by the end of 2022, acknowledged for the first time that fossil fuel subsidies were incompatible with the Paris Agreement. The group also reaffirmed a commitment to end “inefficient” fossil fuel subsidies by 2025.
The ministers acknowledged, however, that investment in the LNG sector was a necessary response to the current crisis “in a manner consistent with our climate objectives and without creating lock-in effects.”
“This would be a huge setback from the progress we made last month at the G-7 energy and environment ministers when we finally brought Japan, the last G-7 holdout, into the commitment to end such financial support for fossil fuels,” said Alden Meyer, a senior associate at climate change think E3G.
“Where we saw Chancellor Merkel being the climate chancellor at the last G-7 summit Germany hosted, Scholz could go down in history as the climate backtracking Chancellor, which I think would be a real mark on his record, and we don’t need to do this,” he added.
EurActiv, 24 June 2022EU countries are seeking changes to a raft of new and revised climate policies, raising concerns that they could be weakened and the EU could miss its 2030 emissions reduction target.EU countries and the European Parliament are currently negotiating a huge overhaul of the carbon market and laws on energy, transport and forestry, with the aim to bring them in line with the 2030 target to cut net greenhouse gas emissions by 55% based on 1990 levels.Agreeing on climate measures is an oft-fraught task for the 27 EU countries, whose reliance on fossil fuels and appetite for rapid emissions cuts varies.
Divisions over the policies have intensified as governments negotiate them amid soaring inflation and energy costs.
Draft proposals for EU countries’ positions on the laws, seen by Reuters, show moves to weaken parts of the climate package proposed by the European Commission last summer.
Climate ministers from ten EU countries have called on their fellow countries and the European Parliament not to lower the ambition of new climate legislation and to ensure that the overall package aims at reducing net emissions by at least 55% by 2030.
For instance, a draft proposal on carbon market reforms would delay the launch of a new market for buildings and transport by a year. Meanwhile, there are moves to lower the ambitions of the energy efficiency directive by demoting one of the binding targets to an indicative target.
Countries are also considering weakening the target for how much of industry’s hydrogen use should be renewable from 50% to 40% by 2030.
Meanwhile, a binding obligation for fuel suppliers to reach a 2.6% share of renewable fuels for transport by 2030 could become voluntary, diplomats said.
“In all the different files, ambition is watered down. There’s not one file where ambition increased or stayed the same,” one diplomat said.
Some diplomats also raised concerns that a proposal to end new fossil fuel car sales in 2035 could be derailed, after Germany’s finance minister said that Berlin would not support it earlier this week.
The draft agreements could still change before EU ministers agree on their position next week. After they have reached an agreement, they will enter into negotiations with the European Parliament.
Multiple nations want changes to the proposals, as commitments to protect the planet collide with the demands of other national interests and industries.
Spain sought to curb an energy savings goal, while Hungary, Bulgaria and Poland were among those seeking weaker renewables targets for transport, diplomats said.
5) Europe’s search for natural gas runs up against climate goals
The Wall Street Journal, 25 June 2022
Europe’s scramble to replace Russian natural gas has set in motion plans for new gas production and infrastructure world-wide that critics say risk throwing the world off track in meeting the Paris accord’s climate targets.
In the wake of Russia’s invasion of Ukraine, Europe is moving quickly to set up new import terminals for liquefied natural gas from elsewhere. U.S. producers are expanding their export facilities as Europe’s thirst for gas adds to already-strong Asian demand. Such infrastructure can take years to build and is usually predicated on lifespans lasting decades. European utilities, meanwhile, are negotiating long-term supply deals with gas exporters in the U.S., the Middle East and Africa.
Both moves threaten to lock Europe into a new dependency on non-Russian gas at a time when the West has promised to start pivoting from hydrocarbons to cut emissions of carbon dioxide and other gases that scientists say are causing the earth to warm.
“This push for gas is much, much bigger than replacing Russian gas,” said Bill Hare, chief executive of Climate Analytics, a nonpartisan climate-science group. “That risks a lock-in of very high levels of carbon dioxide emissions.”
Democratic members of Congress including Senators Bernie Sanders (I., Vt.) and Elizabeth Warren (D., Mass.) and lawmakers from the European Parliament wrote in a joint letter last month that “further expansion of fossil fuel infrastructure in the United States and Europe is destined to set us back during a moment when we should be doing everything within our power to avert climate catastrophe.”
For many capitals, the urgent need to find enough supplies to replace Russian gas is outweighing longer-term goals to slash emissions. Gas from Russia, Europe’s biggest supplier, heats homes and powers factories across the continent.
European officials have emphasized gas as a transitional fuel: not ideal, but better than higher-emitting fuels such as coal. Burning natural gas produces around half the carbon dioxide of coal. The European Union is aiming to cut greenhouse gas emissions by around 14% by 2030 compared with 2020 by massively expanding wind and solar power and using energy more efficiently.
Germany, Italy, the Netherlands and Austria have all said they are now preparing to burn more coal in the next few years after Russia throttled gas supplies to the continent last week. And Europe is doubling down on gas from other parts of the world.
Plans for more than 20 liquefied natural gas import projects have been announced, relaunched or sped up across Europe since Russia invaded Ukraine, according to a recent analysis by FTI Consulting. Analysts said those projects have the potential to contribute an additional 128 billion cubic meters in natural-gas import capacity over the coming years, roughly the equivalent of 83% of the EU’s total 2021 imports from Russia.
Germany, which didn’t have any LNG import terminals before the war in Ukraine began, is taking some of the most aggressive steps to develop new infrastructure. The German government recently passed legislation to fast-track LNG developments, and pledged 2.94 billion euros, equivalent to about $3.09 billion, to put several floating terminals into operation.
The French utility Engie SA in May announced a 15-year contract to buy LNG from an export facility under construction in Brownsville, Texas. That came a year-and-a-half after the company pulled out of talks to buy gas from the project under pressure from environmentalists and the French government. It also recently struck a deal with Cheniere Energy Inc. for increased gas deliveries that would continue beyond 2040. A separate 15-year deal between Cheniere and Norway’s Equinor ASA was announced earlier this month, with deliveries to begin in 2026.
European officials and industry executives say that new LNG import terminals and other gas infrastructure can eventually be converted to handle hydrogen, a clean-burning fuel that can be produced using renewable energy. That, backers say, means building the infrastructure now doesn’t necessarily lock the continent into using more gas for years to come.
“We are firm believers that natural gas and LNG, done the right way, is an enabling partner to renewables,” said Anatol Feygin, chief commercial officer of Cheniere, which owns LNG export facilities in Texas and Louisiana. “We think that’ll be the case for decades to come.”
European officials are also fanning out to ask for gas from countries with untapped reserves. Critics say that could encourage production that might otherwise never get developed.
German Chancellor Olaf Scholz traveled to Senegal in May and said his government was interested in helping the West African nation develop its offshore natural gas reserves. Italian officials have signed deals with Angola and Congo to boost gas supplies. The EU announced plans to work with Israel and Egypt to increase exports of natural gas to the bloc.
Climate scientists warn that the world has little leeway to produce and burn more gas while at the same time complying with the Paris accord. Most of the world’s countries have agreed to the deal, which calls for governments to collectively reduce emissions to levels that scientists hope will limit warming to close to 1.5 degrees Celsius. The latest United Nations climate-science report estimates that global gas use in electricity and heating should fall 10% by 2030 compared with 2020 and 45% by 2050 to meet the 1.5-degree target.
LNG poses a double challenge. It is natural gas that has been supercooled so it can be transported as a liquid across long distances. It is turned back into a gas after it arrives at LNG import facilities. Tankers that transport it can be big emitters of methane—a powerful greenhouse gas—adding to overall emissions related to the fuel.
The Wall Street Journal, 24 June 202In Germany even the energy emergencies are well-organized. So it is that Berlin Thursday moved into the second of three phases in what is meant to be an orderly procedure for managing fuel shortages this winter. They hope.Economy and Climate Minister Robert Habeck raised the alert level amid a reduction in natural gas shipments from Russia. Moscow says a mechanical part is stranded in Canada due to Western sanctions imposed after Vladimir Putin’s Ukraine invasion, but everyone else knows better.Germany is vulnerable because for years it pursued energy policies that left the economy dependent on Russia for 55% of its natural-gas imports, 34% of its oil, and 26% of its coal before the Ukraine war. These three fuels combined account for more than 75% of Germany’s energy consumption, and Russian natural gas is by far the hardest to replace.
Mr. Habeck is bringing coal-fired power plants back online so that natural gas can be diverted to industrial users and the winter stockpile. This is politically embarrassing for the minister, who hails from the environmentalist Green Party. It’s also only partly effective against Germany’s energy woes.
Coal works for electricity generation, but Germany uses most of its natural gas for other things. Gas-fired community heating systems can’t easily be converted to coal. Manufacturers in industries such as steel and chemicals worry their equipment will be destroyed if they lose gas supply even for a short period. Gas rationing is part of Berlin’s emergency plan, but prioritizing among competing users is proving to be an imponderable.
Mr. Habeck has made some progress lining up alternative gas supplies. A new law streamlines regulation for three new terminals to import liquefied natural gas. For this winter Mr. Habeck plans to rent floating terminals. Yet someone also must build pipelines to carry gas from those terminals to the national grid, and Germany needs to line up LNG suppliers.
That leaves storage. Berlin is stockpiling gas after its negligence last year left storage facilities barely more than 70% full at the start of the cold season. As of this week, Germany’s storage is filled to almost 60% of its capacity compared to less than 40% at this time last year, and the government hopes to reach 90% in the next three months. But this will be harder if Russian supplies are interrupted.
There is always another way: nuclear. Nuclear supplies 6% of Germany’s electricity. That proportion is down from 12% last year because in late 2021 Berlin shut down another three reactors, leaving only three online. The nuclear phase-out imposed by former Chancellor Angela Merkel in 2011 counts as one of the worst energy-security mistakes of all time. But for now, keeping the three remaining reactors running past their planned closure at the end of this year could reduce the power gap that needs to be filled by imported coal.
Yet Chancellor Olaf Scholz and Mr. Habeck are resisting. Nuclear power is politically controversial in Germany, especially among the granola-niks in the Green Party. Some politicians are brave enough to call for an extension of nuclear power, notably Finance Minister Christian Lindner of the Free Democratic Party and state premier of Bavaria Markus Söder of the conservative CSU.
Mr. Habeck still seems to believe he can burn only a little more coal and Germany will arrive at a renewable nirvana when wind and solar meet the country’s power needs. The same Mr. Habeck declared immediately after the Ukraine invasion that there would be “no taboos” in Germany’s debate about energy security. Apparently there still is one, however, and it could prove costly for Europe’s largest economy.
7) Voters turn on Government and Bank of England over cost of living crisis
The Sunday Telegraph, 26 June 2022
Poll findings will fuel concerns among Tory MPs that party is on course to face huge backlash over handling of economy
Voters are turning on the Government and Bank of England over the cost of living crisis, with almost one in three saying excessive public spending is “significantly” to blame for high inflation, according to a poll.
A survey of 1,500 people for The Telegraph found that 29 per cent believed soaring levels of government spending were more to blame for rising inflation than disruption arising from Russia’s invasion of Ukraine and supply chain problems caused by the Covid pandemic.
The findings will fuel concerns among Tory MPs that the party is on course to face a seismic backlash over its handling of the economy as Boris Johnson and Rishi Sunak face down demands for tax cuts.
Responding to the poll, one senior Conservative – who has not spoken publicly against Mr Johnson – said: “F—. That is bad.” The MP had previously believed that “the cost of living stuff hasn’t really hit the public yet”.
Ministers have acknowledged that the crisis was a major concern for voters in Tiverton and Honiton and in Wakefield, the seats lost by the Conservatives in by-elections last week.
Lord Frost, a former Cabinet minister, warned that the Government has adopted a high spend, high tax model and called for a “more Conservative” approach.
On Saturday, Mr Johnson said: “I’m focused on what we can do to sort out the cost of living, sort out growth, get this country more productive.”
On Friday, Mr Sunak insisted he was “determined to continue working to tackle the cost of living”, including delivering existing plans to lift the threshold at which people start paying National Insurance.
In the poll, conducted by Redfield and Wilton Strategies, 59 per cent of people said they disapproved of Mr Johnson’s performance on the economy – up almost 20 percentage points from an equivalent survey seven months ago.
Overall, 54 per cent of people said the Prime Minister should resign – up from 46 per cent in March.
Mr Johnson’s handling of the invasion of Ukraine was the only policy area in which more people approved of his performance than disapproved of it. But 63 per cent said his response had not changed their view of him.
Meanwhile, 49 per cent said the Bank of England was not doing all it could to bring down inflation, compared to 16 per cent who said it was.
Daily Mail, 24 June 2022Boris Johnson has slashed his net-zero targets in a bid to tackle the cost of living crunch – by reducing the amount of biofuel produced in the UK.The Prime Minister has hit the brakes in the push for green fuel, citing concerns that the drive may contribute to spiralling inflation.Biofuel requires wheat and maize – land that Mr Johnson believes could be better used for food production to combat soaring prices. Land used globally to grow crops for the UK biofuel market could feed 3.5 million people if it was converted to food production.
The PM will call on G7 leaders to review their biofuel use, arguing that it could help mitigate the global food crisis and supply chain issues exacerbated by Russia’s invasion of Ukraine.
Mr Johnson said: ‘While Vladimir Putin continues his futile and unprovoked war in Ukraine and cravenly blockades millions of tonnes of grain, the world’s poorest people are inching closer to starvation.
He added: ‘From emergency food aid to reviewing our own biofuel use, the UK is playing its part to address this pernicious global crisis.’
The push for green fuel was one of the key pillars of the government’s net zero ambitions but now it is set to push for the amount of biofuel used globally to be cut by 10 per cent at Sunday’s G7 summit.