New survey of fossil gas companies shows gas industry climate strategies are business as usual

Brussels, 18 May 2022 – There is no doubt that meeting global climate goals will require a rapid transition away from fossil fuels. This task – already a monumental challenge – is complicated by the fact that the fossil gas industry is advancing  false solutions that seem primarily designed to preserve their  business models.

A new market survey from two German NGOs, Deutsche Umwelthilfe (DUH) and urgewald, reveals a shocking lack of knowledge among fossil gas companies about their own methane emissions, and massive inconsistencies in industry climate strategies that rely on pseudo-solutions such as fossil hydrogen to extend fossil gas use.

While all 12 responding companies proclaim a desire to become climate neutral by 2050 at the latest, there is little to no awareness that fossil gas consumption needs to be radically reduced in the short-term, and that the power and heating sectors must shift to clean alternatives. Instead of credible plans to move out of fossil gas, company climate strategies present measures such as carbon capture and storage (CCS) and gradual replacement with green and low-carbon gases as ways to make gas “clean” in the long term. Many are even planning to shift from coal to fossil gas as part of their climate strategies.

The industry is pinning particularly high hopes  on hydrogen, which is a risky bet. Available hydrogen quantities will be too limited for a large-scale use, and using hydrogen for heat and power generation is among the most inefficient uses of the fuel.

Four companies are also actively pursuing fossil hydrogen, such as ‘blue’ or ‘turquoise’ hydrogen, which is linked to the extraction and processing of fossil gas. 1.7 GW of total blue hydrogen capacity is already in the pipeline among surveyed companies. Fossil hydrogen plans are industry’s smokescreen for more fossil fuel use, to the detriment of the planet, climate and people. While turquoise hydrogen is still in the experimental stages and highly expensive, studies show that blue hydrogen produced from fossil fuels may be more climate-damaging than burning coal or fossil gas. The CCS technology associated with blue hydrogen production, which promises to capture fugitive CO2 emissions, is not only expensive and inefficient, but it is also unable to effectively stop methane leaks and requires huge amounts of electricity.

The survey indicates that nine companies have plans to expand their electrolysis capacity, up to 10GW by 2030, but only two companies will focus on 100% renewable-based hydrogen projects. Only green hydrogen produced by the electrolysis of water and using electricity from renewable sources has a real climate benefit. However, its application needs to be limited to priority uses, and not the “blending” projects where small amounts of green hydrogen are injected into existing fossil gas pipelines. Such plans would only maintain operational the fossil gas network.

That very fossil gas network represents a key climate problem. Methane is the main component of fossil gas and a super-potent greenhouse gas (GHG). Methane leakages occur along the entire fossil gas value chain, including during fossil hydrogen production, and the survey shows that companies do not control these emissions effectively. Only four of the surveyed companies were able to provide details on detected methane leaks from their own infrastructure, while leak detection and repair campaigns are conducted at most annually, if at all.

Although climate science is clear about the need to transition away from fossil fuels altogether, only two companies have set a clear timeline for phasing out fossil gas by 2040. Additionally, none of the fossil fuel producing companies surveyed envisages targets to halt extraction activities. This is in clear disagreement with the latest IPCC report on mitigation of climate change, which reminds us that greenhouse gas emissions need to peak before 2025 to limit global warming below 1.5°C.

As the EU is under pressure to cut Russian energy imports, the fossil industry is desperate to keep fossil gas in the future energy mix. Fossil companies distract people by investing in pseudo-solutions, while they leave the door open to fossil gas after 2030 and 2035. This is further encouraged by some Member States, such as Germany, which are ready to implement new projects to transport blue hydrogen and are pursuing massive LNG expansion plans.

It is clearly not enough to rely on voluntary industry commitments to achieve the kinds of pollution reductions that are necessary. Strong government regulations are needed to prevent the global phase-out of coal from leading to the increased use of fossil gas and to ensure that energy companies comply with the Paris climate target rather than undermining it by betting on fig-leaf solutions.

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Contact:

Enrico Donda, [email protected]
Julian Schwartzkopff, [email protected]