3 Carbon Capture Utilization and Storage
4 Source CO
2
emissions in 2022 IEA
5 IEA APS Scenario
6 TFF Title Transfer Facility natural gas price index
TOWARD A CLEANER AND
MORE RESILIENT SYSTEM?
For the International Energy Agency,
the current crisis can be
“a historic
turning point towards a cleaner and
more secure energy system thanks
to the unprecedented response from
governments around the world.”
This response has three main drivers:
1) ensuring energy security,
2) meeting climate commitments, and
3) developing targeted industrial
policies in developed countries.
For example, under the
Inflation
Reduction Act
(IRA),
the United States
has provided $370 billion in funding
and tax credits to stimulate investment
in energy storage technologies,
nuclear power, clean energy vehicles,
hydrogen and CCUS
(3)
. Previously,
the Infrastructure
Investment and
Jobs Act
passed in 2021 set aside
$110 billion to pay for new
transmission lines.
In Europe, the 2022
REPowerEU
plan is designed to reduce energy
dependence on Russia via energy
savings, green energy production and
diversification of supplies. Member
States have maintained the target of a
40% share of renewable energy in final
consumption by 2030, while confirming
their commitment to accelerate the
procedure to grant permits by creating
“renewables acceleration areas.” The
plan also forecasts annual growth of
35% in biomethane production over the
period 2022-2030 and raises the target
for hydrogen production and imports.
In addition, to bolster the EU’s industrial
policy, and following the example of
the IRA, in February 2023 the European
Commission proposed a targeted and
temporary removal of the ceiling on
State aid for companies, the increased
use of tax credits, the redirection
of European funds, the creation of
a sovereign fund and a new law on
critical raw materials.
A LIMITED RISE IN CO
2
EMISSIONS
CO
2
emissions from energy production
increased by 0.9% in 2022
(4)
due to
electricity production and an upturn
in air traffic. The unprecedented
roll-out of renewable technologies and
electric vehicles (14% of global sales)
has thus helped to limit the rise in
CO
2
emissions, with global renewable
electricity production up by more than
600 TWh in 2022, the largest increase
on record. Nevertheless, according to
the Intergovernmental Panel on Climate
Change (IPCC), global CO
2
emissions
should be reduced by 43% by 2030
to limit global warming to 1.5°C.
NEW CHALLENGES TO BE MET
For a successful transition to a
carbon-neutral world, it is important
to meet the energy system’s need for
flexibility. Changes in demand and the
increased share of renewables in the
energy mix will double by 2030 and
quadruple by 2050
(5)
. Thus, gas-fired
power plants and battery storage
could play an essential balancing role,
complementing demand-side flexibility.
Since the low-carbon energy mix
is much more dependent on critical
minerals, these will come under
pressure. The challenge is thus to
reduce costs by other means, such as
technological innovation, economies of
scale and recycling. This challenge is all
the greater because much of the energy
value chain is concentrated in China.
For this reason, the United States and
the European Union must encourage
industries to establish operations on
their own soil.
Lastly, to address the issue of social
acceptability, the European Union has
put in place a just transition mechanism
as a social pillar of the Green Deal. With
a budget of €55 billion for the period
2021-2027, it aims to mitigate the
socio-economic impact of the transition
on the populations most affected.
2021 European average TTF 2020 European average
REFERENCE GAS SPOT PRICE IN EUROPE
6
IN 2022 MWh
300
150
350
JanApril August FebMay SeptMarch July June OctNovDec
250
200
100
50
0
2023 INTEGRATED REPORT - 09