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Gas For Climate report

10% binding target for renewable gas and future-proof gas infrastructure crucial to achieve cost efficient decarbonisation

 

  • New study describes gas decarbonisation pathways from 2020 to 2050 and identifies the required investments to scale-up hydrogen and biomethane.
  • Large scale production of biomethane and green and blue hydrogen – transported, stored and distributed through existing gas infrastructure – is important to achieve 55% emission reduction by 2030 in a smart combination with renewable electricity.
  • Coupling the electricity, gas and heat sectors – by linking their markets and their respective infrastructure in a better-coordinated and integrated way – provides the greatest overall benefits for the European energy system.
  • The European Green Deal can accelerate the transition by (i) mandating 10% gas supply from renewable sources by 2030, by (ii) enabling EU-wide trade and transport of biomethane and hydrogen, and by (iii) strengthening the EU ETS.

 

Today, the Gas for Climate consortium published the Gas Decarbonisation Pathway 2020-2050 study by Guidehouse (formerly called Navigant), analysing the transition towards the lowest cost climate neutral system by 2050. Such a fully integrated energy system was described in the Gas for Climate study published in 2019.

This new study highlights that additional EU climate and energy policies are needed to position Europe on the road to net zero by 2050. Its central and aspirational Accelerated Decarbonisation Pathway examines which investments and innovations have to take place in order to achieve a 2030 greenhouse gas reduction target of minus 55%, and climate neutrality by 2050. The European Green Deal can facilitate these developments, which will accelerate emission reductions, create sustainable EU jobs, and create first mover advantages for EU industry by:

  1. Adapting the EU regulatory framework to make gas infrastructure future proof in an integrated energy system. It will be a key asset for the sustainable and cost-efficient decarbonisation of the European economy.
  2. Stimulating the production of biomethane and hydrogen by a binding mandate for 10% gas from renewable sources by 2030.
  3. Fostering cross-border trade and transport of hydrogen and biomethane and clarifying market rules for green and blue hydrogen including for hydrogen transport. A well-functioning Guarantee of Origin system will be crucial in this.
  4. Incentivising demand for hydrogen and biomethane by strengthening and broadening the EU Emissions Trading System (ETS) combined with targeted and time-bound Contracts for Difference.

 

The CEOs of the twelve Gas for Climate members said: In this time of unprecedented public health challenges and economic pressure, climate change mitigation and economic recovery must go hand in hand. In the aftermath of the current health crisis, the required EU and national stimulus packages should also be seen as a three-fold opportunity for Europe. Beyond creating economic growth, stimulus packages can drive forward the energy transition and create sustainable jobs”

"Our new study offers a pathway towards cost-effective and resilient energy system integration. We support the transition to a fully renewable energy system in which biomethane and green hydrogen play a major role in a smart combination with renewable electricity and Europe’s well-developed existing infrastructure. We also recognise that blue hydrogen can accelerate decarbonisation efforts and highlight the ability of biomethane combined with CCS to create negative emissions."

Download Gas Decarbonisation Pathways 2020-2050 at: https://www.gasforclimate2050.eu/publications

 

Notes for Editors

Gas for Climate was initiated in 2017 to analyse and create awareness about the role of renewable and low carbon gas in the future energy system in full compliance with the Paris Agreement target to limit global temperature increase to well below 2 degrees Celsius. To this end, the entire economy has to become (net) zero carbon by mid-century.

The Gas for Climate group consists of ten leading European gas transport companies (Enagás, Energinet, Fluxys Belgium, Gasunie, GRTgaz, ONTRAS, OGE, Snam, Swedegas and Teréga) and two renewable gas industry associations (European Biogas Association and Consorzio Italiano Biogas).

The CEOs of the twelve members are; Piero Gattoni (Consorzio Italiano Biogas), Harm Grobrügge (European Biogas Association), Marcelino Oreja Arburúa (Enagás), Torben Brabo (Energinet), Pascal De Buck (Fluxys), Han Fennema (Gasunie), Thierry Trouvé (GRTgaz), Ralph Bahke (ONTRAS), Jörg Bergmann (Open Grid Europe), Marco Alverà (Snam), Hans Kreisel (Swedegas), Dominique Mockly (Teréga).

 

The Pathways study shows that already in the 2020s, biomethane production can be accelerated by increased investments in production facilities and by thousands of farmers implementing innovative concepts of sustainable agriculture to produce biogas though double cropping and by adopting organic fertilization and precision farming. Also, during the 2020s the first large blue hydrogen projects emerge while a solid business case for green hydrogen develops. Energy renovations of buildings ramp up fast, and hybrid heating solutions are actively propagated towards 100 million hybrid heat pumps by 2050. Heavy industry uses natural reinvestment cycles to convert facilities into net-zero emissions sites using hydrogen and biomethane alongside renewable electricity. Heavy road transport is decarbonised with a rapidly growing role for hydrogen fuel cell and electric trucks, and trucks running on bio-CNG and bio-LNG. Ocean shipping increasingly uses liquefied natural gas (LNG), paving the way for bio-LNG. Aviation starts taking up biokerosene and synthetic kerosene based on green hydrogen. The share of renewables in electricity generation increases from 35% in 2019 to 60%-70% by 2030. Gas-fired power plants will complement this, increasingly running on renewable gases. The future energy system will need a better integration of electricity, heat and low carbon gases and their respective infrastructures. In order to facilitate the transition existing gas grids will be made ready for renewable and low carbon gas, including the creation of a European hydrogen backbone infrastructure largely based on retrofitted existing gas infrastructure. The proposed policy measures support and accelerate these developments.

The current study is a follow-up of a study published in 2019 by Navigant, now Guidehouse. That study analysed the 2050 net zero emissions EU energy system and concluded that using a smart combination of renewable electricity and renewable gas, transported stored and distributed through gas infrastructure, can deliver climate neutrality at the lowest societal cost. A scenario with an optimal quantity of biomethane and hydrogen achieves about €217bn in cost savings each year by 2050 across the EU compared to a ‘minimal gas’ scenario.

Ensuring a smart combination of renewable gas and electricity will be the optimal way to decarbonise the EU energy system, with the system becoming fully renewable. Renewable and low carbon gas, transported in existing grids, provides cost effective solutions for heating of buildings in case of cold spells, delivering high temperature heat and feedstocks in heavy industry, providing high density fuels in heavy transport, as well as enabling dispatchable power for periods with limited variable renewable electricity supply.

Renewable gas is all gas produced from renewable sources. This includes biomethane in the form of upgraded biogas produced by anaerobic digestion of agricultural biomass and organic wastes, biomethane produced from thermal gasification of woody residues, hydrogen produced from renewable electricity, and synthetic methane produced from renewable hydrogen.

 

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10 September 2020 - 14:01 CEST