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

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