oil and gas

Chamber Hails EU Proposal to Label Natural Gas as Green Energy

January 5, 2022

The African Energy Chamber has hailed the European Union’s landmark proposal to label natural gas as a green energy source.

The group noted that the proposal will help advance Africa’s call for a just and inclusive energy transition.

Recognizing the effects of climate change, the continent industrialize itself first so it can have the same opportunities as Europe and other western countries.

“The point that natural gas serves as a transitional energy source is one that has been promoted by African nations for a long time and therefore, the African Energy Chamber hails the EU’s proposal as a landmark development that justifies a positive outlook for an inclusive energy transition.

“It has taken a crisis in energy availability to bring about policies that could increase Africa’s energy supply. The current pressure from The West to acclimatize to cleaner energy systems has so far been exclusive in recognizing that the transition may differ in form and timing from one region to another.

By restricting investment into energy sources, such as gas, Africa has stood the chance of being left behind during the energy transition, which is counterproductive and regressive,” the group stated.

Speaking on this, Mr NJ Ayuk, Executive Chairman of the African Energy Chamber noted, “We have had our disagreements with our European friends, however, there has always been constructive, behind-the-scenes dialogue with European policymakers. They listened, worked, and let us make the case for Africa’s low-carbon LNG and these discussions have been critical in getting us to see eye-to-eye on gas, a lot of work still needs to be done to make this a reality.

“The demonization of Africa’s gas industry needs to stop, and investments need to come into the sector. While we continue this engagement, it is important that the oil and gas industry focuses its investment on further reducing carbon emissions within the gas value chain.

“Sustainable development and making energy poverty history will require Africa to increase gas within its energy mix, which will give us a fighting chance to reduce the continent’s carbon footprint, even when we are still under 4 per cent of global emissions.”

The Chamber put forth that Africa faces unique challenges and must be allowed to time its own energy transition according to its own needs, adding that the proposal to label natural gas as green energy is what a just energy transition looks like, and now, we need to finance it.

It also called for a collaboration between both continents towards paving the way for a new approach to Africa’s energy industry, one that serves the whole world and all its people as opposed to a privileged few.

Should most EU members back the proposal, then it will become law from 2023, which the African Energy Chamber hopes will stand to help the United States recognize natural gas as a clean fuel, which it, unfortunately, does not under the Biden Administration’s current clean power plans.

“Despite predictions that demand for African LNG is expected to grow for the foreseeable future, investments in gas exploration have been hit hard by a short-sighted bias against our low-carbon natural gas resources. This has led to a reluctance towards investing in supply projects because of the fractured global outlook towards natural gas.

“African nations must be more pragmatic. If exploration and production companies must wait one or two years before their proposed projects are sanctioned, then the prospects for a sustainable African energy future will diminish rapidly. These practices, which help protect the interests of oil-producing nations, made sense when crude sold for $100 per barrel and before the energy transition took centre stage, but they don’t make sense now,” explained Mr Ayuk.

To capitalize on this, the African Green Energy Summit, to be held at African Energy Week this year, will clearly outline initiatives and positions ahead of this year’s COP27.

This new proposal will pave the way for new European investments in natural gas in Africa and will therefore allow Europe to unlock billions of euros in finance and sustainable energy funds to support gas as a transitional energy source.

The EU will want to import whatever natural gas Africa develops, which is constructive for project funding and will open doors to have candid discussions about furthering energy availability across the continent.

Some countries, like Senegal, Mozambique, South Africa, Tanzania, Nigeria, Angola, Ghana, Mauritania, Libya, Cameroon, Algeria, and Equatorial Guinea, have taken steps to monetize their natural resources to develop and industrialize independently.

By using natural gas as a feedstock to create other value-added products, like petrochemicals, from fertilizers to ammonia, revenue can be used to build infrastructure, from pipelines to ports and roadways, it will open the doors to economic diversification for other African countries as well.

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