COP28: Compromise in the Overtime

COP28 evoked in me the same conflicting emotions I experienced during last year's football world championship in Qatar. Despite the numerous criticisms concerning the location and the host, my deepest desire was simply for my country to win! Today, the most important climate change conference (COP28) came to an end. This time it was hosted by the United Arab Emirates, a country that owes its large wealth mainly to the oil & gas industry and the president-designate was Sultan Al Jaber, the CEO of UAE´s national oil company, Adnoc.

The conference took place in the heart of the OPEC, yet the goal of many participants was to encourage the phase-out of fossil fuels. Achieving this goal under these circumstances would have been a historical milestone. After the initial draft of the closing document received heavy criticism for its lack of clarity regarding the phase out of fossil fuels, a final version was released today, after the conference went into overtime, finally mentioning the need to phase down fossil fuels but it still leaves a lot of loopholes. 

Regardless of the location, the president-designate and the political implications, what do we think about the results? Are we going to win this climate change challenge? And how will these pledges affect the process industry in Europe and worldwide? Here are some highlights:

•    From the presidency summary: leaders highlighted the opportunities to cut emissions in every sector and to accelerate the technological innovation to address scope 3 emissions, as well as the phase down of fossil fuels in support of a transition consistent with limiting warming to 1.5°C.
•    Global renewables and energy efficiency pledge: the world requires three times more renewable energy capacity by 2030, or at least 11,000 GW, and must double the global average annual rate of energy efficiency improvements from around 2 to over 4 percent  every year until 2030.
•    Global Methane pledge: transformational national actions and catalytic grant funding to deliver on the goal to cut methane at least 30 percent by 2030.

According to the International Energy Agency (IEA) the pledges received only cover about 30 percent of the emissions gap required to achieve the goal of limiting global warming to 1.5 degrees Celsius, these include the pledge to reduce emissions projected for 2030 related to global renewable and energy efficiency, as well as the global methane pledge

European Initiatives
There is still a long way to go to tackle this challenge, and it needs to be done in collaboration between governments and companies in the industry. On the other hand, the EU is already acting upon this. Following are the revisions of directives that impact the process industry in Europe.

•    Renewable energy directive (2023 revision): double share of renewable energy in Europe from 21.8 percent in 2021 to 42.5 percent in 2030.
•    Energy efficiency directive (2023 revision): The revised directive more than doubles the annual energy savings obligation (Article 8) by 2028.
•    Methane tracking and reduction regulation (to be implemented): The Council and the Parliament today reached a provisional political agreement on a regulation on tracking and reducing methane emissions in the energy sector.
 

So how do these pledges and directives impact in the industry? How are companies acting upon this and what are the challenges that they are facing? This is what we want to explore through our ARC decarbonization report, which will be announced shortly and released in 2024.