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Pressure mounts on Cop 28 for fossil fuel phaseout

  • Market: Crude oil, Emissions, Natural gas
  • 06/10/23

Cop 28 president-designate Sultan al-Jaber's decision to put the focus on fossil fuels could lead to tougher policies for the oil sector, writes Caroline Varin

UN Cop 28 president-designate Sultan al-Jaber has done more than any other summit chief before to put fossil fuels at the centre of climate discussions, and pressure is mounting for him to foster a meaningful commitment in Dubai later this year. But an industry agreement on reducing emissions from oil and gas will do little to alleviate that pressure if it ignores end-use — or Scope 3 — greenhouse gas (GHG) emissions, as support for a phase-out of all fossil fuels is strengthening.

There has been a clear shift in focus on fossil fuels ahead of Cop 28 compared with previous summit preparations. "Until this year, we did not have a presidency that was openly talking about the phase out or down of fossil fuels being one of the possible outcomes of Cop 28," civil society organisation Oil Change global policy campaign manager Romain Ioualalen tells Argus.

Al-Jaber, who also heads Abu Dhabi state-owned oil firm Adnoc, made his fossil fuel goals and timeline plain to see is his "vision" for Cop 28 in July. He called for a "responsible phase-down of all fossil fuels, [that] accelerates the phase-down of all unabated coal, and leads to an energy system free of unabated fossil fuels in the middle of this century".

Al-Jaber is also working with the oil and gas industry to get it to commit to "halving oil and gas industry Scope 1 and 2 emissions, including reaching near-zero methane emissions by 2030". This week, speaking at the Adipec energy conference in Abu Dhabi, he suggested progress on that front, saying that 20 oil and gas companies — including international and national oil companies — have answered his call.

But details were limited at most, and international oil company chief executives at the conference did not rush to fill in the gaps, simply welcoming again the opportunity to have a seat at the climate table.

Out of Scope

Looking at al-Jaber's plan, it is clear that Scope 3 emissions are "out of the mix" for this industry commitment, civil society organisation World Resources Institute director David Waskow tells Argus. The focus on Scope 1 and 2 is worrying observers and some parties as they see it as a missed opportunity. It does not address the use of fossil fuels and their climate impact. Oil and gas operations account for nearly 15pc of energy-related GHG emissions, the IEA says, while consumption of oil and gas accounts for another 40pc.

"If you only focus on Scope 1 and 2 emissions from the oil and gas industry, you are not going to get the level of decarbonisation needed to limit warming to 1.5°C," Ioualalen says. "We would be very vigilant that any voluntary commitment from the industry is not seen as a replacement for the need to secure a phase-out of all fossil fuels, because that is not acceptable," he says.

Adnoc does not have a Scope 3 target yet, unlike some of the oil majors. It brought forward its goal to reach net zero carbon emissions from its own activities by five years to 2045. Some observers have said that this could act as a ceiling on ambition.

Some countries supporting a fossil fuel phase-out are also wary of increasing support for abatement technologies, which they fear could get in the way of progress in discussions. Al-Jaber in his plan only talked about carbon capture relating to hard-to-abate industries. But he also told oil and gas companies this week that "it is time to silence the sceptics by applying scale, capital and technology to deliver outcomes", including on renewables, hydrogen and carbon capture and storage.

Oil-producing Arab states support carbon capture technologies that would allow the continued use of fossil fuel resources, which they say will remain crucial to meet energy needs. Adnoc announced last month that it plans to capture 10mn t/yr of CO2 by 2030, up from a previous target of 5mn t/yr.

But parties under the umbrella of the High Ambition Coalition (HAC) — including Chile, Colombia, Senegal, Kenya, Barbados, Denmark, France, Vanuatu and the Marshall Islands — warned that abatement technologies cannot be used "to green-light fossil fuel expansion".

Whether it is to phase out or down — unabated or all — fossil fuels, positions ahead of Cop 28 vary, but support from developing and developed countries for a deadline has been growing ever since India suggested broadening the focus from coal to other fossil fuels at Cop 26 and 27.

The EU wants to see unabated fossil fuels phased out "well before 2050". The US wants to cut the use of "unabated fossil fuels" to achieve "net zero CO2 in energy systems by or around mid-century". Countries under the HAC — 21 in total — call for an urgent phase-out "starting with a rapid decline of fossil fuel production and use within this decade".

Some vulnerable Pacific Island nations have called again for a fossil fuel non-proliferation treaty. And Colombian president Gustavo Petro, whose country recently joined the Beyond Oil and Gas Alliance — a coalition aiming for the managed phase-out of oil and gas output — says that the goal of all countries should be to cut fossil fuel production.

Unprecedented support

"We have never had fossil fuels front and centre on the Cop agenda in this way," Waskow says, adding that the discussion will be firmly anchored in this year's global stocktake (GST) — when countries assess progress towards the Paris climate agreement. The exercise is supposed to yield a roadmap of actions that all parties need to agree on.

A report, which includes parties' views on what could be included in its outcome, suggested countries should consider a phase-out of fossil fuels to help achieve the goals of the Paris Agreement. Some submissions pointed to the need of a "just and equitable phase-out of all fossil fuels".

"We will certainly see it as the first place where the fossil fuel debate comes to the centre stage at Cop 28," Waskow predicts. "In an ideal world, there will be a number of signals, the GST could recognise that we are not on track to limit a temperature rise to 1.5°C and that fossil fuels need to be phased out, and it could then be reflected in the summit's cover decision too," Ioualalen says.

GST negotiations risk stumbling on similar sticking points that held up progress at previous summits, with key countries such as Russia, China and Saudi Arabia unlikely to support new language. In its GST submission, Russia opposes an outcome that "discriminates or calls for phase-out" of fossil fuels. India, which opened the discussion to all fossil fuels, talks about "rational utilisation of fossil fuel resources" and points to developed countries "continuing their profligate investment in fossil fuels". The Arab Group says attention should be paid to equity in sharing of the remaining carbon budget.

The UAE could have a crucial role to play, Waskow says. As Cop 28's host, "oil and gas producer the UAE will be in a challenging position if it wasn't to address this issue, so that is an important piece of the puzzle". The UAE is a prominent member of the Arab Group, which includes Saudi Arabia, Egypt, Qatar, Iraq and Algeria. "It has a different kind of standing with its peers," Waskow says. "There are countries that are dependent on fossil fuels that don't want to commit, but the countries pushing for a phase-out, whether it is the EU or the Pacific countries, are more organised than they were last year in Sharm el-Sheikh," Ioualalen says.

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