News
26/10/20
Q&A: IEA's Birol on LPG's role in African clean cooking
London, 20 October (Argus) — Since the IEA's first summit on clean cooking in
Africa in Paris in 2024, governments, development banks, NGOs and the private
sector have stepped up efforts to expand access to modern cooking fuels across
sub-Saharan Africa, where energy poverty remains most acute. LPG is still the
most practical alternative to the harmful fuels used by close to 1bn people in
the region, and the IEA has become one of its most prominent advocates despite
its fossil-fuel status. Argus' Waldemar Jaszczyk spoke with IEA executive
director Fatih Birol in the run-up to Liquid Gas Week in Istanbul this month
about progress so far and the challenges ahead: What key developments have been
made since the first summit in Paris? For almost 25 years, I have tried to raise
this issue. Every year, we publish the World Energy Outlook and highlight how
many people lack access to clean cooking, country by country. After trying to
push it almost alone, I was very happy to see growing interest. Based on my
discussions with different government leaders, we organised the first IEA summit
with great success. We had more than 1,200 delegates and almost 10 heads of
state. Together, we raised pledges worth $2.2bn. At the end of the meeting, I
told government leaders around the world, as well as delegates and the press,
that we would track this $2.2bn. About $740mn of this has now been deployed, or
one-third. We have a list of projects across Africa, that are mainly LPG —
terminals in Kenya and Tanzania, new stove manufacturing in Nigeria and stove
deployment in Senegal. The summit was the first such meeting in history. But
there are two other events that I want to draw attention to. The most recent was
during the UN General Assembly , when a dedicated clean cooking session took
place for the first time. I co-chaired it with Kenyan president [William] Ruto.
We had many ministers, including US energy secretary Chris Wright. The third
event will be in Nairobi in January. I understand there is huge interest from
governments and companies in attending. It will be organised by Kenya, Norway
and the IEA. I have received a lot of support from the World Bank. Its president
Ajay Banga was in New York, and he will also be coming to Kenya. I will also
chair the World Economic Forum in Davos a few days before our second summit in
Nairobi. I am going to include, again for the first time, a session dedicated to
clean cooking and LPG. The World Bank suggested a bold proposal would be
forthcoming in Nairobi. Can you give any more information on it? We are in
discussions with the World Bank on what would be most helpful. Pledges from
governments, the private sector and oil and gas companies are definitely
important. But a well-designed bond scheme from the World Bank would be helpful.
In my view, the small IEA, with its limited means, has spent the past 25 years
raising this key developmental issue in international forums. I think the World
Bank should have done so much earlier, as its key objective is development in
emerging countries. In my view, the World Bank has, until now, failed to address
this issue. So I am very happy that it is now joining forces with us. We are
working very closely with the World Bank, the African Development Bank and
others. We hope to reach an agreement and make an announcement in Nairobi this
year on the bond scheme. Do you think this scheme would be a game-changer for
financing clean cooking? I think it has real potential, but it is still early
days. The key question is how effectively the model can be scaled and translated
into investments on the ground. Our analysis shows that closing the clean
cooking access gap in Africa by 2040 would require around $2bn/yr in up-front
investment. The IEA works with a wide range of companies across Africa that are
helping expand clean cooking access and could benefit from this type of
financing. We are exchanging with the World Bank to help identify the right
partners and ensure that the capital mobilised supports the investments needed
on the ground. What progress has been made in connecting Africa's clean cooking
transition to carbon markets? Carbon markets are already an important part of
the financing model for many clean-cooking developers in Africa. By our
accounting, carbon credits represent one in every eight dollars flowing into
Africa's clean cooking sector. But concerns about the integrity of some projects
and the application of certain methodologies have shaken market confidence, and
contributed to a credits oversupply, putting downward pressure on prices.
Rebuilding trust is therefore essential. There is encouraging work under way,
including the application of the Integrity Council for the Voluntary Carbon
Market's Core Carbon Principles and the development of more robust methodologies
under the Paris Agreement Crediting Mechanism. How has the Iran war impacted
clean cooking transitions to LPG? When people look at prices, they look at the
crude price, but nobody uses crude directly. People use LPG, diesel and other
products. LPG is used mainly in developing countries and by lower-income groups,
so there was a major problem. We are seeing many developing countries face
serious challenges and shortages as prices remain very high. At least 30
significant LPG-consuming countries have less than 15 days of storage left. We
already have an oil security mechanism under which we release stocks when there
is a market disruption. We are now developing a clean cooking security programme
to help countries establish fuel security and emergency response frameworks, and
expand strategic and commercial storage capacity. If I had to identify those
most vulnerable to the effects of this Iran war, I would say LPG users in the
developing world, especially in Africa and Asia. How will the security programme
work in practice? The programme is focused on making clean cooking markets and
supply chains more resilient. In practice, the programme will bring together
governments, companies and civil society to identify and advance priority
actions. These could include strengthening domestic policies, investing in
critical infrastructure and improving international co-ordination to diversify
supply and manage disruptions. The IEA brings significant expertise in energy
security and policy design. We can work with governments to assess their local
energy systems, identify vulnerabilities and develop practical policy approaches
to address them. What role does the LPG industry play in expanding access? Clean
cooking is, in my view, the biggest injustice among global energy issues. It can
also be solved relatively easily, without discovering new technology or
requiring huge investment or financing. When we consider the solutions, which is
the easiest and most cost-effective? Our country-by-country, fuel-by-fuel
analysis shows that LPG is the number one answer. Our analysis also shows that,
among people who gained access to clean cooking in the past 15 years, about
three-quarters did so through LPG and one-quarter through other sources. India
made a major achievement through the PMUY programme. Prime Minister Narendra
Modi once told me that our contribution to this programme helped him win
elections in India, thanks to votes from women whose lives changed when they
gained access to LPG. I therefore see LPG as the primary response to the clean
cooking challenge we face. That is why I thought it would be important for the
IEA and the WLGA to join forces to organise the meeting in Istanbul. I know LPG
has many uses, but focusing on clean cooking has two advantages for business
leaders. First, it is a huge market. Second, it may be good for reputation to be
seen as an enabler in addressing one of the biggest injustices in the world. Are
we still on track to reach universal access in Africa by 2040 in spite of the
current challenges? The crisis has certainly created headwinds and real hardship
for many households. But political momentum behind clean cooking is continuing
to grow, and the number of people gaining access each year is expected to
increase. Unfortunately, progress remains too slow and is concentrated in a
handful of countries that have made clean cooking a priority and attracted the
investment needed. If countries were to accelerate towards the best rates of
progress already demonstrated, Africa could close its clean cooking access gap
by 2040. Universal access is achievable, but it requires a step change in
action. What matters between now and 2030 is laying the foundations to make that
possible. For me, success by 2030 means that governments, the private sector and
civil society are all taking concrete steps to accelerate progress. Through our
summit in January in Nairobi, the IEA is working to bring these actors together,
strengthen commitments and turn growing political momentum into the policies,
investment and action needed to put Africa on a path to universal clean cooking
access. Send comments and request more information at feedback@argusmedia.com
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