Delegation of the European Union to Turkmenistan

Ambassador Diego Ruiz Alonso delivers a statement at the OGT 2021 on 12 May 2021

Ashgabat, 17/05/2021 - 12:16, UNIQUE ID: 210517_5
Speeches of the Ambassador

The COVID19 pandemic has made it clear the need for a change in the way we interact with our environment, the way we live, produce and consume. In this context, the EU considers that recovery from the pandemic should be used as an opportunity to promote the transition to more sustainable economies.

In that sense, the EU adopted at the end of 2019 the European Green Deal, a master plan to fully de-carbonise its economy by 2050. The EU will cut back substantially greenhouse gas emissions through the substitution of fossil fuels, more renewables and a higher degree of energy efficiency. This is a green effort to achieve a sustainable balance between energy production and consumption and to contribute to the global fight against climate change in line with the Paris Agreement.

The EU is already a global green technology leader and will continue to invest massively in climate technologies. The EU’s long-term budget from 2021-2027 represents € 1 trillion. Besides, an unprecedented Next Generation EU Recovery Plan will put 750 billion as a strong stimulus to ensure that our economies undertake these green and digital transitions.

The European decarbonisation objectives mean a technological transformation that offers ample investment opportunities. The EU Taxonomy (taxes and fiscal incentives) has an enormous role to play in attracting capital to these investments. Hydrogen is leading this transformation. Green electricity has to be used in all sectors, including transport, heating or cooling. Green hydrogen will help us to de-carbonise even energy-intensive industries such as steel or cement or long-haul transportation.

The EU adopted the Hydrogen Strategy in July last year. Due to increased competition, prices for electrolysers have already come down substantially. In the transition period the EU plans to rely on blue hydrogen (hydrogen produced using natural gas, with the CO2 emissions generated during the process captured and stored through carbon capture storage technology (CCS).

Once hydrogen is commonly available, the EU will make use of the existing gas network infrastructure to ship it where it is needed most. With the Southern Gas Corridor, the EU has now in place all necessary natural gas infrastructures.

Climate change is a powerful reason for this energy transition; 75% of the greenhouse gas emissions stem from the production, storage, transport and use of energy. Methane is the second most powerful GHG and an important cause of air pollution. Methane emissions globally have continued to rise despite the impact of COVID-19 that reduced economic activity worldwide, this is also true for Turkmenistan. And yes, the EU has a methane strategy as well to share with international partners.

The International Energy Agency reckons that about 70m tonnes of methane were leaked into the atmosphere in 2020, the equivalent to the annual energy-related CO2 emissions of the EU. Natural gas emits about half as much CO2 as coal when it is burnt, but its emissions of methane have 80 times the warming potential of CO2.Those emissions can come from venting or flaring gas at the wells because of a diminished demand or from leaks at pipelines and storage sites.

Reducing emissions from the production, transportation and burning of natural gas is vital to the industry’s future because gas prospects are losing grounds as renewables gather pace. The future of gas industry now depends on eliminating emissions, as buyers will be looking for the natural gas with the lowest emissions.

Natural gas has been considered as the cleanest fossil fuel and a necessary bridge from the coal-powered past to a renewable future. However, the gas industry must invest further on its clean credentials, because the drop in green energy costs and tougher emissions targets are changing the energy market. The EU, but also Japan, South Korea, and the US have pledged to be net carbon-free by 2050 and China by 2060. These countries account for more than half of global natural gas consumption.

Many companies realise methane emissions put their licence to operate and their very business at risk. CCS and other mitigation efforts can help natural gas to maintain demand even as emissions are cut in line with targets in the Paris Agreement. According to analysts that demand would largely come from Asia, Africa and Central and South America, where gas plus CCS could still be the alternative to coal.

Between now and 2050, patterns of energy use will be highly divergent, with some regions progressing to a clean-energy economy and others still relying heavily on fossil fuels. According to latest data, among producing countries, Norway is an example to follow, already reducing its dependence on oil and gas revenue and decarbonizing its economy. On the other side, Nigeria will remain very dependent on the hydrocarbon economy for a while yet. Poorer countries are unlikely to join this transition rapidly and will still rely on fossil fuels as they will, understandably, prioritize economic growth.

Therefore, when talking about this energy transition, we could say that the future is already here, it’s just not evenly distributed. Energy transition won't only cut emissions; it will redistribute power in the world.

During last century geology was destiny. Hydrocarbon distribution gave strategic advantage or disadvantage. However, in the future, geopolitical winners and losers of the energy transition will be determined by the development of new energy supply chains. The EU knows that and is betting on the green future because, as a net energy importer of hydrocarbons, has been paying a very high price. Now is leading this energy transition thanks to its technological, financial and regulatory powers.

Next 40 years will determine the new world order and the EU is ready to cooperate with all international partners in this global transformation. Regarding Turkmenistan, the EU welcomes the law on renewable energy approved by the President of Turkmenistan last December to increase the use of alternative energy sources. This is a step in the right direction. The EU, as the largest source of private investment worldwide, has the potential to make a real difference in TKM in this sector, provided a sound business and investment climate is in place. This is an area where the EU could be a source of policy advice and where EU companies can provide with sound investments and know-how. The EU is ready for future cooperation with Turkmenistan to decarbonise the energy system and to invest in clean and green technologies in post Covid19 recovery.

Turkmenistan has a high potential for solar, wind and geothermic energy (using depleted gas deposits). Bearing that in mind, Turkmenistan is very well place to make this energy transition. Reducing its methane emissions will be a decisive factor for Turkmen gas if it wants to reach Europe during this transitional period.

Recently, I learnt a few things about one of the most successful companies ever: KODAK. People from my generation will admit without problem that, for us, KODAK was synonymous of photography. A brand always present at important occasions of our lives (births, graduations, weddings, first car, new house…). Its ads campaign was simple: "KODAK moment". This all powerful company had its own KODAK moment in 2003, when its board decided that digital photography would be always a marginal thing. A few years later they filed for bankruptcy.

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