The conclusion of COP26 last year saw significant progress achieved with more than 80% of the world’s emissions covered by governments’ pledges to achieve net-zero, when the amount of greenhouse gases added to the atmosphere is equal to the amount taken out.
Important agreements were reached regarding deforestation, methane emissions and coal production with at least 23 countries making new commitments to phase out coal power, including in south-east Asia and Europe.
The proverbial cherry on the cake was the final deal struck between 197 nations which involved the drawing down of fossil fuel subsidies, despite a fierce argument that broke out over whether coal should be “phased down” or “phased out”.
But the direction of travel was clear, said COP26 president Alok Sharma. “Countries are turning their back on coal,” he said. “The end of coal is in sight.”
Fast forward four months later, the global focus on renewables has shifted significantly, unfortunately, not in the direction Sharma and other COP negotiators wanted.
Throughout the world, coal use has surged to record levels over the northern hemisphere winter resulting in increased emissions, while clean energy installations fell below the levels needed to reach climate targets.
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This was before Russia decided to implement a “strategic military operation” in Ukraine resulting in a global crisis that forced many nations, especially Europe, to search for alternatives to Russian gas and oil. Due to this, timelines of commitments to cut the use of fossil fuels have to be reconsidered.
The New York Times reported that “Russia is one of the three top oil producers in the world, after the United States and Saudi Arabia. Shortly after Russia invaded Ukraine in late February, traders and European refineries significantly reduced their purchases of Russian oil.”
On 08 March, the United States announced a ban on all Russian oil imports. Economists suggested the move could have small but potentially meaningful economic consequences to the US economy and gas prices reached a new high.
Economist Dieter Helm, professor of energy policy at Oxford University, told the Financial Times that the shift away from fossil fuels has rarely looked more complicated.
“The energy transition was already in trouble with 80 percent of the world’s energy still coming from fossil fuels.”
“I expect that in the short term, the US will increase oil and gas output, and the North Sea may see some further investments.” On top of that, EU coal consumption could increase, Helm added.
European leaders are pushing for an accelerated transition toward renewables in response to the invasion.
“We are determined to limit Putin’s capacity to finance his atrocious war,” Ursula von der Leyen, president of the European Commission, tweeted last weekend. “The EU must get rid of its dependency on fossil fuels.”
A recent research paper in the journal Nature found that G20 countries spent $14 trillion (R224 trillion) on economic stimulus measures during 2020 and 2021, but only 6 percent of these funds were allocated to strategies dedicated to lowering emissions.
Post-pandemic global economic recovery strategies saw a surge in demand for power and thus, in the demand for coal.
Even in countries with ambitious environmental goals such as the United States, coal-fired power generation saw record highs in 2021, and this was under Biden, a president who positioned himself as pro-environment during his election campaigns.
In Europe, coal power rose 18 percent in 2021, its first increase in almost a decade.
War in eastern Europe could push short-term demand for coal even further. As oil and gas prices surge to unprecedented levels, it is cheaper for most countries to burn coal rather than the relatively cleaner natural gas to generate power.
That point was acknowledged last week by Germany’s economy minister Robert Habeck, of the country’s Green party, who said that Europe may be forced to burn more coal in the face of Russian aggression and spiralling gas prices.
South African Market Insights said that the majority of South Africa's crude oil is supplied by three countries, “Saudi Arabia, Nigeria and Angola. These three countries have supplied 89% of South Africa's total crude imports in 2018.”
With global oil and gas prices surging, South Africa will also have to make use of more coal-power generation and may delay investment in gas power generation in the short term.