Sector News

African green energy deal edges closer as Europe disentangles from Russian gas reliance

April 16, 2022
Chemical Value Chain

European and African leaders are steadily moving closer to establishing a broad, complex energy deal that will create a fundamental shift in geopolitical relations, says Nj Ayuk, executive chairman of the African Energy Chamber (AEC).

Speaking with PackagingInsights last month, Ayuk claimed the EU could end reliance on Russian energy sources and ensure that the UN’s environmental sustainability goals can be achieved if a large and immediate investment in pipeline gas projects and other African energy resources was made.

After visiting European policymakers and other stakeholders in the past weeks, Ayuk says positive developments are indeed occurring and that it is now inevitable the EU will partner closely with African nations as it moves toward the goal of ending all Russian energy sourcing by 2027.

These steps could have significant impacts for industries like packaging, which has seen turmoil in the EU as inflation and other supply chain disruptions sow division among stakeholders – sparking fears Eastern nations like China will tighten its monopoly on resources and continue Europe’s reliance on environmentally “dirty” production practices.

African energy assurances
While Ayuk previously said an immediate multi-billion dollar investment could solve European energy problems within 15-18 months, the reality now looks to be a longer and more complex procedure, though the AEC is now certain agreements will be reached.

“There has been a shift in attitude, regrettably not what we’ve seen in the past, but now Europeans recognize their security cannot be assured without African energy, just as net-zero targets cannot be assured,” he says.

Ayuk recently met with the European Commission (EC) in Brussels and spoke to German leaders in Berlin about African hydrogen’s role in Europe’s energy transition. Meanwhile, Namibian mines and energy minister Tom Alweendo and German economic affairs and climate action Robert Habeck signed a Joint Declaration of Intent on cooperation in green hydrogen during the Berlin Energy Transition Dialogue.

Frans Timmermans, executive vice president of the EC, will also participate in the AEC’s 2022 African Energy Week in Cape Town this October.

Despite these clear advances toward a deal, Ayuk says, “what was missing was a dollar commitment on how a deal would be done. Goodwill is there, and commitment is there, but we need to close deals.”

Energy taxonomy
The AEC’s meetings in the EU also focused more on the taxonomies of what types of gas can be considered environmentally sustainable and how they can be sourced and transported in line with international goals.

“Rather than just saying all gas is green, many details need to be closed in,” says Ayuk.

The EU’s perspective on what can be considered “green” has been shifting since inflation began rising last year and has expanded even further since the Russian invasion of Ukraine.

At the start of the year, EU officials declared that natural gas (along with nuclear power) could be considered green energy – as long as it emits less than 270 grams of CO2 per kilowatt-hour. So long as policy can give assurances and specifications to industry on how to source more energy, progress can be made, says Ayuk.

“We need fast track, turn-key solutions. It will take about a year or a year and a half. This is a question of risks – why would major companies like Shell put big money into African projects when EU governments might then levy them with heavy taxes?”

Security concerns
Existential questions over the security of energy supplies in key African nations have also been raised in opposition to building a deal. In Mozambique, for example, which has the third-largest gas reserves on earth, armed uprisings by Islamist militants have spread fears that gas projects are untenable long-term.

These fears are overhyped, says Ayuk. “We always knew it was Putin who had nuclear weapons and was crazy – not the guy in the Niger delta who posed no real threat to international security.”

“If you look at the ExxonMobil pipelines in Cameroon, how many attacks have there been? Zero. Boko Haram operate there, but no real attacks occur on pipeline infrastructure because they are deep underground and protected with world-class technologies.”

“People don’t understand how advanced the technology is and go out and make these comments.”

Fuel is the weapon of war
While advances are being made between industry and governments, time is still of the essence. Ayuk stresses that European leaders need to begin seeing energy, and investments in energy infrastructure, as their primary source of military spending.

“The war has continued, more people are dying, and EU leaders are beating their war drums, but we need peace, and we need children back in school. Fuel is the great weapon of war, and money should be put into this instead of spending on arms and weaponry.”

Fortunately, Ayuk and the AEC are now certain a major package of deals between the EU and Africa will be reached. This package will likely be one complex agreement encompassing a range of energy sources like green hydrogen and solar power.

“I do expect action in time. We are going back to Europe next month, and we’re not giving up. Remember, this is not like going to the supermarket – it’s a lot of complex discussions,” says Ayuk.

“Africans have to come to the table with some concrete ideas – this is no time for nationalization or resource socialism – we need market-driven changes, and we need them now.”

By Louis Gore-Langton

Source: www.packaginginsights.com

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