COP28 decision leaves gaps for the oil sector – 12/16/2023 – Environment

By deciding that the world must “transition from fossil fuels”, COP28, the UN climate conference concluded last Wednesday (13), took a historic step in negotiations and should guide the review of countries’ climate goals in the next two years. However, the text, also negotiated between major oil producers, leaves loopholes that benefit the oil and gas sector.

“Transition away from fossil fuels, in a fair, orderly and equitable way, accelerating action in this critical decade to achieve net-zero emissions by 2050, keeping close to science”, says the main excerpt of the decision.

According to COP28 negotiators, the phrase could create an illusion that a deadline — the year 2050 — has been set for the fossil fuel sector. However, the concept of zero “net emissions” implies offsetting emissions carried out through activities that capture carbon. These removals occur in other sectors, such as forests, oceans and geotechnology.

Elsewhere, the decision foresees the use of zero-carbon or low-carbon fuels around the middle of the century. However, there is no clear definition of what “low carbon” is, according to observers of the negotiations. An oil industry can claim to be low carbon in relation to a competitor, for example, if its technology emits any lower amount of carbon than the other.

In July, the International Maritime Organization came up with a clearer term than “low carbon” to refer to the energy transition from ship fuels: zero or near-zero emission technologies.

Two other items repeat decisions expressed at COP26, in 2021, without adding details or commitments.

The first is the decision to reduce unabated or offset coal emissions — “abatement”, an English term to refer to emissions abatement, is another example of vague language that gives ample room for the fossil fuel sector to report reduction or emissions compensation, without any common parameters or criteria.

The second is the plan to gradually eliminate “inefficient” subsidies — another adjective that allows free interpretation. Although it was already foreseen at COP26, this guideline gained complements that expand the space to justify its lack of implementation, becoming valid only for subsidies that do not address energy poverty or just transitions.

The decision also legitimizes the controversial CCS geotechnology (“carbon capture and storage”), which has been forcibly included in UN climate panel reports and climate COP negotiations, although it still does not present sufficient studies about your safety. The proposal uses the same expertise and technology as the oil industry — and therefore has its support — to absorb carbon from the atmosphere and store it in deep soil or at the bottom of the sea.

“Accelerate zero- and low-emissions technologies, including but not limited to renewables, nuclear, reduction and removal technologies such as carbon capture and utilization and storage, especially in hard-to-abate sectors, and low-carbon hydrogen,” says the excerpt of the decision, which includes two other controversial topics: nuclear energy and “low-carbon” hydrogen.

Unlike green hydrogen, produced with renewable sources, “low carbon” hydrogen can be produced with fossil fuels, such as gas, with emissions compensation, for example.

Gas is considered a transition fuel for oil-dependent countries, as it has around 20% lower emissions. The COP28 decision dedicates a paragraph to the recognition that “transition fuels can play a role in facilitating the energy transition while ensuring energy security”.

The section is interpreted by observers of the negotiations as a license to open new gas exploration fronts — which goes against the energy transition, threatening the scenario of keeping global warming limited to 1.5°C.

According to the UN climate panel, current fossil fuel exploration already has the potential to emit more than the carbon budget of the 1.5°C scenario would allow.

Despite the loopholes, the assessment of the COP28 decision is quite positive as it is a political signal given to the sector and the countries, which are now responsible for incorporating it into their domestic policies.

“The decision is not flawless and there are complicated loopholes in it, but it is all they [das indústrias de energias fósseis] they didn’t want to”, assesses Natalie Unterstell, president of the Talanoa Institute. “They lost, as the decision was not limited to emissions, which is the usual Saudi line of defense, nor was it limited to one type of fossil fuel”, he concludes.

Mark Lutes, global climate policy advisor at WWF, sees the decision as “an important signal”. “But everything else needs to be defined: rhythms, deadlines and differentiation between countries,” he says.

According to him, actors in the fossil fuel sector can still pretend that the signal was not given and continue with their conventional businesses, while others will accelerate the exploration of fossil fuels. “Now, countries need to position themselves,” he says.

Ana Toni, climate secretary at the Ministry of the Environment, believes that COP28 gives a clear message to investors. “We cannot lose sight of the political message that was given at this COP, recognize the ‘beginning of the end’, recognize that there is no going back, recognize that we will have to accelerate the path of decarbonization and that we have to review the dependence of our economies on fossil fuels”, he says.

For a negotiator interviewed by the report, it is necessary to consider the COP28 decision as a political signal, not as a determination. According to him, if the decisions were deterministic, the price of oil companies would have plummeted on the stock market the day after COP28, which did not happen.