Energy groups invited to become net zero champions

Oil and gas companies should lead investments in clean energy technologies rather than wait for government subsidies if they are to survive in a world where net emissions are zero, according to the UK's chief climate adviser.

The fossil fuel industry argues that it can develop technologies such as carbon capture, use and storage (CCUS) and cleaner fuels such as hydrogen to help to fight against global warming. But most projects to develop them are still in their infancy and energy companies say government incentives are needed for their large-scale development.

However, in an interview with the Financial Times, Chris Stark, chief executive officer of the Climate Change Commission – an independent, non-ministerial government agency, rejected the claim.

"One of the most disappointing discussions I hear from time to time, at least in the oil and gas sector, is that they are waiting for the government to put in place the right conditions or put in place the right price for carbon, "he said. "The people who have to support the investment (in CCUS and hydrogen) are the oil and gas sector themselves."

In the UK, CCUS has been under discussion for more than a decade, but no large-scale projects have been developed after the cancellation of two public subsidy schemes, launched in 2007 and 2012. Companies involved in previous projects, such as the large oil company Royal Dutch Shell, abandoned their plans after the subsidies were removed.

A number of oil majors are again supporting CCUS in Britain as the country aims to reduce greenhouse gas emissions to zero by 2050. But developers say the projects will depend on government incentives.

"To support the development of a world class CCUS industry that the UK can export and use to stimulate economic growth, we need government support," said Andy Lane, general manager of the Net Zero project Teesside from 4 to 5 billion pounds sterling which last week was taken over by the energy companies BP, Eni, Equinor, Shell and Total.

Last year, the Department of Business, Energy and Industrial Strategies launched a consultation on possible business models for CCUS and the Conservative general election manifesto last year, pledged £ 800 million to develop the technology. Ministers promised more details in next week's budget.

Mr. Stark questioned the seriousness of the commitments made by the oil and gas sector to develop new technologies that can help reduce emissions if their plans depend on government subsidies.

"If we wait for this to happen, I don't think these are serious commitments. This sector itself will need these technologies to be properly developed if it is to play a role in a net zero society. "It seems to me that we should look to the oil and gas sector to take the lead."

Environmental groups such as Greenpeace have accused oil and gas companies of hiding behind "unproven" technologies such as carbon capture – burying CO2 in depleted oil and gas fields – to simply continue to produce hydrocarbons pollutants and Mr. Stark's appeal will add weight to these claims.

Mr Stark said the risk of oil and gas companies being left with hundreds of billions of dollars of assets frozen as more industries reduce dependence on their products should to be "a significant incentive to get involved in the production of hydrogen and the capture and storage of carbon".

Oil and gas companies have responded to Mr. Stark's arguments by saying that only the first projects would require substantial support and that costs should drop for later initiatives.

A spokesperson for OGUK, a trading body for the British oil and gas industry, said that for CCS to have "every chance of success, proactive and collaborative work with the industry, governments and regulators is necessary so that we can avoid repeating the mistakes of the past. . . and make sure we have a viable framework. "

Stark, a former Scottish government climate adviser, spoke to the FT in Glasgow, his hometown and the location of the crucial United Nations climate talks in November.

Environmental activists hope the summit, known as COP26, will revive global efforts to curb climate change after the last talks in Madrid ended in December. But the UK’s presidency of COP26 had a shaky start when the government fired former event chief Claire O’Neill last month and rumors have emerged about a possible change of venue.

Mr Stark said that the events of the past few weeks had "sent the wrong signal" and that it was "disappointing to see how slow the US (UK) blocks have been".

The UK could still turn the tide, Stark said, but that would require "triple A diplomacy" from British organizers, now led by new secretary of business Alok Sharma.

Mr Stark said a 'really strong' theme from the summit could be the adoption of zero net emissions targets by larger companies, some of which are 'more important than some national (emission reduction) plans "taking into account the global scale of the companies involved. .

He cited a plan by global tech giant Microsoft to be "carbon negative" by 2030 as a "model" for other large companies, but also voiced concerns about offsetting programs companies, which usually involve companies buying carbon credits to fight their own emissions, or planting trees.

"If every business relies on planting trees to offset their emissions, we're not going to make as much progress as we think," said Mr. Stark.