Vitaly Yermakov took part in the agenda of 2021 Energy PMP Meeting (08/18/2021)

Vitaly Yermakov, CCEIS expert, took part in the discussion "Transition to Net-Zero focusing on IEA’s recent report Net Zero by 2050", where he presented a report on the topic " Energy transition and Russia's low-carbon adaptation strategy".

Some key take-aways:

• Politicians’ focus on climate action underestimate the difficulty of abandoning hydrocarbons and the benefits they provide to human welfare, especially in developing countries.
• Governments seem intent on picking winners (technology-wise) since letting markets work is viewed as taking too long.’
• The winners include large-scale hydrogen, batteries and CCUS.
• The increase in global emissions will be dominated by China and India where the abandonment of coal power is over the horizon.
• The emissions reduction goals worldwide show a sharp departure from emission trends in the last few decades.
• The models that show how this would change do not make realistic assumptions about lead times for technology development and commercialization and often rely on unrealistic “learning curves” that do not necessarily translate into real-world costs.
• For Russia, the problem is particularly acute with a weak ruble making technology imports expensive and sanctions that further undermine Russia’s economic options.
• Russia’s cold and extreme climate also make experimentation risky.
• Russian gas exports at risk due to EU climate policies but Gazprom is capable of supplying hydrogen produced from natural gas with CCS.
• This will mean a shift of Russian gas exports to Asia where an increase in LNG transport will be necessary.
• But many questions remain unanswered with multiple factors, technology development, government support, use of Arctic sea lanes, etc. all being important.
• For now, reliance on European gas exports remains with the possibility that end-user CCS can achieve emission reductions.
• The various scenarios for the EU’s reduction of natural gas use have important implications for Russia and Russia’s ability to achieve its own climate objectives.