The European Union (EU) has proposed a plan to label specific natural gas and nuclear projects as ‘green,’ thereby classifying these developments as sustainable investments. Green status will be awarded to projects that replace coal, spurring an increase in clean energy developments and investment, while significantly reducing global emissions.
As the world moves forward with the transition to cleaner sources of fuel, the temporary green label emphasizes the role that gas will play in the energy transition. By ensuring green status is awarded to projects that emit no more than 270 grams of carbon dioxide equivalent per kilowatt-hour, the EU is committed to a clean energy future, while at the same time addressing energy poverty.
According to the EU Executive Arm, “The Commission considers there is a role for natural gas and nuclear as a means to facilitate the transition towards a predominantly renewable-based future.” Specifically, in Africa, as the final frontier for hydrocarbon exploration and rich with natural gas, the EU’s decision holds a number of benefits.
Firstly, with global capital expenditure tightening due to the pandemic, and global investors turning an eye to cleaner investments, the decision marks a critical turning point for the financing of African gas projects. Western nations such as Europe and America have been some of Africa’s top investors, particularly in the energy sector. When investors turned away from hydrocarbons, Africa was left with undeveloped resources. Now, with the implementation of the EU’s decision, African gas can be developed and utilized as investment begins to flow again to lucrative project developments.
Secondly, notwithstanding the climate advantages associated with the decision, by labelling gas projects as green, countries rich in gas will be able to capitalize and monetize their resources, boosting socioeconomic growth and lifting millions out of poverty. With over 600 million people in poverty on the continent, Africa needs to use its gas resources to achieve universal access to energy.
Finally, the decision will not only serve to enhance domestic utilization in Africa, but will enable African gas countries to export resources to international markets. This will be critical for countries in Europe, for example, who, in 2021, grappled with an energy crisis. Enabling investment to African gas projects will not only benefit Africa, but will create critical gas networks worldwide, ensuring the increased utilization of this clean resource and reducing the reliance on coal.
“The MSGBC basin has become a basin that matters in the global oil and gas landscape, even if it is still today a frontier area. We have an enormous potential and we must find the right solutions to use these resources for the development of the country, as we are in an ideal position to export to American and European markets,” stated Chemsdine Sow Deina, Exploration Director at SMHPM at MSGBC Oil, Gas & Power 2021 which took place in December last year.
This decision will be particularly significant for Africa, with gas-rich regions such as the MSGBC basin serving to benefit. The MSGBC region – covering Mauritania, Senegal, the Gambia, Guinea-Bissau and Guinea-Conakry – has been focused on developing its immense gas resources, recognizing the role that gas will play in driving socioeconomic growth and alleviating energy poverty. With the EU’s decision, national objectives regarding the energy transition and alleviating energy poverty can be realized.
The role and value of natural gas represented a key topic at the MSGBC Oil, Gas & Power conference in 2021, organized by Energy Capital & Power, under the patronage of H.E. Macky Sall, President of the Republic of Senegal and in partnership with the Ministry of Petroleum and Energies, COS Petrogaz, Petrosen and various U.S. and Canadian energy industry associations. The conference offered critical insight into how gas can be used as a catalyst for economic growth; the importance of addressing climate change and energy poverty; as well as the region’s biggest gas developments – including the $4.6 billion Greater Tortue Ahmeyim (GTA) Liquefied Natural Gas Project currently being developed collaboratively by Senegal and Mauritania.
“We can say today that GTA is a reality. Despite all challenges, including all posed by COVID-19, thanks to the work developed amongst all the partners, we can today say that the project is moving forward. Moreover, we today are happy that we hold natural gas and not oil, as it fits in the narrative of the energy transition that Senegal and the world are pursuing,” stated Khady D. Ndiaye, Vice President, Senegal Country Manager, Kosmos.
In line with the EU’s decision, the conference emphasized the green nature of gas while promoting the good of gas for Africa. With the second edition of MSGBC Oil, Gas & Power taking place in 2022, discussions on gas and clean energy investments will continue, with global stakeholders and investors being offered the unique chance to directly engage with regional leaders. Events such as this are critical for channeling investment in green gas projects, and as the EU’s decision is implemented, global investors must take advantage of the lucrative opportunities present in Africa.