The EU must classify gas as a “transition fuel” to green energy if it is to reduce coal use and meet its emissions targets, said the chief executive of Czech energy group EP Infrastructure.
The bloc aims to reduce its net greenhouse gas emissions to zero by 2050, and the European Commission is due next month to clarify how it will classify natural gas and nuclear power during the transition to a greener economy.
Gary Mazzotti, managing director of EP Infrastructure, which transports Russian gas to several European markets and is controlled by Czech billionaire Daniel Kretinsky’s EPH, said that for Central Europe the only realistic way to move away from its dependence historic coal was gas.
“The longer you delay giving gas to this transition [status], the more you prolong the use of coal, âhe said in an interview with the Financial Times.
The committee’s classification system will need the approval of a majority of EU states and the European Parliament. Countries like Poland have pushed for gas to be recognized as a transitional fuel while countries like France have demanded that nuclear technology be awarded this label. A group of 150 NGOs urged the commission not to give gas such a label.
However, Mazzotti said for Central Europe there was no alternative to treating gas as a bridging fuel. âUltimately, the French need nuclear to be classified as sustainable, and this part of the region needs gas to be sustainable if you are to achieve carbon neutrality,â he said, adding that the bloc also had to ensure that adequate gas storage facilities and long-term contracts were in place.
The European gas market has been in the spotlight in recent months as prices, which fell last year when the pandemic hit, soared, forcing some energy providers to exit the market and prompting supply concerns this winter.
Mazzotti said the price spike was due to a range of factors, ranging from a rebound in European demand as the pandemic eases, to a drop in European production and a drop in LNG deliveries in from the United States.
Some market players also believe that Russia has contributed to the price spike by limiting additional sales to customers, in a bid to pressure EU regulators to approve its new Nordstream 2 gas pipeline, to which it is fiercely oppose the United States and several countries of central Europe.
Mazzotti said that could be a factor, but that in the medium to long term, high gas prices are not helping consumers or suppliers, and could also slow down the green transition.
“To moo [gas] prices encourage the transition too much [away from coal] too fast. And the high prices that we have now do not encourage any transition and in fact promote the extension of the life of the coal, âhe said.
âSo there is one. . . balance that I would expect to find in the market sometime after the first quarter of next year.