Publication on www.duurzaam-ondernemen.nl, 13 August 2024
The piece is translated to English by using ChatGPT.
A report written by Publieke Zaken and QuO Mare claims that a fossil-free Netherlands by 2050 will cost more than a CO2-neutral Netherlands, as reported by the portal duurzaam-ondernemen.nl last Wednesday. “Fossil-free” means no use of coal, oil, and gas, while “CO2-neutral” refers to capturing and storing CO2 emissions from continued oil and gas use and “blue” hydrogen production with CCS (carbon capture and storage). The reliance on a technology that has long been promoted by the industry as an affordable climate solution, but consistently proves to be more costly than expected [1], is risky. Capturing emissions instead of avoiding them is inefficient; it’s like mopping the floor while the tap is still running.
Political agenda
This report appears to have been written with a political agenda, with statements such as “the additional costs [of the energy transition for businesses] will be passed on as much as possible, indirectly affecting the consumer, i.e., the citizen or voter.” Publieke Zaken describes itself on its website as follows: “Publieke Zaken ensures that you can consult with the government, political players, or other societal organizations when regulations have a crucial impact on the continuity of your business.” [2] The other organization, QuO Mare, states that it helps the oil industry optimize the blending of crude oil. [3]
Assumptions in favour of the CO2-neutral scenario
The authors use a proprietary model from QuO Mare, with assumptions favoring the CO2-neutral scenario. For example: “Cost reductions from new technologies through technological development and economies of scale are not included in the model. For instance, the CAPEX costs of electrolyzers [used for green hydrogen] are assumed to be constant.” At the same time, it is assumed that the price of CO2 in the EU emissions trading system will rise—a sufficiently high CO2 price is necessary before CCS becomes commercially viable. In 2017, a pilot CCS project, ROAD, failed due to low CO2 prices. [4, 5]
Another assumption is that by storing CO2, all greenhouse gas emissions are avoided. However, during the extraction and transportation of gas and oil, greenhouse gases like methane are released, which cannot be stored. Methane is a more potent greenhouse gas than CO2, being thirty to seventy times stronger, depending on the chosen time horizon. [6]
But the most striking assumption is the availability of CO2 storage capacity that does not exist. The current Dutch CCS projects Porthos and Aramis promise to store up to 24.5 Mton of CO2 per year when they become operational at the end of this decade, but they will be exhausted by 2050. [7] However, the authors assume that in 2050, 70 Mton of CO2 can be stored annually somewhere (it is assumed that “CO2 storage capacity in foreign countries, particularly in Norway, will be used”). This reliance on CO2 export is downplayed, while the 3.5 Mton of green hydrogen that the authors argue must be imported in the fossil-free scenario is used in the conclusion to argue that the Netherlands will become more dependent on imports.
‘CO2-neutral’ but dependent on fossil fuels
The authors conclude that the two scenarios “achieve the same end goal: no CO2 emissions to the atmosphere.” Even if the assumptions were accurate, the ‘CO2-neutral’ scenario presents other problems: a CO2-neutral scenario with CCS and blue hydrogen leads to a Netherlands in 2050 that is heavily dependent on fossil fuels (making the country vulnerable to fluctuations in gas supply, as seen in 2022) and increasingly reliant on large-scale underground CO2 storage abroad. Moreover, air pollution from burning fossil fuels remains an issue.
Fossil subsidies
According to calculations by Publieke Zaken and QuO Mare, the fossil-free scenario would result in an additional €27.6 billion in investment costs compared to the CO2-neutral scenario over 25 years (an average of €1.1 billion per year). Compared to the €39-46 billion per year in subsidies that the government currently allocates for the use of fossil fuels [8], this is relatively modest. However, this is not mentioned in the report.
Climate Obstruction
The energy transition poses a threat to the oil and gas industry. Misleading reports can be used to sow doubt in politics and delay the transition [9], and are then picked up by the media. CCS is used by the oil industry to justify further expansion of oil and gas extraction, while internal communications reveal that they know it is not a climate solution. [10] IRENA, an intergovernmental agency with observer status at the UN, states: “Carbon capture technologies should not be a tool to support the weak business case for continued fossil fuel use, but they do play a role in addressing emission reduction aspects that other technologies cannot tackle.” [11] Believing that CCS will be the salvation of the Dutch fossil fuel industry is wishful thinking—and that is irresponsible.
References:
[2] https://publiekezaken.eu/dienstenoverzicht/
[3] https://www.quomare.com/industries/oil-gas-and-chemicals
[4] https://www.noordzeeloket.nl/en/functions-and-use/co2-opslag/
[5] https://www.sciencedirect.com/science/article/abs/pii/S1750583618307709
[6] https://www.knmi.nl/over-het-knmi/nieuws/klimaateffecten-van-methaan
[7] https://www.onsaardgas.nl/porthos-aramis
[9] Delaying the transition is a form of ‘climate obstruction’, see www.climateobstruction.nl