The Energy Transition Blog’s Post

The EU and Azerbaijan as Energy Partners: Short-Term Benefits, Uncertain Future Azerbaijan has strengthened its energy ties with the #EU since 2022, ramping up #gas deliveries and articulating ambitions to export #renewableenergy and green #hydrogen to Europe in the future. However, the EU’s shrinking gas demand and #Azerbaijan’s lack of a genuine decarbonization strategy cast uncertainty on the long-term prospects of this partnership – all the more so given the EU’s persistent criticism of political repression and human rights violations in the South Caucasus republic. Expanding energy ties Azerbaijan (population 10.3 million), which is the host of this year’s global climate summit #COP29, is the epitome of a country experiencing carbon lock-in. Oil and gas production contributes roughly half of the South Caucasus republic’s GDP and half of all its national budget revenues, as well as more than 90 percent of its export earnings. The largest share of these exports goes to the European Union (EU) and is transported over pipelines running through Georgia and Turkey to Greece, Albania and Italy (Azerbaijan does not produce liquefied natural gas, LNG). With an annual production total of 48.7 billion cubic meters (bcm) of natural gas and 30.2 million tons of crude oil (2023 figures), Azerbaijan may be a smaller-sized producer in global comparison, but its importance for the EU has been growing. It is now the fourth-largest supplier of piped gas to the EU with a share of 7 percent, behind Norway, Algeria and Russia. Of the EU’s total gas imports, Azerbaijan’s share stands at 3 percent. Read the full #blogpost of Yana Zabanova here: https://lnkd.in/dEDUErGF Forschungsinstitut für Nachhaltigkeit (RIFS)

Azerbaijan has strengthened its energy ties with the EU since 2022, ramping up gas deliveries and articulating ambitions to export renewable energy and green hydrogen to Europe in the future. However, the EU’s shrinking gas demand and Azerbaijan’s lack of a genuine decarbonization strategy cast uncertainty on the long-term prospects of this partnership – all the more so given the EU’s persistent criticism of political repression and human rights violations in the South Caucasus republic. Yana Zabanova reports. Expanding energy ties Azerbaijan (population 10.3 million), which is the host of this year’s global climate summit COP29, is the epitome of a country experiencing carbon lock-in. Oil and gas production contributes roughly half of the South Caucasus republic’s GDP and half of all its national budget revenues, as well as more than 90 percent of its export earnings. The largest share of these exports goes to the European Union (EU) and is transported over pipelines running through Georgia and Turkey to Greece, Albania and Italy (Azerbaijan does not produce liquefied natural gas, LNG). With an annual production total of …

The EU and Azerbaijan as Energy Partners: Short-Term Benefits, Uncertain Future https://ift.tt/5U8s6bx Expanding energy ties Azerbaijan (population 10.3 million), which is the host of this year’s global climate summit COP29, is the epitome of a country experiencing carbon lock-in. Oil and gas production contributes roughly half of the South Caucasus republic’s GDP and half of all its national budget revenues, as well as more than 90 percent of its export earnings. The largest share of these exports goes to the European Union (EU) and is transported over pipelines running through Georgia and Turkey to Greece, Albania and Italy (Azerbaijan does not produce liquefied natural gas, LNG). With an annual production total of 48.7 billion cubic meters (bcm) of natural gas and 30.2 million tons of crude oil (2023 figures), Azerbaijan may be a smaller-sized producer in global comparison, but its importance for the EU has been growing. It is now the fourth-largest supplier of piped gas to the EU with a share of 7 percent, behind Norway, Algeria and Russia. Of the EU’s total gas imports, Azerbaijan’s share stands at 3 percent. The new geopolitical era ushered in by Russia’s full-scale invasion of Ukraine in 2022 has presented opportunities to Azerbaijan. As the EU scrambled to secure non-Russian gas supplies, Azerbaijan was quick to step in. In July 2022, European Commission President Ursula von der Leyen traveled to Baku to sign the EU-Azerbaijan Memorandum of Understanding on a Strategic Partnership in the Field of Energy. As part of the agreement, Azerbaijan pledged to more than double its gas supplies to Europe to 20 bcm annually by 2027. The EU’s decision to upgrade these ties has been controversial from the very beginning due to Azerbaijan’s worrying track record of political repression and human rights violations. In October 2024, the European Parliament passed a highly critical (although non-binding) resolution calling on the EU to end its “gas reliance” on the country and suspend the 2022 Memorandum. So far, however, political expediency has trumped other concerns. By the end of 2022, Azerbaijan was able to deliver 11.4 bcm to the EU (up from 8.1 bcm in 2021), followed by 11.8 bcm in 2023. Thanks to high gas prices, Azerbaijan’s export earnings from gas surged from USD 5.56 billion in 2021 to USD 14.99 billion in 2022 and USD 13.68 billion in 2023, surpassing revenues from oil exports for the first time in the country’s history. Azerbaijan has also expanded the geography of its exports to Europe. Romania began importing Azeri gas in 2023, followed by Hungary, Slovenia and Croatia in 2024, joining Italy (the largest importer), Bulgaria and Greece. Slovakia has expressed its interest in Azeri gas deliveries as well, while Hungary’s state-owned power company MVM Group acquired a 5 percent stake in Azerbaijan’s major Shah Deniz gas field development project and a 4 percent stake in the South Caucasus Pipeline Company in August...

I have always enjoyed working with #Azerbaijan media and learned how local and expert communities think. Yes, mindsets differ from Brussels, as the energy realism dominates over support to energy transition. One can also notice that the EU's soft power weakened over time, particularly with the lack of coherence about natural gas imports from the Caspian and with the rejection of EU-driven reforms of the Energy Charter by Europeans themselves. Rather minor aspects at global scale but still sufficient in influencing the outcomes of #COP29 at least partly. A critical question persists, if the EU looks inward in terms of international investment arbitration, withdraws from the Energy Charter and declares non-eligibility of arbitration within the EU, how can it secure its own investments related to energy transition in countries like Azerbaijan? And how can it ensure that countries follow the EU arguments, including the one on fossil fuels phase out? Graham Coop Prof. Dr. Nikos Lavranos

📢 𝗢𝗘𝗖𝗗 𝗧𝗮𝗹𝗸𝘀: 𝗔 𝗖𝗿𝘂𝗰𝗶𝗮𝗹 𝗧𝘂𝗿𝗻𝗶𝗻𝗴 𝗣𝗼𝗶𝗻𝘁 𝗳𝗼𝗿 𝗙𝗼𝘀𝘀𝗶𝗹 𝗙𝘂𝗲𝗹 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 As ministers gather in Baku to inject some positive momentum into COP29 and world leaders head to the G20 in Brazil, a critical but less visible meeting is happening in Paris: OECD export credit agency officials are deciding whether to restrict international fossil fuel financing. 𝗪𝗵𝗮𝘁'𝘀 𝗵𝗮𝗽𝗽𝗲𝗻𝗶𝗻𝗴 𝗮𝗻𝗱 𝘄𝗵𝘆 𝘁𝗵𝗶𝘀 𝗺𝗮𝘁𝘁𝗲𝗿𝘀: 1. 𝘛𝘩𝘳𝘦𝘦 𝘺𝘦𝘢𝘳𝘴 𝘪𝘯 𝘵𝘩𝘦 𝘮𝘢𝘬𝘪𝘯𝘨: These negotiations have been on the cards since COP26, when the UK launched the Clean Energy Transition Partnership (CETP), committing countries to shift intl public finance from fossils to clean energy. Signed by 41 countries, this initiative has reduced fossil finance by £15 billion — a two-thirds reduction from pre-CETP levels. 2. 𝘌𝘊𝘈𝘴 𝘢𝘳𝘦 𝘵𝘩𝘦 𝘭𝘢𝘴𝘵 𝘩𝘰𝘭𝘥𝘰𝘶𝘵: ECAs still provide $41 billion annually to fossil projects, propping up outdated energy systems. This is the last major hurdle. Approving this OECD proposal would help redirect these funds to renewables, boosting clean energy growth in EMDEs. 3. 𝘈 𝘨𝘳𝘰𝘸𝘪𝘯𝘨 𝘧𝘪𝘳𝘴𝘵-𝘮𝘰𝘷𝘦𝘳 𝘤𝘰𝘢𝘭𝘪𝘵𝘪𝘰𝘯: Leveraging the CETP, the EU, UK, Canada have table a proposal to restrict fossil fuel finance at the OECD, supported by Norway, New Zealand, and Australia. This builds on the 2015 ban on coal financing. 4. 𝘈 𝘭𝘢𝘴𝘵𝘪𝘯𝘨, 𝘛𝘳𝘶𝘮𝘱-𝘱𝘳𝘰𝘰𝘧 𝘤𝘩𝘢𝘯𝘨𝘦: If approved, this decision will be extremely difficult to reverse. This moment represents lasting change that has taken years to build, setting a standard that could transcends political cycles. 5. 𝘜.𝘚. 𝘭𝘦𝘢𝘥𝘦𝘳𝘴𝘩𝘪𝘱 𝘪𝘴 𝘤𝘳𝘪𝘵𝘪𝘤𝘢𝘭 𝘵𝘰 𝘳𝘦𝘢𝘤𝘩𝘪𝘯𝘨 𝘢𝘨𝘳𝘦𝘦𝘮𝘦𝘯𝘵: White House leadership was indispensable in securing the 2015 coal agreement and will be critical for bringing laggards on board now. Intel suggests the US is supportive of the EU position, however if the US backs out, negotiations will collapse. https://lnkd.in/e2ztNuem. 6. 𝘛𝘩𝘦 𝘬𝘦𝘺 𝘰𝘣𝘴𝘵𝘢𝘤𝘭𝘦 𝘯𝘰𝘸: 𝘚𝘰𝘶𝘵𝘩 𝘒𝘰𝘳𝘦𝘢: Korea remains the last holdout in opposing this deal, citing energy security and industrial competitiveness concerns. However, declining domestic gas demand, shifting global shipbuilding trends, and the opportunity for renewable energy investments make a strong case for Korea to change course. To avoid isolation, Korea must support this deal and gradually phase in restrictions to ensure a smooth transition. 7. 𝘏𝘪𝘨𝘩 𝘴𝘵𝘢𝘬𝘦𝘴 𝘧𝘰𝘳 𝘊𝘖𝘗 𝘢𝘯𝘥 𝘎20: This decision could set a new global standard for export credit finance, sending a critical signal during COP and the G20 that countries are serious about strengthening our collective climate finance goals, supporting future prosperity and no longer subsidising polluting energy systems. Talks start today. The world is watching. Vanessa Nakate Rachel Kyte Nina Pušić Oil Change International Solutions for Our Climate (기후솔루션)

Update on the OECD export financing talks: while Europe is holding its position and the US is navigating a compromise, South Korea and Turkey are blocking progress. Disappointing, but not surprising. The stakes are high: this is about aligning $41bn of international public financing with our climate goals, making sure that support is directed towards renewable energy projects. Missing this opportunity means continuing to finance outdated energy sources instead of investing in win-win, low cost solutions of the future. For more details, Bloomberg's latest coverage is here: https://lnkd.in/ewE9Csdx

OECD - OCDE negotiations start to shift $41 billion USD of public finance out of #FossilFuels! Huge opportunity for the Biden Administration to secure a long-lasting climate win and align #ExportFinance with the #ParisAgreement

📣 The German-Nigerian Hydrogen Office recently convened stakeholders from the public, private and international development sectors to create awareness on the European Union’s Carbon Border Adjustment Mechanism (CBAM) policy.    📌 The CBAM serves as a tool for fair pricing of carbon emitted during the production of carbon-intensive goods and currently focuses on the hydrogen, cement, fertiliser, electricity, aluminium, iron and steel sectors.     During the workshop, participants discussed the potential impacts of the CBAM on production processes and gained insight on the policy’s aim to reduce greenhouse gas emissions and address carbon leakage in the industrial sector.    #H2Diplo seeks to organise more sensitisation workshops to equip Nigerian companies with information to incorporate cleaner measures in their production processes and compete globally while meeting the requirements of the CBAM.     🌐 The German-Nigerian Hydrogen Office forms part of the H2-diplo - Decarbonization Diplomacy #H2Diplo project which is financed by the International Climate Initiative and implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the Auswärtiges Amt (Federal Foreign Office) Germany. 

In 1998, the Energy Charter Treaty was created to allow energy companies to sue their national governments if there were governmental policies that negatively impacted their financial status. Over the years, this treaty has been cited several times by companies to deny and work against policies that dictated fossil fuel plants to shut down. Over the last year, several countries, such as Brussels, have agreed to depart from the treaty as a group, but since there are still some countries, such as Hungary and Cyprus, who have decided against departing from the treaty, there is not a majority vote in the EU which would allow them to do so. In the recent months, the EU has focused on adapting the treaty to current times and reforming its rules in order to allow for a stricter regulation of fossil fuels. One of the proposed changes is to reduce the protection of non-EU countries’ investments in the bloc to ten years. #pge301