As climate officials prepare the next steps in a globally agreed shift away from fossil fuels, oil and gas executives return fire
Helsingør and Houston are separated by just over 8,000 kilometres – but when it came to sending out signals on the energy transition this week, the two cities appeared to exist on entirely different planets.
In the Danish port city, as dozens of ministers fired the starting gun on the annual climate diplomacy race, the focus was on putting December’s landmark Cop28 decision into practice. In Dubai, governments agreed for the first time to start shifting away from fossil fuels. But officials are now contemplating how to make that work in the real world – and, crucially, who will pay for it.
Meanwhile, in oil and gas-rich Texas, top fossil fuel executives took to the stage at the energy industry conference CERAWeek, where they cast doubt on the transition away from fossil fuels agreed at Cop28, with Saudi Aramco CEO Amin Nasser calling it a “fantasy”.
In the courts, Republican-led US states sued the Biden administration over its recent decision to pause new approvals for fossil gas exports.
Energy transition crossroads
For climate policy observers, these opposing forces are not entirely surprising.
Romain Ioualalen, global policy manager at campaign group Oil Change International, said the Cop28 decision puts the fossil fuel industry at a crossroads: either it pours more investment into renewable energy, or it doubles down on oil, gas and coal in a bid to undermine the green shift as much as possible.
“It seems to have chosen the latter – and unless governments immediately intervene to end fossil fuel expansion, people and planet will pay the price,” he added.
Pushing for faster adoption of clean energy certainly appears to be the intention on the international climate policy stage, where the political machinery is clanking back into gear after what Danish climate minister Dan Jørgensen dubbed “historic progress” in Dubai.
“Important decisions have been made on the action,” he told the start of the Danish summit. “Now, how do we pay for it?”
Cop28 president, Sultan Al Jaber, delivers remarks at the Copenhagen Climate Ministerial, flanked by Cop29 incoming president Mukhtar Babayev. REUTERS/Ali Withers
The question of finding money for the energy transition in developing countries will be front and centre this year as countries need to agree on a “new collective quantified goal” (NCQG) for climate finance at Cop29 in November, which will kick in from next year.
The battle lines are already drawn: developing nations want their richer counterparts to stump up the highest amount of cash with the fewest strings attached. Developed countries want other governments, including China and fossil fuel-rich Gulf nations, to join the list of donors.
The size of the money pot – and the conditions to tap into it – will be particularly important for emerging economies. They want help to finance the costly emission-slashing measures they are being asked to take.
For Mukhtar Babayev, Azerbaijan’s incoming Cop29 president, the negotiations on the new finance goal represent an opportunity to rebuild trust. Unlocking more funds, he told fellow ministers in Denmark, “will empower all parties to raise the ambition” of their upcoming climate plans.
Cop Troika urges “high-ambition” NDCs
The updated nationally determined contributions (NDCs) that all countries have been asked to submit by early 2025 was the other main talking point in Denmark on Thursday and Friday.
The so-called ‘Troika’ of the hosts of Cop28 (UAE), Cop29 (Azerbaijan) and Cop30 (Brazil) has tasked itself with building momentum and prompting countries to get moving.
On the eve of the Danish summit, the Cop presidencies sent a letter to all parties calling for “early submissions of high ambition NDCs that decisively take forward the UAE Consensus [the agreement struck in Dubai]”.
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The Troika “will aim to raise and reframe ambition for the development process” of the national climate action blueprints, pushing for more support, resources and finance, it added.
But the missive did not go down well with developed countries – and, above all, with the United States.
Its deputy special envoy for climate Sue Biniaz said she was “quite surprised” at the Troika’s suggestion that this year’s “focus on NDCs should be all about support” and that the Cop hosts defined a “high ambition NDC” for developed countries as one that includes finance for developing countries. Using that kind of wording could be “highly prejudicial” to climate finance negotiations, she warned.
Do as I say, not as I do
In the letter, the Cop host governments also pledged to demonstrate their own commitment by submitting NDCs that are aligned with the Paris Agreement goal of limiting global warming to 1.5C.
That announcement raised some eyebrows. The UAE and Brazil have some of the world’s biggest plans to expand fossil fuel production between now and 2050, while Azerbaijan’s economy primarily relies on fossil fuel extraction and it is poised to hike gas exports.
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Those intentions clash with what the International Energy Agency (IEA) says is required to remain on a 1.5C trajectory: fossil fuel demand needs to fall 80% by 2050, meaning no new upstream oil and gas projects are needed, as of now.
Harjeet Singh of the Fossil Fuel Non-Proliferation Treaty Initiative said that discrepancy “raises serious questions about the alignment between [the Troika’s] words and their actions”.
“These countries must disentangle themselves from fossil fuel interests and lead climate action by example, pressuring wealthier nations that continue to shirk their historic and moral responsibilities,” he added.
Fossil fuel reality check
The rhetoric coming from the fossil fuel industry assembled at Houston’s CERAWeek suggests strong pressure will be needed.
Saudi Aramco CEO Nasser called for more, not less, investment in oil and gas, as he claimed that the current energy transition strategy is “visibly failing on most fronts”.
President and CEO, Amin Nasser, asserts at #CERAWeek 2024 that energy consumers around the world need lower-carbon energy with minimal disruptions to their daily lives and calls for a new, multi-source, multi-speed, and multi-dimensional road to a realistic transition#aramco pic.twitter.com/OEkQvuK9HD
— aramco (@aramco) March 19, 2024
Meg O’Neill, chief executive of Australian oil and gas firm Woodside Energy, said the shift to clean energy cannot “happen at an unrealistic pace”. The bosses of oil giants Shell, ExxonMobil and Petrobras echoed similar views.
One fossil fuel executive who is equally at home in industry talking shops and climate diplomacy circles is Cop28 president Sultan Al Jaber.
On Tuesday, he told attendees at the oil and gas conference in the US that “there is just no avoiding that the energy transition will take time”.
Two days later, over in Denmark, he emphasised that “governments and all relevant parties” have to be honest about what moving away from fossil fuels will involve.
“We can’t misguide or mislead anyone anymore,” he said, sending out a message that could apply on both sides of the Helsingør-Houston divide. “We must confront the facts very early. Those who are in this room. It is our job, our duty to do that.”
