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    Ukraine Crisis Fuels the Energy Transition

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    Stockholm (NordSIP) – Beyond the geopolitical, economic and humanitarian disruptions caused by the Russian invasion of Ukraine, the ongoing crisis and the sanctions imposed by Western countries on Russia has limited oil supply and driven the commodity’s prices up, close to historical peaks.

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    By highlighting European Union (EU) countries’ dependency on fossil fuels extracted in, or transiting through, Russia the ongoing crisis appears to be focusing the mind of Western capitals on the geopolitical benefits of accelerating the energy transition.

    In light of the present conjuncture, the International Energy Agency (IEA) presented a 10-Point Action Plan to ease strains and the negative impact of the price hikes, on March 18th. Following these recommendations, global energy leaders vowed to strengthen energy security and accelerate clean energy transition at an IEA energy ministers meeting on March 24th.

    Adjusting Consumption Habits

    “France and all European countries must get out of their dependence on fossil fuels, in particular on Russian fossil fuels as soon as possible,” said Barbara Pompili, the Minister for the Ecological Transition of France, which currently holds the Presidency of the European Union. “It is an absolute necessity, for the climate but also for our energy sovereignty. The plan proposed today by the IEA offers some interesting ideas, some of which are in line with our own ideas to reduce our dependence on oil.”

    Unsurprisingly, many if not all of these proposals are climate change mitigation-friendly. Breaking it down by recommentation, the IEA estimates that the following 10-action would cut down oil consumption by 2.425 million barrels of oil per day at least:

      1. Reduce speed limits on highways by at least 10 km/h
      2. Work from home up to three days a week where possible
      3. Car-free Sundays in cities
      4. Make the use of public transport cheaper and incentivise micromobility, walking and cycling
      5. Alternate private car access to roads in large cities
      6. Increase car-sharing and adopt practices to reduce fuel use
      7. Promote efficient driving for freight trucks and delivery of goods
      8. Using high-speed and night trains instead of planes where possible
      9. Avoid business air travel where alternative options exist
      10. Reinforce the adoption of electric and more efficient vehicles

    “As a result of Russia’s appalling aggression against Ukraine, the world may well be facing its biggest oil supply shock in decades, with huge implications for our economies and societies,” said IEA Executive Director Fatih Birol. “IEA Member Countries have already stepped in to support the global economy with an initial release of millions of barrels of emergency oil stocks, but we can also take action on demand to avoid the risk of a crippling oil crunch,” Dr Birol said. “Our 10-Point Plan shows this can be done through measures that have already been tested and proven in multiple countries.”

    As with many other recommendations aimed at decreasing fossil fuel consumption, not all of these actions are available to every European citizen, be it for professional reasons or due to their living conditions. However, they can certainly serve as a template of behavioural adjustment for those that can implement some if not all of those.

    Fuelling Support for the Energy Transition

    Ministers from the IEA’s 31 Member Countries said the Ministerial Meeting marks “the launch of a new phase of the Agency”, with a series of new mandates setting out its mission going forwards. “In addition to ensuring global energy security, the IEA has a new guiding principle: supporting countries in the global effort to attain net zero greenhouse gas emissions in the energy sector by mid-century,” they said in a joint press release.

    “Today, IEA Member Countries and the European Commission banded together on actions to support Ukraine, stabilize the global energy market, and ultimately end our reliance on nations that weaponize fossil energy,” said US Secretary of Energy Jennifer M. Granholm, who chaired the meeting. “The urgent need to accelerate the equitable transition to clean energy remains a top priority, and must be accelerated. I’m honored to work alongside this collection of the world’s incredibly talented energy leaders. We are committed to a clean energy future that will create millions of good paying jobs, mitigate the destructive impacts climate change, and ensure a peaceful energy future.”

    “The energy world is changing fast and needs to change faster still,” Birol added on this occasion. “The IEA is ready to support the twin goals of energy security and the clean energy transition, and I’m delighted that our Member Countries, under the leadership of Secretary Granholm, are giving us the responsibilities and the resources to tackle the major challenges of our time. The IEA was founded nearly 50 years ago during the oil crisis of the 1970s, and this Ministerial Meeting is setting us up to help lead the response to the energy and climate crises we face today.”

    Scaling up The Energy Transition

    In the context of this renewed commitment, IEA energy ministers announced a €20 million increase in funding for the agency aimed at scaling up its work supporting the transition to clean energy in emerging economies, via the IEA’s Clean Energy Transitions Programme (CETP).

    “To solve the climate crisis, we must take bold and transnational actions to ensure a green and sustainable future,” said Danish Minister for Climate and Energy Dan Jørgensen, who chaired the event on the CETP today. “The CETP is the main vehicle for the IEA to drive real global change and clean energy transition towards net zero. To this end, I am thrilled that we are so many supporters and funders to the programme.”

     

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.
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