In July 2023, India hosted the 4th and last G20 Energy Transition Ministers meeting, bringing together top policymakers from member countries to chart a path towards collective net zero objectives. One important issue on the agenda was the critical need to ensure energy security and affordability for developing countries, especially amid increased geopolitical tensions and diplomatic fragmentation.
After all, there is a growing sentiment that, while the global community must continue to take decisive steps towards decarbonisation, the commitment to clean energy should not come at the cost of energy security and economic stability worldwide. Striking this delicate balance between energy security and the transition to net zero has proven difficult, and recent crises have only highlighted the vulnerability of the current approach to decarbonisation. We need to create a just transition that meets the needs of all countries, although achieving this will take a lot of work and collaboration.
According to the International Energy Security Risk Index, more than 20 of the world’s top energy-consuming countries in the Global South now face incredibly high energy insecurity and instability. This inevitably negatively impacts energy transition dialogues: energy insecurity is directly linked to political insecurity, as the recent protests around electricity blackouts in South Africa attest to. Therefore, countries with fragile energy systems are rightly going to be averse to pressure from developing countries to institute major energy transition reforms – for fear of political fallout.
To ensure we repair the fragility of the energy system and ensure that energy is available to all those who need it, we must encourage greater collaboration across all energy-connected industries and a more inclusive understanding of the developing world’s energy priorities. Only by utilising every tool at our disposal can we establish an affordable and stable energy baseload for the global community, a necessary step in ensuring that the transition to net zero is just one.
Luckily, many required tools are already available in the global energy landscape; for example, Natural gas remains a critical player in the energy industry, reflected by the exponential growth of its market size over the past three years: $62 billion in 2021, $942.68 billion in 2022, and an expected $1231.4 billion in 2026. Such incredible growth is primarily due to the cleaner-burning qualities of natural gas, as it emits significantly fewer greenhouse gases than other traditional fossil fuels, making it a crucial transitional fuel due to its relative affordability and availability.
Investing in natural gas infrastructure and LNG terminals will help diversify the energy supply and enhance energy security by reducing dependence on single-source imports. Many developing countries have significant natural gas resources, which should be essential in stimulating their energy transitions. However, this value can only be extracted if these countries are given the tools, funding and support to realise this potential in a decarbonised fashion.
In addition, recent advancements within the industry, including the enhancement of liquified natural gas (LNG) and the growing use of carbon capture technology, further improve natural gas’s flexibility and sustainability, thus enabling countries in the Global South to transition to cleaner energy consumption, have access to clean cooking and clean water.
Just this year, policymakers leaned on existing natural gas resources to make a renewed commitment to global energy security, as Japan and several EU countries proposed to create a global gas stockpiling framework to help avoid future shortages and stabilise prices. However, in as much as this is a positive step in the right direction, policies like this need buy-in from countries with more nascent economies and energy industries.
However, the energy security, affordability, and sustainability puzzle will not be solved using only one resource. To achieve a sustainable future, renewable energy sources will undoubtedly play a critical role. Recent events have seen a renewed commitment to developing and improving renewable energy resources. New regulations and incentive programs launched by the US and EU, such as the Inflation Reduction Act and the Clean Energy for All Europeans Programme, have rapidly driven more investment in renewable infrastructure, such as wind and solar.
The success of these programs aside, Europe and the US need to look beyond their borders and implement strategies and solutions to facilitate the move towards renewables in the rest of the world, particularly in countries with more rudimentary energy systems.
One such solution, biofuels, is proving particularly promising in supporting a just transition. Derived from organic matter like crops and waste, biofuels can help decarbonise transport by providing a low-carbon solution for hard-to-abate sectors. Importantly, biofuels represent a relatively inexpensive energy alternative. They can be used in existing engines with little to no modification, further increasing their viability for countries with developing or limited energy systems.
As with any significant transformation, we are navigating the transition to net zero while ensuring the security and affordability of our energy supply will require historic levels of collaboration. With so many resources at play, cooperation between traditional energy companies and emerging clean energy firms is paramount. It will likely enable a more stable and cost-effective deployment of renewable solutions. Still, to reach this ideal, we must create a better dialogue between Global North Energy transition demands and Global South energy transition realities.
Significant events, including the industry-leading ADIPEC, taking place in the UAE in October, provide a window through which these critical dialogues can occur. This year, ADIPEC will bring together key stakeholders for critical discussions on the energy industry’s future, thus offering a unique platform for the developed and developing world to voice their needs and concerns. Enabling a just transition can only be possible by creating the space for countries at different stages of development to understand each other’s needs and to marry this with the challenges and opportunities of private energy industries.
Lamé Verre, an award-winning energy executive, is co-founder & Board Co-chair | Lean-in Equity & Sustainability. https://www.linkedin.com/in/lameverre/, https://www.leaninequity.org/