Table.Briefing: Climate (English)

Grid expansion threatens COP target + Oslo: court halts oil plans + Cars: emission standards ineffective

Dear reader,

The small details sometimes decide whether big promises succeed. This is the case with the ambitious renewables expansion targets agreed upon at COP28 in Dubai. Their success depends, above all, on sufficient power grids. Nico Beckert discovered that the situation is so dire that the two responsible energy agencies, the IEA and IRENA, now warn that the COP plans could fail.

Meanwhile, a signal against the expansion of fossil fuels comes from Norway: A court has decided that Europe’s largest oil and gas producer must put the development of new drilling fields on hold. The reason: The plans failed to consider the potential impact on the climate.

In turn, internal EU plans suggest that the electricity sector will continue to emit fossil fuels until 2050, which must be disposed of using CCS, even though the Europeans have actually agreed on an electricity system that is supposed to first and foremost be “decarbonized.”

Things are going back and forth in climate and energy policy. We’ll keep our eyes open for you. The entire team hopes you enjoy our 100th Climate.Table and all future issues!

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Bernhard Pötter
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Feature

Slow grid expansion threatens COP28 climate targets

Weltweit geht der Ausbau der Stromnetze zu langsam. Im Bild: Die Provinz Jiangsu, China
The expansion of power grids around the world is too slow. Pictured: Jiangsu province, China.

One of the biggest successes at COP28 – the decision to triple renewable energy capacity by 2030 – is being jeopardized by the slow expansion of power grids. Now, Francesco La Camera, Director-General of the International Renewable Energy Agency (IRENA), warns in an interview with Table.Media: “Without addressing the urgent infrastructure needs, the world will not be able to accelerate the energy transition to limit the temperature increase to 1.5 degrees“. La Camera adds: “Globally, investments in the power grid have lagged behind those in renewable energies.” They must be “significantly increased.”

The International Energy Agency (IEA) backs this warning with concrete numbers: The goal of tripling renewables could be missed by around 20 percent worldwide. “Insufficient investment in the grid infrastructure” is preventing a faster expansion of renewables, according to the IEA. This, in turn, means that fossil fuels would have to remain on the grid for longer and emissions would be higher than necessary.

Kristian Ruby is Secretary General of Eurelectric, an association representing 3,500 European companies from the electricity generation, distribution, and supply sectors. He calls for an “ambitious investment and expansion plan for the grids” in Europe. Over the last five years, the EU has set “extremely ambitious targets for the expansion of renewables.” The “pace of expansion of the power grids” must now be “significantly increased,” Ruby told Table.Media. Otherwise, the power grid will become a “bottleneck for the energy transition.”

La Camera: Countries must prepare their grids for renewables

La Camera urges countries to “prepare for the large amounts of renewable energy that will be connected to the grid in the coming decades.” Grid investments should be made “three to five years ahead of investments in renewables.” The stalling grid expansion is a global problem. In the United States, outdated and poorly developed grids threaten the climate effects of the government’s multi-billion dollar Inflation Reduction Act. In China, several provinces and cities are no longer able to connect new solar projects to the grid due to insufficient capacity. According to the IEA, “grid bottlenecks must also be overcome” in Japan, South Korea and Australia to enable the faster expansion of renewables.

Stable and developed power grids form the basic building block for the energy transition and a decarbonized economy:

  • Electric cars, heat pumps, the production of hydrogen and decarbonized steel production will rapidly drive up electricity demand. According to the EU Commission, electricity consumption in the EU will increase by around 60 percent by 2030. This demand can hardly be met without a corresponding grid expansion.
  • Renewable energies are often not generated where demand is high – unlike in the traditional fossil fuel-based electricity system. More grid capacity is required to transport the electricity to consumers.
  • Many consumers become electricity producers themselves thanks to rooftop solar systems. When electricity production is high, the grid must be able to absorb this new electricity generation.

Grid expansion lags behind the expansion of wind and solar

However, grid expansion is not keeping pace with the expansion of renewables. In the recent past, the reserves of the power grid have been used to connect renewables to the grid, Leonhard Birnbaum, President of the industry association Eurelectric and CEO of Eon, told Reuters. But “In more and more regions of Europe, we’ve just used up the reserves,” said Birnbaum.

If grid expansion is too slow, solar and wind power plants feed less electricity into the grid or cannot be connected to the grid at all:

  • According to the International Energy Agency, solar and wind power plants will have to be curtailed more frequently “in many countries as grid expansion cannot keep pace.” The costs for this have increased by several billion euros in recent years.
  • More than 40 percent of Europe’s distribution grid is over 40 years old. This means that the individual components have often already exceeded their average lifespan or are about to. Such an old grid is not designed to cope with new renewable capacities.
  • Long queues: Renewable energy developers in many countries, including Germany, Italy and the Netherlands, complain that it is taking too long for their wind and solar plants to be connected to the grid. In Spain and Italy, 150 gigawatts of new capacity still await connection to the grid. In Greece and Hungary, grid operators have stopped accepting requests to connect large-scale plants to the grid. According to Kadri Simson, EU Commissioner for Energy, it can take up to ten years for approvals to be granted for the reinforcement of local grids – another reason why the energy transition could come to a standstill. According to the IEA, “more than 3,000 GW of renewable generation capacity are in grid queues, and half of these projects are in advanced stages of development.”

Problems: Investments, planning, supply chains

The reasons for the slow expansion are manifold. La Camera insists on “accelerated approval procedures to ensure timely investment in modern electricity grids.” Ruby from Eurelectric considers this acceleration to be a “key point” for grid expansion.

  • The EU says that long-term planning needs to be improved. The challenge: It can take less than a year to complete renewable energy plants, while grid expansion projects take seven to ten years.
  • There is a lack of investment: The EU reports that 584 billion euros would have to be invested in the expansion and renewal of Europe’s grids by 2030 – with just over two-thirds going into distribution grids. While global investment in renewables has almost doubled since 2010, “global investment in grids has barely changed,” the IEA criticizes.
  • Expansion of the grid connections between EU member states is also taking too long. The reason: “Cost overruns, inflation, and rising interest rates,” as EU Commissioner Simson emphasizes.
  • Supply chains and lack of skilled workers: The IEA warns that there are supply problems for certain components for grid expansion, such as high-voltage transformers, high-performance chips and certain types of steel. In some cases, it takes several years to procure the components, the EU says. The problem could even be made worse by rising global demand and “potentially exacerbated” by a shortage of experienced manufacturing personnel, the IEA says.
  • In response, the EU has included power grids as a strategic sector in its Net-Zero Industry Act, which is expected to be adopted in spring 2024, and has approved a Grid Action Plan. Kristian Ruby from Eurelectric warns: “The industrial capacities in Europe for the production of components for the expansion of the grids urgently need to be expanded. Currently, the capacities are not designed for the pace of the energy transition.”
  • China
  • Energy transition
  • Europe
  • Fossile Brennstoffe
  • IEA
  • USA

Norway: Court stops oil project permits

An oil rig in Norway: A court ruling has called many oil projects in the country into question.

A court in Oslo declared the license awarding for three oil fields in Norway invalid. The judges ruled that a legally required assessment of the climate damage caused by the planned combustion of the oil was missing. Experts believe that the first-instance ruling will not directly impact Norway’s oil production. However, it could lead to more publicity and a debate about the climate impact of Norwegian oil production.

Greenpeace and Natur og Ungdom filed a lawsuit against the government’s approval of a license (known as the “Plans for Development and Operation”) for the three oil fields Breidablikk, Tyrving and Yggdrasil on the Norwegian continental shelf in the North Sea.

Clear defeat for the state

The ruling by the Oslo District Court (tingrett) is a clear defeat for the state. The court has made it clear that an impact assessment of the emissions from the combustion of the extracted oil is required by law. However, the state failed to conduct such a study before granting licenses to develop and extract the fields.

The court stated that an assessment of the climate impact, including the resulting increase in global temperature, and a public consultation are important for a well-founded and correct decision basis. This would ensure that dissenting voices are heard and considered, and that the decision-making basis is verifiable and available to the public.

“The decisions are invalid because the lack of an impact assessment of potential adverse effects on life and health from the combustion emissions,” reads the ruling handed down on January 18.

Government can ‘repair’ license decisions

Oil production at the Breidablikk oil field operated by Equinor began in October 2023. The production permit is issued for one year at a time and expires on December 31, 2024. The Tyrving oil field is expected to start production in 2025 and the Yggdrasil field in 2027. Both fields are operated by Aker BP. Yggdrasil will produce oil, gas and NGL (Natural Gas Liquid).

The ruling does not stop production in Breidablikk. But the state must now ensure that the decision, which the court has declared invalid, is “repaired” before the production license can be renewed, comments Sigrid Eskeland Schütz, a law professor at the University of Bergen, in an interview with the website Energi og Klima.

According to Schütz, this means that additional studies need to be conducted into the environmental impact of the combustion of extracted oil abroad. The greenhouse gas emissions from oil and gas combustion are much higher than the emissions generated during production.

” The reports must then be submitted for consultation, with the usual deadline, and then the matter must be finally reassessed,” says Schütz. She believes that the ministry can complete this process relatively quickly. The government will have to make new decisions for Tyrving and Yggdrasil before production can begin.

The Ministry of Energy is considering filing an appeal against the ruling. Experts expect the case to go all the way to the Supreme Court. However, Schütz believes there is no contradiction between carrying out new analyses, as required by the ruling, and appealing against it.

Errors also in 19 other oil projects?

A 2020 Supreme Court ruling states that the environmental impact of a project must be assessed, including emissions. The ruling of the Oslo court refers to this Supreme Court decision.

Several political parties believe the ruling should have consequences for all oil projects approved by the state after 2020. That is a total of 22 projects.

“We can only understand that the same procedural error applies to all licenses for new oil and gas production granted after the Supreme Court’s ruling,” Lars Haltbrekken, energy policy spokesman for the Socialist Left Party in the Norwegian parliament, told Aftenposten.

Experts agree with the parties: The same mistakes apply to all license decisions made after 2020, lawyer Anders Flaatin Wilhelmsen from the law firm Selmer told the newspaper Dagens Næringsliv. He represented the case on the climate impact of oil production before the Supreme Court in 2020 on behalf of the Norwegian state.

More publicity and knowledge – but limited consequences

Wilhelmsen sees the court ruling as a big win for the environmental movement. Nevertheless, he believes that the consequences for Norwegian oil policy will be limited. “The ruling has no significance for the Norwegian oil industry. It is only about the factual basis on which decisions about production, exploration and so on must be made,” he told Dagens Næringsliv.

Sigrid Schütz shares this view: “It’s still a political decision. So the result could be exactly the same as it is today, but probably more knowledge-based.” In the long term, it is conceivable that increasing knowledge about the effects on the climate could influence the political decisions on oil policy that are made in parliament, she emphasizes.

Minister: COP28 ‘changes nothing for Norway’

However, the signals from the government in recent months do not indicate a change of direction in Norway’s oil policy. The decision at COP28 in December to initiate a global phase-out of fossil fuels “changes nothing for Norway,” commented Energy Minister Terje Aasland on the agreement in Dubai.

On January 16, two days before the Oslo court ruling, Aasland’s ministry announced the designation of 62 new areas for the exploration of oil deposits on the Norwegian Continental Shelf. If discoveries relevant to production are made, a process for exploiting the discovery and finally granting a production license will be initiated.

In November, a group of experts called for a plan to phase out oil and gas production. The government quickly rejected the proposal. As usual, after such reports, a broad public consultation was initiated. The first phase of the consultation is still on

  • COP28
  • Norway

‘EU payments should be linked to soil conservation’

Larissa Stiem-Bhatia.

Ms. Stiem-Bhatia, why are healthy soils so crucial for the climate?

They are the largest carbon sinks and important water reservoirs, even more so than forests. This is very important for climate adaptation. After all, most arable land – in Germany and worldwide – is not irrigated artificially, meaning it has to make do with natural rainfall. Healthy soil helps plants survive periods of drought, absorbs water and thus help prevent flooding.

About climate action: How much CO2 is stored in our soils?

Calculations from 2017 concluded that a total of 680 billion tons of CO2 are stored in soils and 560 billion tons in forests worldwide. Model calculations assume that soils worldwide can hold another two to five billion tons of CO2 every year. By comparison, global carbon emissions are currently around 57 billion tons.

‘Soils are very volatile CO2 sinks’

How reliable are such figures?

Soils are a very volatile carbon sink. That much needs to be said. As soon as cultivation methods change, but also due to forest fires or droughts, the carbon can quickly escape from the soil.

And what is the situation right now? Do soils release more CO2 or store it?

There are no measurements that are accurate and comprehensive enough to provide a global overview. Whether soil releases or stores CO2 depends on many factors. Take peatlands in Germany, for example: they are largely drained and therefore release CO2. But if peatlands are rewetted, they become a CO2 sink once again.

Problems of soil sealing and intensive agriculture

Healthy soils help prevent flooding. Did this help during this winter’s flooding disaster in Germany?

This varied greatly from region to region. In Germany, we have built on and sealed a lot of natural floodplains. Sealed soils can absorb practically no water. Despite this, 55 hectares of land continue to be converted for housing and transportation every day in Germany. We are far from the government’s target of reducing this to 30 hectares by 2030 and net zero by 2050. This land policy is a problem. In addition, our intensive agriculture, which uses heavy machinery, excessive mineral fertilizers and pesticides, degrades the soil. This reduces its capacity to absorb water and hinders the important build-up of humus.

How could politics reward agriculture that preserves the humus in the soil?

EU payments under the Common Agricultural Policy (CAP) should be more closely linked to soil conservation or humus levels. In general, organic farming should receive much more financial support to make it worthwhile for farmers to make the switch and invest in soil conservation. Ultimately, they are also providing a service to society as a whole.

Criticism of humus certificates

There are tradable carbon credits that reward the build-up of humus in the soil, similar to emissions trading. What do you think of this?

These soil carbon credits are not issued by public authorities, but by private institutions. The way they are currently designed, they are problematic for farmers, climate action, and human rights. They are often so cheap that they are not a significant income alternative for farmers and hardly an incentive for soil-conserving agriculture.

Where do you see the problems for climate action?

I see three problems: First, trading in cheap credits can easily lead to companies buying their way out of climate action. They purchase credits and mathematically offset their greenhouse gas emissions instead of actually reducing their emissions. There is also the question of how long the humus – and with it, the CO2 – remains in the soil. As soon as a farm reverts from sustainable farming to monocultures or high use of pesticides, the humus content in the soil can drop again very quickly. The CO2 stored in the soil is then released. And there is the risk of leakage: a farm cultivates a certain area sustainably and receives credits for this – but in return, it may rely even more heavily on intensive farming on the neighboring field. It would receive credits even if the overall humus level of its soil remained the same.

And what human rights problems do you see?

There have been cases in the Global South where people have been evicted from their land, which they have farmed for generations, to enable credit trading. Such credits can also reinforce gender inequalities. In many countries, landowners are primarily men, meaning women rarely benefit from compensation payments. It is important that carbon trading takes a human rights-based approach.

1.2 billion hectares for climate action

Land is scarce, and vast areas will be needed as sinks for the climate. How large are these areas?

Almost all national climate action commitments within the UNFCCC include measures for nature-based climate action, that is, for storing CO2 in soils and forests. If you combine them all, you get an area requirement of 1.2 billion hectares. That is about three times the size of the EU. To get closer to the net-zero target, we would have to change the type of land use on around 630 million hectares, for example, by reforesting arable land. But this is not empty land. People live there and the fields are their livelihood.

Is there even enough land to meet climate adaptation requirements, nature conservation and food security?

The various requirements are not necessarily mutually exclusive. Conservation agriculture, for example, stores more CO2 in the soil, strengthens resilience to climate change, benefits nature conservation and can increase income through crop diversification. Biodiversity, climate action and food security go hand in hand. Whether they are compatible ultimately depends very much on the type of agriculture practiced.

How realistic is it then to include soils to such an extent as a CO2 sink in national climate action targets?

Land may be scarce. But we need it for the climate. Even if we manage to phase out fossil fuels as quickly as possible, we still need nature to store CO2 in order to meet our climate targets. Healthier soils secure agricultural yields in the long term and also enable better climate change adaptation. So there is every reason to protect them better.

Larissa Stiem-Bhatia heads the program for nature-based solutions at the TMG Think Tank for Sustainability. She is the author of the recently published Soil Atlas 2024 by BUND, the Heinrich Böll Foundation and TMG.

  • Agriculture
  • Climate adaptation
  • Climate protection
  • Flood
  • Hochwasser
  • UNFCCC

Events

Jan. 29, 12 p.m. CET, Online
Webinar Next steps for offshore energy production
The Stockholm Environment Institute’s webinar discusses current research on offshore wind energy. Among other things, it addresses the question of how expansion can be accelerated. Info

Jan. 29, 4 p.m. CET, Online
Webinar Leveraging the Echo of the Global Stocktake
This online seminar will discuss how to leverage the outputs of the Global Stocktake (GST) for more ambitious climate action. The seminar is organized by the German Federal Environment Agency and the Wuppertal Institute, among others. Info

Jan 31 – Feb. 1, Berlin
Conference Sustainable Finance and Biodiversity
While climate action is already well-established in the financial system, there is still considerable need for action in the field of biological diversity. The financial system is nonetheless crucial for the transformation to a nature-positive economy.
The Sustainable Finance Advisory Committee is bringing together stakeholders from financial institutions, the real economy, environmental protection and administration in a two-day conference to discuss all aspects of a biodiversity-friendly financial system.
Info

Jan 31, 7 p.m. CET, Online
Webinar 2023 in Review: A Report on the Booming US Clean Energy Tax Credit Market
New studies show the impact of clean energy investments through transferable tax credits in the US. Where is the market heading in 2024? This will be discussed at Latitude Media’s digital event. Info

News

Climate in figures: Renewables on the verge of a huge boom

The boom in renewables continues, especially in China: solar energy in Ordos in northern China.

The rapid expansion of renewables will continue over the next few years. According to new forecasts by the International Energy Agency (IEA), many countries will install more than twice as much renewable energy in the next six years as in the last six years. The growth forecasts for China are particularly impressive: the People’s Republic is expected to build the equivalent of every second solar and wind power plant installed worldwide. China will account for 56 percent of global expansion. “Over 2023-2028, China will deploy almost four times more renewable capacity than the European Union and five times more than the United States,” IEA analysts write.

Almost 3,700 gigawatts of new capacity will be added worldwide over the next six years – more than the total capacity of renewable energies currently installed worldwide. This means renewables will account for 42 percent of global electricity generation by 2028. By the beginning of 2025, they will replace coal as the largest power source. Wind power will already generate more electricity than nuclear power in 2025.

The expansion of renewables will be driven primarily by solar energy. Here, the IEA expects over 2,600 gigawatts of new capacity and over 800 gigawatts of onshore and offshore wind energy. By comparison, the IEA estimates that almost 510 gigawatts of new renewable energy capacity were built in 2023. However, the IEA also warns that growth could be even faster if hurdles are removed. And the wind power industry faces significant financial challenges in many countries. nib

  • China

EU Court of Auditors: emission performance standards ineffective

EU car emission performance standards have not led to the desired reduction in CO2 emissions from newly registered vehicles. It was only after 2020, eleven years after the first emissions regulations came into force, which set specific upper limits for manufacturers on the carbon emissions of new cars, that emissions from passenger cars began to fall significantly. The decline was also only due to the higher market share of battery electric vehicles. Carbon emissions from new vehicles with combustion engines did not decrease significantly.

This is the crushing verdict of the European Court of Auditors in its special report “Reducing carbon dioxide emissions from passenger cars.” The report is based on studies in Germany, Italy and the Netherlands. CO2 car legislation is the EU’s key instrument for reducing emissions from new vehicles.

The report also clearly shows that the methodology of measuring CO2 has long provided the wrong incentives for manufacturers. For example, between 2009 and 2020, the average emissions generated during actual car operation did not decrease. This was mainly due to the fact that “manufacturers focused on reducing emissions in the laboratory rather than on the road.” It was not until 2017 that a switch was made to test operation, which better simulate real driving conditions. This is why the Court of Auditors states that before 2020, the regulation did not achieve the intended benefits. mgr

  • Flottengrenzwerte

Europe wants to capture up to 41 million tons of fossil fuel emissions

Europe plans to capture millions of tons of CO2 from fossil fuel power plants every year to achieve net zero. By 2040, the amount of greenhouse gas captured in this way is set to increase to between 26 and 41 million tons per year. This is according to an as-yet unpublished draft impact assessment by the EU Commission, which is available to Table.Media.

To achieve the goal of climate neutrality by 2050, as much as 55 million tons of CO2 must be filtered out of power plant exhaust gases every year. The analysis does not specify whether the carbon dioxide is to come exclusively from natural gas or also from coal-fired power plants.

According to the 120-page document, a total of around 450 million tons of CO2 are to be captured annually from 2050, specifically from

  • Industrial processes: 136 Mt CO2
  • Biomass power plants and the air (BECCS & DACCS): 232 Mt CO2
  • Upgrading biogas to biomethane: 30 Mt CO2
  • Fossil-fired power plants: 55 Mt CO2

The captured CO2 will then be stored underground (247 million tons of CO2), used for the production of e-fuels (147 Mt of CO2) or for the production of synthetic materials (59 Mt of CO2).

The Commission will present its proposal on the EU’s climate target for 2040 on February 6. The current target under the EU Green Deal for 2030 envisages a CO2 reduction of 55 percent compared to 1990. ber/luk

  • EU-Klimaziel 2040

IPCC sets tight schedule for new report

After tough negotiations that were close to failing at the end, the Intergovernmental Panel on Climate Change (IPCC) decided late last week to start work on the 7th Assessment Report (AR7). The various parts of the report are expected to be finalized and published by the end of 2029. This was decided at last week’s 60th session of the IPCC plenary meeting in Istanbul with 375 delegates from 120 countries. The work program, on which hundreds of authors will once again be working, envisages the following:

  • A report from Working Group I: The Physical Science Basis
  • A report by Working Group II: Impacts, Adaptation, Vulnerability
  • A report by Working Group III: Mitigation of Climate Change
  • A synthesis report of the AR7
  • A special report on climate change and cities in 2027
  • A methodological report on short-lived drivers of climate change
  • A methodology report on CO2 storage, CCS, CCUS and carbon dioxide removal technologies.
  • A revision of the technical guidelines on climate impacts and adaptation, as well as the benchmarks and indicators for adaptation, to be published together with the WG II report.

The decision reflects “the interest of member governments in getting policy-relevant, timely and actionable scientific information,” said IPCC Chairman Jim Skea after the meeting. The decision was “a clear signal to the scientific community that the work on the new assessments of the climate change science can now begin in earnest.”

The authors have a tight schedule for this earnest work, delegations said. On the one hand, the working groups’ reports are to be published in time to provide information for the second Global Stocktake (GST) in 2028 – but the entire report is not expected to be ready until the end of 2029. By then, however, 2030 will already be around the corner. According to IPCC calculations, global greenhouse gas emissions will have to be practically halved by this time if the 1.5-degree target is to remain achievable.

With this decision, the IPCC plenary has decided on a slightly streamlined IPCC reporting cycle. Other options had also been considered prior to the meeting: A “light” short version of the report, the usual sequence of IPCC report plus two special reports or a “gallery of special reports“: instead of a comprehensive report, there would have been reports on topics such as climate tipping points, 1.5-degree overshoot, loss and damage, adaptation CDR or geoengineering. This idea did not catch on. bpo

  • Klimawissenschaft

Climate change main cause of drought in the Amazon

Man-made climate change was the main cause of the unusually severe drought that hit the Amazon basin last autumn. This is the conclusion of an international team of climate scientists in an analysis by the World Weather Attribution initiative. The natural climate phenomenon El Niño, which usually brings dry weather to the region, had a much smaller impact.

The researchers analyzed two indices: the Standard Precipitation Index (SPI) shows how precipitation changes in the region. It is regarded as a benchmark for a so-called meteorological drought. In addition to precipitation, the Standardised Precipitation Evapotranspiration Index (SPEI) also considers evaporation from soils and plants, which increases due to higher temperatures. It is used as a measure for agricultural drought.

The result: In the examined period from June to November 2023, El Niño and climate change both led to less rainfall. However, higher temperatures, which caused more evaporation, were almost exclusively caused by climate change. “While El Niño did lead to even lower levels of rainfall, our study shows that climate change is the main driver of the drought,” the research group says. The drought was 30 times more likely to occur with human-caused climate change.

Particularly important here is that the climate change effect will continue to increase in the future as global warming progresses. El Niño, on the other hand, fluctuates up and down. For this reason, its effects are not expected to become stronger or weaker in the long term. The Amazon is the largest rainforest on Earth and is crucial for biodiversity and as a CO2 sink for the climate. Deforestation and rising temperatures caused by climate change threaten its future. ae

  • World Weather Attribution

ECB: Many banks’ portfolios not compatible with climate targets

The transition to a greener economy has often not yet materialized in the loan books of large banks in the eurozone, according to the ECB’s banking supervisor. An analysis of 95 major financial institutions has shown that the loan portfolios “are substantially misaligned with the goals of the Paris Agreement,” writes Frank Elderson, Vice-Chair of the Supervisory Board of the ECB, in an article published on Tuesday.

This would lead to “elevated transition risks” for around 90 percent of these banks. In addition, around 70 percent of these banks could be exposed to an increased risk of legal disputes “as they are publicly committed to the Paris Agreement, but their credit portfolio is still measurably misaligned with it,” Elderson summarized the results of the analysis. According to the ECB, the financial institutions examined account for three-quarters of loans in the eurozone.

‘Only a matter of time before transition plans become mandatory’

The transition risks for financial institutions largely result from exposures to companies in the energy sector that are lagging behind in phasing out carbon-intensive production processes and are late to adopt renewable energy production. “The economy needs stable banks particularly as it goes through the green transition,” writes Elderson.

For banks, in turn, it is crucial to recognize and measure the risks arising from the transition to a decarbonized economy. “Transition planning must become a cornerstone of standard risk management, as it is only a matter of time before transition plans become mandatory,” Elderson warned. The ECB Banking Supervision was created in 2014 as a lesson learned from the banking and financial crisis. ECB Banking Supervision currently directly supervises 113 banks in the eurozone, which account for 82 percent of the banking market in the currency area. dpa

  • EZB
  • EZB

Habeck: The energy transition creates 50,000 new jobs

Germany’s Economy Minister Robert Habeck in Table.Media’s podcast studio. (Image: Marco Urban)

The increased expansion of renewable energies in Germany is also reflected in the job market: In 2022, over 50,000 more people were employed in the sector than in the previous year, German Economy Minister Robert Habeck said on Table.Media’s German podcast Table.Today on Wednesday. That is an increase of 15 percent to 387,700 employees. “The efforts we are making in climate action are creating new added value,” said Habeck. According to the German Ministry for Economic Affairs and Climate Action, the majority of the new jobs were created in the solar energy and heat pump sectors. Biomass saw a smaller increase, while the number of jobs in wind power fell slightly despite rising expansion figures.

Habeck also remains optimistic about the future. Northvolt’s decision to invest in a new battery factory in Germany, for example, shows that the country can keep up with the competition – albeit with massive state subsidies. “I also believe that this subsidy race is not healthy,” said the Minister in the podcast. “On the other hand, you don’t want to stand by and watch and wave goodbye when the industry leaves.” Habeck also expects high levels of investment in the hydrogen sector.

A new study by the German Economic Institute (IW) on behalf of the Ruhr Regional Association shows that many new jobs will be created there too. The study will be published on Thursday and was made available to Table.Media in advance. According to the study, the development of the hydrogen economy will create around 8,700 new jobs in the Germany Ruhr region alone by 2023; this figure could rise to over 25,000 by 2045. In addition, the switch to hydrogen will secure thousands of existing jobs, for example in the steel industry. “If the ecological transformation succeeds, there is an opportunity to prevent the relocation of production to countries without carbon emissions trading,” said study co-author Vanessa Hünnemeyer. mkr

  • Energiewende

Study: Conversion of 1,000 companies would bring a third of the CO2 reduction for 1.5 degrees

The 1,000 most CO2-intensive industrial plants in the world could save around eight billion tons of CO2 annually if they were to be fully decarbonized and thus help maintain the 1.5-degree limit on global warming. Depending on the technology, this transition would require investments of between 7.5 and 10.5 trillion US dollars between 2025 and 2050 and would deliver around a third of the necessary reduction in greenhouse gases. This is the result of the “Global Carbon Restructuring Plan” study presented by management consultancy Roland Berger.

According to the study, over three-quarters (77 percent) of emissions come from electricity generation, 18 percent from the iron and steel sector, and 3.5 percent from the oil and gas industry. Only 40 companies are responsible for over half of the emissions. According to the report, this shows the huge climate action potential of concerted action to decarbonize these main emitters. However, decarbonization plans have only been drawn up for eleven percent of the identified power plants. In Europe, half of the plants have such plans, and in the US, just under a third.

Most of these high-emission plants are located in China (54 percent) and India (13 percent), followed by the USA (10 percent) and Europe (3 percent). This is a problem because these locations would mean that China and India would be significantly more affected by decarbonization. They would need to spend between 18 and 30 percent of their gross domestic product on this, while the USA and Europe would only have to spend between two and five percent.

The technologies for decarbonization are

  • renewable energies are the cheapest, with costs of 7.5 trillion US dollars,
  • followed by the use of gas with 10.3 trillion;
  • the most expensive options are nuclear energy and CCS at 10.5 trillion each.

Over 25 years, this plan would mean investments of 300 to 400 billion US dollars annually. That would be less than 20 percent of global arms spending or research and development spending (around two trillion US dollars each in 2021), the authors write. bpo

  • Dekarbonisierung

China reboots voluntary carbon-credit market

China has resumed voluntary trading in CO2 credits (Chinese Certified Emissions Reductions/CCER). The revised CCER system allows any company to purchase carbon credits – not just the energy companies currently participating in China’s emissions trading system (ETS). According to a conservative estimate by local investment bank Minsheng Securities, the CCER spot market could reach a volume of around 20 billion yuan (2.56 billion euros) by 2025.

Initially, only credits for projects approved before 2017 can be traded at the China Beijing Green Exchange, as Bloomberg reports. However, approval for new projects is now expected. Accreditations for institutions for the assessment and certification of emissions are still to be issued in 2024.

CCCERs verify climate action projects of ETS companies to offset their emissions, for example, through investments in renewables, carbon sinks, or the use of methane. Projects from solar thermal energy, offshore wind power, reforestation and mangrove restoration will also be eligible in the future.

China launched the CCER system in 2012; between 2013 and 2017, credits were issued for 287 projects, primarily for wind energy, photovoltaics and the use of biogas in rural areas. In March 2017, China suspended issuing new credits due to low transaction volumes and a lack of standards for CO2 auditing.

For the CCER – and the ETS – to be truly effective, China would have to set stricter emission caps, say analysts from the consulting firm Trivium China. In China’s ETS, companies are allowed to offset up to five percent of their compliance obligations using such CCERs. So far, it only covers 2530 companies in the energy sector, which were responsible for around 40 percent of Chinese emissions in 2022. It will soon be extended to eight heavy industry sectors. Since trading started in mid-2021, the average carbon price in the ETS has increased from 43 yuan per ton to 68 yuan at the end of 2023, which is equivalent to just under 9 euros. The difference to EU emissions trading, where the price at the end of the year was around 80 euros, is still considerable, and there are also frequent problems with the submitted emissions data. ck

  • China

Heads

Celeste Saulo – New Secretary-General of the World Meteorological Organization

Celeste Saulo, Secretary-General of the World Meteorological Organization.

At the start of the year, Argentinian Celeste Saulo took over as head of the World Meteorological Organisation (WMO) in Geneva. “We stand at the intersection of inequality and climate change,” the 59-year-old meteorologist repeatedly emphasizes. As the former first Deputy Secretary-General, she is very familiar with the apparatus of the UN specialized agency and was elected WMO Secretary-General six months ago by a large majority.

Celeste Saulo is both an academic and an experienced manager. Born in the Argentinian capital in 1964, she studied meteorology at the Public University of Buenos Aires and obtained her PhD in atmospheric sciences in 1996. She continued her scientific career at the same university, where she twice headed the Department of Atmospheric and Marine Studies. After her election, she revealed that, as a mother of two children, she had to miss out on many trips abroad.

Instead, she was committed to modernizing Argentina’s meteorological service, which she headed from 2014 to 2023. In this role, she became Argentina’s representative to the WMO, quickly becoming a member of its Executive Board and eventually becoming its first Deputy Director-General. She is now the first woman to head the WMO – 150 years after the founding of the International Meteorological Organization, the organization’s predecessor. She is now the second person from the Global South to hold the leadership position in Geneva, long the domain of Europe.

Listening and talking to each other – that is the approach with which Saulo intends to break down internal blockades at the WMO. There was excessive competition between the departments, she explained. The exchange between the national meteorological services is one of the organization’s core tasks. However, she also wants to emphasize external cooperation, for example, with other UN organizations, NGOs, or private companies.

Weather data for the Global South

In times of climate change, the WMO is more important than ever – especially for the Global South: Last November, hundreds died in floods in the Horn of Africa and hundreds of thousands became climate refugees. A year ago, a long drought resulted in billions of losses for Argentinian farmers and accelerated the destruction of forests.

The most urgent task is the comprehensive installation of early warning systems to protect the population from extreme meteorological events, “because half of the countries don’t have any”. According to Saulo, such systems work best “when they are set up from the bottom up, with the involvement of those affected and in accordance with the respective cultural context.” Data collection also needs to be expanded in many countries, she says.

Given tight public budgets, Celeste Saulo believes that public-private partnerships are essential without giving large companies the upper hand. “Science and technology have come a long way,” she said when asked about the prospects of slowing down climate change. “When there are decisions that are sensitive to economies and economic interests, that is where the issue becomes very complex.”

Nevertheless, Saulo is a career optimist: “Everyone can do something,” she says almost imploringly, “we are not just thinking about ourselves, but also about the fact that future generations deserve a planet worth living on.” Gerhard Dilger, Buenos Aires

  • Extremwetter

Climate.Table editorial team

CLIMATE.TABLE EDITORIAL OFFICE

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    Dear reader,

    The small details sometimes decide whether big promises succeed. This is the case with the ambitious renewables expansion targets agreed upon at COP28 in Dubai. Their success depends, above all, on sufficient power grids. Nico Beckert discovered that the situation is so dire that the two responsible energy agencies, the IEA and IRENA, now warn that the COP plans could fail.

    Meanwhile, a signal against the expansion of fossil fuels comes from Norway: A court has decided that Europe’s largest oil and gas producer must put the development of new drilling fields on hold. The reason: The plans failed to consider the potential impact on the climate.

    In turn, internal EU plans suggest that the electricity sector will continue to emit fossil fuels until 2050, which must be disposed of using CCS, even though the Europeans have actually agreed on an electricity system that is supposed to first and foremost be “decarbonized.”

    Things are going back and forth in climate and energy policy. We’ll keep our eyes open for you. The entire team hopes you enjoy our 100th Climate.Table and all future issues!

    Your
    Bernhard Pötter
    Image of Bernhard  Pötter

    Feature

    Slow grid expansion threatens COP28 climate targets

    Weltweit geht der Ausbau der Stromnetze zu langsam. Im Bild: Die Provinz Jiangsu, China
    The expansion of power grids around the world is too slow. Pictured: Jiangsu province, China.

    One of the biggest successes at COP28 – the decision to triple renewable energy capacity by 2030 – is being jeopardized by the slow expansion of power grids. Now, Francesco La Camera, Director-General of the International Renewable Energy Agency (IRENA), warns in an interview with Table.Media: “Without addressing the urgent infrastructure needs, the world will not be able to accelerate the energy transition to limit the temperature increase to 1.5 degrees“. La Camera adds: “Globally, investments in the power grid have lagged behind those in renewable energies.” They must be “significantly increased.”

    The International Energy Agency (IEA) backs this warning with concrete numbers: The goal of tripling renewables could be missed by around 20 percent worldwide. “Insufficient investment in the grid infrastructure” is preventing a faster expansion of renewables, according to the IEA. This, in turn, means that fossil fuels would have to remain on the grid for longer and emissions would be higher than necessary.

    Kristian Ruby is Secretary General of Eurelectric, an association representing 3,500 European companies from the electricity generation, distribution, and supply sectors. He calls for an “ambitious investment and expansion plan for the grids” in Europe. Over the last five years, the EU has set “extremely ambitious targets for the expansion of renewables.” The “pace of expansion of the power grids” must now be “significantly increased,” Ruby told Table.Media. Otherwise, the power grid will become a “bottleneck for the energy transition.”

    La Camera: Countries must prepare their grids for renewables

    La Camera urges countries to “prepare for the large amounts of renewable energy that will be connected to the grid in the coming decades.” Grid investments should be made “three to five years ahead of investments in renewables.” The stalling grid expansion is a global problem. In the United States, outdated and poorly developed grids threaten the climate effects of the government’s multi-billion dollar Inflation Reduction Act. In China, several provinces and cities are no longer able to connect new solar projects to the grid due to insufficient capacity. According to the IEA, “grid bottlenecks must also be overcome” in Japan, South Korea and Australia to enable the faster expansion of renewables.

    Stable and developed power grids form the basic building block for the energy transition and a decarbonized economy:

    • Electric cars, heat pumps, the production of hydrogen and decarbonized steel production will rapidly drive up electricity demand. According to the EU Commission, electricity consumption in the EU will increase by around 60 percent by 2030. This demand can hardly be met without a corresponding grid expansion.
    • Renewable energies are often not generated where demand is high – unlike in the traditional fossil fuel-based electricity system. More grid capacity is required to transport the electricity to consumers.
    • Many consumers become electricity producers themselves thanks to rooftop solar systems. When electricity production is high, the grid must be able to absorb this new electricity generation.

    Grid expansion lags behind the expansion of wind and solar

    However, grid expansion is not keeping pace with the expansion of renewables. In the recent past, the reserves of the power grid have been used to connect renewables to the grid, Leonhard Birnbaum, President of the industry association Eurelectric and CEO of Eon, told Reuters. But “In more and more regions of Europe, we’ve just used up the reserves,” said Birnbaum.

    If grid expansion is too slow, solar and wind power plants feed less electricity into the grid or cannot be connected to the grid at all:

    • According to the International Energy Agency, solar and wind power plants will have to be curtailed more frequently “in many countries as grid expansion cannot keep pace.” The costs for this have increased by several billion euros in recent years.
    • More than 40 percent of Europe’s distribution grid is over 40 years old. This means that the individual components have often already exceeded their average lifespan or are about to. Such an old grid is not designed to cope with new renewable capacities.
    • Long queues: Renewable energy developers in many countries, including Germany, Italy and the Netherlands, complain that it is taking too long for their wind and solar plants to be connected to the grid. In Spain and Italy, 150 gigawatts of new capacity still await connection to the grid. In Greece and Hungary, grid operators have stopped accepting requests to connect large-scale plants to the grid. According to Kadri Simson, EU Commissioner for Energy, it can take up to ten years for approvals to be granted for the reinforcement of local grids – another reason why the energy transition could come to a standstill. According to the IEA, “more than 3,000 GW of renewable generation capacity are in grid queues, and half of these projects are in advanced stages of development.”

    Problems: Investments, planning, supply chains

    The reasons for the slow expansion are manifold. La Camera insists on “accelerated approval procedures to ensure timely investment in modern electricity grids.” Ruby from Eurelectric considers this acceleration to be a “key point” for grid expansion.

    • The EU says that long-term planning needs to be improved. The challenge: It can take less than a year to complete renewable energy plants, while grid expansion projects take seven to ten years.
    • There is a lack of investment: The EU reports that 584 billion euros would have to be invested in the expansion and renewal of Europe’s grids by 2030 – with just over two-thirds going into distribution grids. While global investment in renewables has almost doubled since 2010, “global investment in grids has barely changed,” the IEA criticizes.
    • Expansion of the grid connections between EU member states is also taking too long. The reason: “Cost overruns, inflation, and rising interest rates,” as EU Commissioner Simson emphasizes.
    • Supply chains and lack of skilled workers: The IEA warns that there are supply problems for certain components for grid expansion, such as high-voltage transformers, high-performance chips and certain types of steel. In some cases, it takes several years to procure the components, the EU says. The problem could even be made worse by rising global demand and “potentially exacerbated” by a shortage of experienced manufacturing personnel, the IEA says.
    • In response, the EU has included power grids as a strategic sector in its Net-Zero Industry Act, which is expected to be adopted in spring 2024, and has approved a Grid Action Plan. Kristian Ruby from Eurelectric warns: “The industrial capacities in Europe for the production of components for the expansion of the grids urgently need to be expanded. Currently, the capacities are not designed for the pace of the energy transition.”
    • China
    • Energy transition
    • Europe
    • Fossile Brennstoffe
    • IEA
    • USA

    Norway: Court stops oil project permits

    An oil rig in Norway: A court ruling has called many oil projects in the country into question.

    A court in Oslo declared the license awarding for three oil fields in Norway invalid. The judges ruled that a legally required assessment of the climate damage caused by the planned combustion of the oil was missing. Experts believe that the first-instance ruling will not directly impact Norway’s oil production. However, it could lead to more publicity and a debate about the climate impact of Norwegian oil production.

    Greenpeace and Natur og Ungdom filed a lawsuit against the government’s approval of a license (known as the “Plans for Development and Operation”) for the three oil fields Breidablikk, Tyrving and Yggdrasil on the Norwegian continental shelf in the North Sea.

    Clear defeat for the state

    The ruling by the Oslo District Court (tingrett) is a clear defeat for the state. The court has made it clear that an impact assessment of the emissions from the combustion of the extracted oil is required by law. However, the state failed to conduct such a study before granting licenses to develop and extract the fields.

    The court stated that an assessment of the climate impact, including the resulting increase in global temperature, and a public consultation are important for a well-founded and correct decision basis. This would ensure that dissenting voices are heard and considered, and that the decision-making basis is verifiable and available to the public.

    “The decisions are invalid because the lack of an impact assessment of potential adverse effects on life and health from the combustion emissions,” reads the ruling handed down on January 18.

    Government can ‘repair’ license decisions

    Oil production at the Breidablikk oil field operated by Equinor began in October 2023. The production permit is issued for one year at a time and expires on December 31, 2024. The Tyrving oil field is expected to start production in 2025 and the Yggdrasil field in 2027. Both fields are operated by Aker BP. Yggdrasil will produce oil, gas and NGL (Natural Gas Liquid).

    The ruling does not stop production in Breidablikk. But the state must now ensure that the decision, which the court has declared invalid, is “repaired” before the production license can be renewed, comments Sigrid Eskeland Schütz, a law professor at the University of Bergen, in an interview with the website Energi og Klima.

    According to Schütz, this means that additional studies need to be conducted into the environmental impact of the combustion of extracted oil abroad. The greenhouse gas emissions from oil and gas combustion are much higher than the emissions generated during production.

    ” The reports must then be submitted for consultation, with the usual deadline, and then the matter must be finally reassessed,” says Schütz. She believes that the ministry can complete this process relatively quickly. The government will have to make new decisions for Tyrving and Yggdrasil before production can begin.

    The Ministry of Energy is considering filing an appeal against the ruling. Experts expect the case to go all the way to the Supreme Court. However, Schütz believes there is no contradiction between carrying out new analyses, as required by the ruling, and appealing against it.

    Errors also in 19 other oil projects?

    A 2020 Supreme Court ruling states that the environmental impact of a project must be assessed, including emissions. The ruling of the Oslo court refers to this Supreme Court decision.

    Several political parties believe the ruling should have consequences for all oil projects approved by the state after 2020. That is a total of 22 projects.

    “We can only understand that the same procedural error applies to all licenses for new oil and gas production granted after the Supreme Court’s ruling,” Lars Haltbrekken, energy policy spokesman for the Socialist Left Party in the Norwegian parliament, told Aftenposten.

    Experts agree with the parties: The same mistakes apply to all license decisions made after 2020, lawyer Anders Flaatin Wilhelmsen from the law firm Selmer told the newspaper Dagens Næringsliv. He represented the case on the climate impact of oil production before the Supreme Court in 2020 on behalf of the Norwegian state.

    More publicity and knowledge – but limited consequences

    Wilhelmsen sees the court ruling as a big win for the environmental movement. Nevertheless, he believes that the consequences for Norwegian oil policy will be limited. “The ruling has no significance for the Norwegian oil industry. It is only about the factual basis on which decisions about production, exploration and so on must be made,” he told Dagens Næringsliv.

    Sigrid Schütz shares this view: “It’s still a political decision. So the result could be exactly the same as it is today, but probably more knowledge-based.” In the long term, it is conceivable that increasing knowledge about the effects on the climate could influence the political decisions on oil policy that are made in parliament, she emphasizes.

    Minister: COP28 ‘changes nothing for Norway’

    However, the signals from the government in recent months do not indicate a change of direction in Norway’s oil policy. The decision at COP28 in December to initiate a global phase-out of fossil fuels “changes nothing for Norway,” commented Energy Minister Terje Aasland on the agreement in Dubai.

    On January 16, two days before the Oslo court ruling, Aasland’s ministry announced the designation of 62 new areas for the exploration of oil deposits on the Norwegian Continental Shelf. If discoveries relevant to production are made, a process for exploiting the discovery and finally granting a production license will be initiated.

    In November, a group of experts called for a plan to phase out oil and gas production. The government quickly rejected the proposal. As usual, after such reports, a broad public consultation was initiated. The first phase of the consultation is still on

    • COP28
    • Norway

    ‘EU payments should be linked to soil conservation’

    Larissa Stiem-Bhatia.

    Ms. Stiem-Bhatia, why are healthy soils so crucial for the climate?

    They are the largest carbon sinks and important water reservoirs, even more so than forests. This is very important for climate adaptation. After all, most arable land – in Germany and worldwide – is not irrigated artificially, meaning it has to make do with natural rainfall. Healthy soil helps plants survive periods of drought, absorbs water and thus help prevent flooding.

    About climate action: How much CO2 is stored in our soils?

    Calculations from 2017 concluded that a total of 680 billion tons of CO2 are stored in soils and 560 billion tons in forests worldwide. Model calculations assume that soils worldwide can hold another two to five billion tons of CO2 every year. By comparison, global carbon emissions are currently around 57 billion tons.

    ‘Soils are very volatile CO2 sinks’

    How reliable are such figures?

    Soils are a very volatile carbon sink. That much needs to be said. As soon as cultivation methods change, but also due to forest fires or droughts, the carbon can quickly escape from the soil.

    And what is the situation right now? Do soils release more CO2 or store it?

    There are no measurements that are accurate and comprehensive enough to provide a global overview. Whether soil releases or stores CO2 depends on many factors. Take peatlands in Germany, for example: they are largely drained and therefore release CO2. But if peatlands are rewetted, they become a CO2 sink once again.

    Problems of soil sealing and intensive agriculture

    Healthy soils help prevent flooding. Did this help during this winter’s flooding disaster in Germany?

    This varied greatly from region to region. In Germany, we have built on and sealed a lot of natural floodplains. Sealed soils can absorb practically no water. Despite this, 55 hectares of land continue to be converted for housing and transportation every day in Germany. We are far from the government’s target of reducing this to 30 hectares by 2030 and net zero by 2050. This land policy is a problem. In addition, our intensive agriculture, which uses heavy machinery, excessive mineral fertilizers and pesticides, degrades the soil. This reduces its capacity to absorb water and hinders the important build-up of humus.

    How could politics reward agriculture that preserves the humus in the soil?

    EU payments under the Common Agricultural Policy (CAP) should be more closely linked to soil conservation or humus levels. In general, organic farming should receive much more financial support to make it worthwhile for farmers to make the switch and invest in soil conservation. Ultimately, they are also providing a service to society as a whole.

    Criticism of humus certificates

    There are tradable carbon credits that reward the build-up of humus in the soil, similar to emissions trading. What do you think of this?

    These soil carbon credits are not issued by public authorities, but by private institutions. The way they are currently designed, they are problematic for farmers, climate action, and human rights. They are often so cheap that they are not a significant income alternative for farmers and hardly an incentive for soil-conserving agriculture.

    Where do you see the problems for climate action?

    I see three problems: First, trading in cheap credits can easily lead to companies buying their way out of climate action. They purchase credits and mathematically offset their greenhouse gas emissions instead of actually reducing their emissions. There is also the question of how long the humus – and with it, the CO2 – remains in the soil. As soon as a farm reverts from sustainable farming to monocultures or high use of pesticides, the humus content in the soil can drop again very quickly. The CO2 stored in the soil is then released. And there is the risk of leakage: a farm cultivates a certain area sustainably and receives credits for this – but in return, it may rely even more heavily on intensive farming on the neighboring field. It would receive credits even if the overall humus level of its soil remained the same.

    And what human rights problems do you see?

    There have been cases in the Global South where people have been evicted from their land, which they have farmed for generations, to enable credit trading. Such credits can also reinforce gender inequalities. In many countries, landowners are primarily men, meaning women rarely benefit from compensation payments. It is important that carbon trading takes a human rights-based approach.

    1.2 billion hectares for climate action

    Land is scarce, and vast areas will be needed as sinks for the climate. How large are these areas?

    Almost all national climate action commitments within the UNFCCC include measures for nature-based climate action, that is, for storing CO2 in soils and forests. If you combine them all, you get an area requirement of 1.2 billion hectares. That is about three times the size of the EU. To get closer to the net-zero target, we would have to change the type of land use on around 630 million hectares, for example, by reforesting arable land. But this is not empty land. People live there and the fields are their livelihood.

    Is there even enough land to meet climate adaptation requirements, nature conservation and food security?

    The various requirements are not necessarily mutually exclusive. Conservation agriculture, for example, stores more CO2 in the soil, strengthens resilience to climate change, benefits nature conservation and can increase income through crop diversification. Biodiversity, climate action and food security go hand in hand. Whether they are compatible ultimately depends very much on the type of agriculture practiced.

    How realistic is it then to include soils to such an extent as a CO2 sink in national climate action targets?

    Land may be scarce. But we need it for the climate. Even if we manage to phase out fossil fuels as quickly as possible, we still need nature to store CO2 in order to meet our climate targets. Healthier soils secure agricultural yields in the long term and also enable better climate change adaptation. So there is every reason to protect them better.

    Larissa Stiem-Bhatia heads the program for nature-based solutions at the TMG Think Tank for Sustainability. She is the author of the recently published Soil Atlas 2024 by BUND, the Heinrich Böll Foundation and TMG.

    • Agriculture
    • Climate adaptation
    • Climate protection
    • Flood
    • Hochwasser
    • UNFCCC

    Events

    Jan. 29, 12 p.m. CET, Online
    Webinar Next steps for offshore energy production
    The Stockholm Environment Institute’s webinar discusses current research on offshore wind energy. Among other things, it addresses the question of how expansion can be accelerated. Info

    Jan. 29, 4 p.m. CET, Online
    Webinar Leveraging the Echo of the Global Stocktake
    This online seminar will discuss how to leverage the outputs of the Global Stocktake (GST) for more ambitious climate action. The seminar is organized by the German Federal Environment Agency and the Wuppertal Institute, among others. Info

    Jan 31 – Feb. 1, Berlin
    Conference Sustainable Finance and Biodiversity
    While climate action is already well-established in the financial system, there is still considerable need for action in the field of biological diversity. The financial system is nonetheless crucial for the transformation to a nature-positive economy.
    The Sustainable Finance Advisory Committee is bringing together stakeholders from financial institutions, the real economy, environmental protection and administration in a two-day conference to discuss all aspects of a biodiversity-friendly financial system.
    Info

    Jan 31, 7 p.m. CET, Online
    Webinar 2023 in Review: A Report on the Booming US Clean Energy Tax Credit Market
    New studies show the impact of clean energy investments through transferable tax credits in the US. Where is the market heading in 2024? This will be discussed at Latitude Media’s digital event. Info

    News

    Climate in figures: Renewables on the verge of a huge boom

    The boom in renewables continues, especially in China: solar energy in Ordos in northern China.

    The rapid expansion of renewables will continue over the next few years. According to new forecasts by the International Energy Agency (IEA), many countries will install more than twice as much renewable energy in the next six years as in the last six years. The growth forecasts for China are particularly impressive: the People’s Republic is expected to build the equivalent of every second solar and wind power plant installed worldwide. China will account for 56 percent of global expansion. “Over 2023-2028, China will deploy almost four times more renewable capacity than the European Union and five times more than the United States,” IEA analysts write.

    Almost 3,700 gigawatts of new capacity will be added worldwide over the next six years – more than the total capacity of renewable energies currently installed worldwide. This means renewables will account for 42 percent of global electricity generation by 2028. By the beginning of 2025, they will replace coal as the largest power source. Wind power will already generate more electricity than nuclear power in 2025.

    The expansion of renewables will be driven primarily by solar energy. Here, the IEA expects over 2,600 gigawatts of new capacity and over 800 gigawatts of onshore and offshore wind energy. By comparison, the IEA estimates that almost 510 gigawatts of new renewable energy capacity were built in 2023. However, the IEA also warns that growth could be even faster if hurdles are removed. And the wind power industry faces significant financial challenges in many countries. nib

    • China

    EU Court of Auditors: emission performance standards ineffective

    EU car emission performance standards have not led to the desired reduction in CO2 emissions from newly registered vehicles. It was only after 2020, eleven years after the first emissions regulations came into force, which set specific upper limits for manufacturers on the carbon emissions of new cars, that emissions from passenger cars began to fall significantly. The decline was also only due to the higher market share of battery electric vehicles. Carbon emissions from new vehicles with combustion engines did not decrease significantly.

    This is the crushing verdict of the European Court of Auditors in its special report “Reducing carbon dioxide emissions from passenger cars.” The report is based on studies in Germany, Italy and the Netherlands. CO2 car legislation is the EU’s key instrument for reducing emissions from new vehicles.

    The report also clearly shows that the methodology of measuring CO2 has long provided the wrong incentives for manufacturers. For example, between 2009 and 2020, the average emissions generated during actual car operation did not decrease. This was mainly due to the fact that “manufacturers focused on reducing emissions in the laboratory rather than on the road.” It was not until 2017 that a switch was made to test operation, which better simulate real driving conditions. This is why the Court of Auditors states that before 2020, the regulation did not achieve the intended benefits. mgr

    • Flottengrenzwerte

    Europe wants to capture up to 41 million tons of fossil fuel emissions

    Europe plans to capture millions of tons of CO2 from fossil fuel power plants every year to achieve net zero. By 2040, the amount of greenhouse gas captured in this way is set to increase to between 26 and 41 million tons per year. This is according to an as-yet unpublished draft impact assessment by the EU Commission, which is available to Table.Media.

    To achieve the goal of climate neutrality by 2050, as much as 55 million tons of CO2 must be filtered out of power plant exhaust gases every year. The analysis does not specify whether the carbon dioxide is to come exclusively from natural gas or also from coal-fired power plants.

    According to the 120-page document, a total of around 450 million tons of CO2 are to be captured annually from 2050, specifically from

    • Industrial processes: 136 Mt CO2
    • Biomass power plants and the air (BECCS & DACCS): 232 Mt CO2
    • Upgrading biogas to biomethane: 30 Mt CO2
    • Fossil-fired power plants: 55 Mt CO2

    The captured CO2 will then be stored underground (247 million tons of CO2), used for the production of e-fuels (147 Mt of CO2) or for the production of synthetic materials (59 Mt of CO2).

    The Commission will present its proposal on the EU’s climate target for 2040 on February 6. The current target under the EU Green Deal for 2030 envisages a CO2 reduction of 55 percent compared to 1990. ber/luk

    • EU-Klimaziel 2040

    IPCC sets tight schedule for new report

    After tough negotiations that were close to failing at the end, the Intergovernmental Panel on Climate Change (IPCC) decided late last week to start work on the 7th Assessment Report (AR7). The various parts of the report are expected to be finalized and published by the end of 2029. This was decided at last week’s 60th session of the IPCC plenary meeting in Istanbul with 375 delegates from 120 countries. The work program, on which hundreds of authors will once again be working, envisages the following:

    • A report from Working Group I: The Physical Science Basis
    • A report by Working Group II: Impacts, Adaptation, Vulnerability
    • A report by Working Group III: Mitigation of Climate Change
    • A synthesis report of the AR7
    • A special report on climate change and cities in 2027
    • A methodological report on short-lived drivers of climate change
    • A methodology report on CO2 storage, CCS, CCUS and carbon dioxide removal technologies.
    • A revision of the technical guidelines on climate impacts and adaptation, as well as the benchmarks and indicators for adaptation, to be published together with the WG II report.

    The decision reflects “the interest of member governments in getting policy-relevant, timely and actionable scientific information,” said IPCC Chairman Jim Skea after the meeting. The decision was “a clear signal to the scientific community that the work on the new assessments of the climate change science can now begin in earnest.”

    The authors have a tight schedule for this earnest work, delegations said. On the one hand, the working groups’ reports are to be published in time to provide information for the second Global Stocktake (GST) in 2028 – but the entire report is not expected to be ready until the end of 2029. By then, however, 2030 will already be around the corner. According to IPCC calculations, global greenhouse gas emissions will have to be practically halved by this time if the 1.5-degree target is to remain achievable.

    With this decision, the IPCC plenary has decided on a slightly streamlined IPCC reporting cycle. Other options had also been considered prior to the meeting: A “light” short version of the report, the usual sequence of IPCC report plus two special reports or a “gallery of special reports“: instead of a comprehensive report, there would have been reports on topics such as climate tipping points, 1.5-degree overshoot, loss and damage, adaptation CDR or geoengineering. This idea did not catch on. bpo

    • Klimawissenschaft

    Climate change main cause of drought in the Amazon

    Man-made climate change was the main cause of the unusually severe drought that hit the Amazon basin last autumn. This is the conclusion of an international team of climate scientists in an analysis by the World Weather Attribution initiative. The natural climate phenomenon El Niño, which usually brings dry weather to the region, had a much smaller impact.

    The researchers analyzed two indices: the Standard Precipitation Index (SPI) shows how precipitation changes in the region. It is regarded as a benchmark for a so-called meteorological drought. In addition to precipitation, the Standardised Precipitation Evapotranspiration Index (SPEI) also considers evaporation from soils and plants, which increases due to higher temperatures. It is used as a measure for agricultural drought.

    The result: In the examined period from June to November 2023, El Niño and climate change both led to less rainfall. However, higher temperatures, which caused more evaporation, were almost exclusively caused by climate change. “While El Niño did lead to even lower levels of rainfall, our study shows that climate change is the main driver of the drought,” the research group says. The drought was 30 times more likely to occur with human-caused climate change.

    Particularly important here is that the climate change effect will continue to increase in the future as global warming progresses. El Niño, on the other hand, fluctuates up and down. For this reason, its effects are not expected to become stronger or weaker in the long term. The Amazon is the largest rainforest on Earth and is crucial for biodiversity and as a CO2 sink for the climate. Deforestation and rising temperatures caused by climate change threaten its future. ae

    • World Weather Attribution

    ECB: Many banks’ portfolios not compatible with climate targets

    The transition to a greener economy has often not yet materialized in the loan books of large banks in the eurozone, according to the ECB’s banking supervisor. An analysis of 95 major financial institutions has shown that the loan portfolios “are substantially misaligned with the goals of the Paris Agreement,” writes Frank Elderson, Vice-Chair of the Supervisory Board of the ECB, in an article published on Tuesday.

    This would lead to “elevated transition risks” for around 90 percent of these banks. In addition, around 70 percent of these banks could be exposed to an increased risk of legal disputes “as they are publicly committed to the Paris Agreement, but their credit portfolio is still measurably misaligned with it,” Elderson summarized the results of the analysis. According to the ECB, the financial institutions examined account for three-quarters of loans in the eurozone.

    ‘Only a matter of time before transition plans become mandatory’

    The transition risks for financial institutions largely result from exposures to companies in the energy sector that are lagging behind in phasing out carbon-intensive production processes and are late to adopt renewable energy production. “The economy needs stable banks particularly as it goes through the green transition,” writes Elderson.

    For banks, in turn, it is crucial to recognize and measure the risks arising from the transition to a decarbonized economy. “Transition planning must become a cornerstone of standard risk management, as it is only a matter of time before transition plans become mandatory,” Elderson warned. The ECB Banking Supervision was created in 2014 as a lesson learned from the banking and financial crisis. ECB Banking Supervision currently directly supervises 113 banks in the eurozone, which account for 82 percent of the banking market in the currency area. dpa

    • EZB
    • EZB

    Habeck: The energy transition creates 50,000 new jobs

    Germany’s Economy Minister Robert Habeck in Table.Media’s podcast studio. (Image: Marco Urban)

    The increased expansion of renewable energies in Germany is also reflected in the job market: In 2022, over 50,000 more people were employed in the sector than in the previous year, German Economy Minister Robert Habeck said on Table.Media’s German podcast Table.Today on Wednesday. That is an increase of 15 percent to 387,700 employees. “The efforts we are making in climate action are creating new added value,” said Habeck. According to the German Ministry for Economic Affairs and Climate Action, the majority of the new jobs were created in the solar energy and heat pump sectors. Biomass saw a smaller increase, while the number of jobs in wind power fell slightly despite rising expansion figures.

    Habeck also remains optimistic about the future. Northvolt’s decision to invest in a new battery factory in Germany, for example, shows that the country can keep up with the competition – albeit with massive state subsidies. “I also believe that this subsidy race is not healthy,” said the Minister in the podcast. “On the other hand, you don’t want to stand by and watch and wave goodbye when the industry leaves.” Habeck also expects high levels of investment in the hydrogen sector.

    A new study by the German Economic Institute (IW) on behalf of the Ruhr Regional Association shows that many new jobs will be created there too. The study will be published on Thursday and was made available to Table.Media in advance. According to the study, the development of the hydrogen economy will create around 8,700 new jobs in the Germany Ruhr region alone by 2023; this figure could rise to over 25,000 by 2045. In addition, the switch to hydrogen will secure thousands of existing jobs, for example in the steel industry. “If the ecological transformation succeeds, there is an opportunity to prevent the relocation of production to countries without carbon emissions trading,” said study co-author Vanessa Hünnemeyer. mkr

    • Energiewende

    Study: Conversion of 1,000 companies would bring a third of the CO2 reduction for 1.5 degrees

    The 1,000 most CO2-intensive industrial plants in the world could save around eight billion tons of CO2 annually if they were to be fully decarbonized and thus help maintain the 1.5-degree limit on global warming. Depending on the technology, this transition would require investments of between 7.5 and 10.5 trillion US dollars between 2025 and 2050 and would deliver around a third of the necessary reduction in greenhouse gases. This is the result of the “Global Carbon Restructuring Plan” study presented by management consultancy Roland Berger.

    According to the study, over three-quarters (77 percent) of emissions come from electricity generation, 18 percent from the iron and steel sector, and 3.5 percent from the oil and gas industry. Only 40 companies are responsible for over half of the emissions. According to the report, this shows the huge climate action potential of concerted action to decarbonize these main emitters. However, decarbonization plans have only been drawn up for eleven percent of the identified power plants. In Europe, half of the plants have such plans, and in the US, just under a third.

    Most of these high-emission plants are located in China (54 percent) and India (13 percent), followed by the USA (10 percent) and Europe (3 percent). This is a problem because these locations would mean that China and India would be significantly more affected by decarbonization. They would need to spend between 18 and 30 percent of their gross domestic product on this, while the USA and Europe would only have to spend between two and five percent.

    The technologies for decarbonization are

    • renewable energies are the cheapest, with costs of 7.5 trillion US dollars,
    • followed by the use of gas with 10.3 trillion;
    • the most expensive options are nuclear energy and CCS at 10.5 trillion each.

    Over 25 years, this plan would mean investments of 300 to 400 billion US dollars annually. That would be less than 20 percent of global arms spending or research and development spending (around two trillion US dollars each in 2021), the authors write. bpo

    • Dekarbonisierung

    China reboots voluntary carbon-credit market

    China has resumed voluntary trading in CO2 credits (Chinese Certified Emissions Reductions/CCER). The revised CCER system allows any company to purchase carbon credits – not just the energy companies currently participating in China’s emissions trading system (ETS). According to a conservative estimate by local investment bank Minsheng Securities, the CCER spot market could reach a volume of around 20 billion yuan (2.56 billion euros) by 2025.

    Initially, only credits for projects approved before 2017 can be traded at the China Beijing Green Exchange, as Bloomberg reports. However, approval for new projects is now expected. Accreditations for institutions for the assessment and certification of emissions are still to be issued in 2024.

    CCCERs verify climate action projects of ETS companies to offset their emissions, for example, through investments in renewables, carbon sinks, or the use of methane. Projects from solar thermal energy, offshore wind power, reforestation and mangrove restoration will also be eligible in the future.

    China launched the CCER system in 2012; between 2013 and 2017, credits were issued for 287 projects, primarily for wind energy, photovoltaics and the use of biogas in rural areas. In March 2017, China suspended issuing new credits due to low transaction volumes and a lack of standards for CO2 auditing.

    For the CCER – and the ETS – to be truly effective, China would have to set stricter emission caps, say analysts from the consulting firm Trivium China. In China’s ETS, companies are allowed to offset up to five percent of their compliance obligations using such CCERs. So far, it only covers 2530 companies in the energy sector, which were responsible for around 40 percent of Chinese emissions in 2022. It will soon be extended to eight heavy industry sectors. Since trading started in mid-2021, the average carbon price in the ETS has increased from 43 yuan per ton to 68 yuan at the end of 2023, which is equivalent to just under 9 euros. The difference to EU emissions trading, where the price at the end of the year was around 80 euros, is still considerable, and there are also frequent problems with the submitted emissions data. ck

    • China

    Heads

    Celeste Saulo – New Secretary-General of the World Meteorological Organization

    Celeste Saulo, Secretary-General of the World Meteorological Organization.

    At the start of the year, Argentinian Celeste Saulo took over as head of the World Meteorological Organisation (WMO) in Geneva. “We stand at the intersection of inequality and climate change,” the 59-year-old meteorologist repeatedly emphasizes. As the former first Deputy Secretary-General, she is very familiar with the apparatus of the UN specialized agency and was elected WMO Secretary-General six months ago by a large majority.

    Celeste Saulo is both an academic and an experienced manager. Born in the Argentinian capital in 1964, she studied meteorology at the Public University of Buenos Aires and obtained her PhD in atmospheric sciences in 1996. She continued her scientific career at the same university, where she twice headed the Department of Atmospheric and Marine Studies. After her election, she revealed that, as a mother of two children, she had to miss out on many trips abroad.

    Instead, she was committed to modernizing Argentina’s meteorological service, which she headed from 2014 to 2023. In this role, she became Argentina’s representative to the WMO, quickly becoming a member of its Executive Board and eventually becoming its first Deputy Director-General. She is now the first woman to head the WMO – 150 years after the founding of the International Meteorological Organization, the organization’s predecessor. She is now the second person from the Global South to hold the leadership position in Geneva, long the domain of Europe.

    Listening and talking to each other – that is the approach with which Saulo intends to break down internal blockades at the WMO. There was excessive competition between the departments, she explained. The exchange between the national meteorological services is one of the organization’s core tasks. However, she also wants to emphasize external cooperation, for example, with other UN organizations, NGOs, or private companies.

    Weather data for the Global South

    In times of climate change, the WMO is more important than ever – especially for the Global South: Last November, hundreds died in floods in the Horn of Africa and hundreds of thousands became climate refugees. A year ago, a long drought resulted in billions of losses for Argentinian farmers and accelerated the destruction of forests.

    The most urgent task is the comprehensive installation of early warning systems to protect the population from extreme meteorological events, “because half of the countries don’t have any”. According to Saulo, such systems work best “when they are set up from the bottom up, with the involvement of those affected and in accordance with the respective cultural context.” Data collection also needs to be expanded in many countries, she says.

    Given tight public budgets, Celeste Saulo believes that public-private partnerships are essential without giving large companies the upper hand. “Science and technology have come a long way,” she said when asked about the prospects of slowing down climate change. “When there are decisions that are sensitive to economies and economic interests, that is where the issue becomes very complex.”

    Nevertheless, Saulo is a career optimist: “Everyone can do something,” she says almost imploringly, “we are not just thinking about ourselves, but also about the fact that future generations deserve a planet worth living on.” Gerhard Dilger, Buenos Aires

    • Extremwetter

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