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Business of climate change
Opinion
Julie Joly
Julie Joly

Eye on Asia | Asia’s investment in natural gas to wean off fossil fuels is a false solution

  • The latest IPCC report leaves no doubt that we must end our dependency on fossil fuels, so why is money being poured into natural gas projects in Asia?
  • By switching from one fossil fuel to another, we are wasting the narrow window left to transition to renewables and avoid a catastrophic rise in global temperatures

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On July 10, 2021, work is under way on the construction of a new liquefied natural gas (LNG) facility in China’s Hebei province. The Xintian project is expected to be completed by October 2024. Photo: Xinhua
Julie Joly
This month’s report from the Intergovernmental Panel on Climate Change (IPCC), in which it delivers its most unequivocal message to date on the urgency of cancelling plans for new fossil fuel infrastructure and slashing their role in the power sector, also came with the revelation that countries dependent on coal, oil and gas sought to water down the IPCC findings by including unproven solutions to the climate crisis in the report.
A similar sleight of hand is being deployed in Asia, where the transition to clean energy is being resisted by parties intent on continuing the region’s dependency on fossil fuels, especially gas.

Such false solutions jeopardise the narrowing window to implement proven measures that can help humanity avoid the catastrophic effects of a temperature increase above 1.5 degrees Celsuis, while balancing the need for social and economic development.

The most common refrain heard across the region is that gas can serve as a transitional fuel from coal, the most polluting of fossil fuels. But the argument that gas is “low carbon” is both dangerous and disingenuous, not least because the region has lined up more than US$350 billion worth of projects to expand liquefied natural gas terminals, gas-burning power plants and pipelines.

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While gas is less carbon-intensive than coal, it is still a significant source of carbon. As both the IPCC and the International Energy Agency’s Net Zero report make clear, no space remains in the global carbon budget for any new fossil fuel infrastructure, and even existing fossil fuel infrastructure needs to be phased out, starting immediately.

Switching from coal to gas will simply prolong dependence on fossil fuels far beyond what the planet can tolerate. Furthermore, it can take decades to recoup investments in these projects, creating additional resistance to the transition to renewables.

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Given the overwhelming evidence that dependency on fossil fuels must end and China’s indication that it will decrease its emissions, any new investments in gas infrastructure risk quickly becoming stranded or underutilised.

In 2020, Xi Jinping said China would aim for its carbon emissions to peak before 2030. If China means to meet this goal, it will need to quickly and drastically reduce its dependence on fossil fuels. New investments in fossil fuel infrastructure, then, are counter productive and financially risky. Price volatility is also likely to become a regular feature of global gas markets, exacerbating the economic downside of such investments.

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