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COP26: Nigeria vows to reach net-zero by 2060 but stresses role of gas

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COP26: Nigeria vows to reach net-zero by 2060 but stresses role of gas

Highlights

Urges financing for gas, renewable energy projects

Gas crucial for Africa due to access, poverty issues

Africa's oil and gas economies face major upheaval

  • Author
  • Eklavya Gupte
  • Editor
  • Adithya Ram
  • Commodity
  • Coal Electric Power Energy Transition Natural Gas Oil
  • Topic
  • COP26 Energy Transition Hydrogen: Beyond the Hype

Nigeria, Africa's largest oil producer, has committed to achieve net-zero carbon emissions by 2060 while underlining the importance of gas as a transition fuel, President Muhammadu Buhari said late Nov. 2 at the UN Climate Change Conference in Glasgow, Scotland.

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The commitment is in line with fellow oil producers and OPEC members Saudi Arabia and UAE, who also recently pledged to achieve carbon neutrality by 2060.

Speaking at the COP26 talks, Buhari said Nigeria was already experiencing the adverse effects of climate change but due to energy access and energy poverty issues it will rely heavily on gas for a "stable" energy transition.

"Nigeria has energy challenges for which, we believe, gas can be used to balance a renewable energy-based system, be it wind or sun," said Buhari. "This would enable us to launch the long-term renewable energy infrastructure procurements and investments needed to have a sustainable energy supply."

Demonization of gas

Buhari said for Nigeria and other African countries, gas should be embraced as "transitional fuel" and not be demonized.

However, he admitted that his country will need a lot of financial assistance to achieve this target, and he urged international leaders to help fund renewable energy and gas projects in Africa.

"I am requesting for financing of projects using transition fuels, such as gas," the president said. "Nigeria can continue to use gas until 2040 without diverting from the goals of the Paris Agreement. The country has huge reserves of the fuel, about the ninth largest in the world, that remains largely untapped."

Many financial institutions have come under pressure to reduce their funding for oil and gas businesses because of the large carbon footprint of such projects. These companies have already started to reduce their investments in oil and gas as part of their net zero carbon targets.

The crude oil exports of OPEC member Nigeria have been the mainstay of the country's economy for the past five decades. With the global shift towards cleaner, lower-carbon energy accelerated by the pandemic, Nigeria is hoping to rely more on developing its untapped gas resources.

"Gas will be key to addressing the clean cooking challenge, which is also a challenge of deforestation, and for giving our electric grid the stability and flexibility to integrate renewables at scale. Nigeria will need to integrate an unprecedented 7GW additional renewable capacity each year to achieve net-zero," he said.

This comes as Nigeria has promised new efforts to revolutionize its gas sector to help underpin economic development, as Africa's biggest oil producer looks to emerge from the pandemic-hit oil market.

With significant oil and gas reserves, Africa is expected to see a significant divestment of legacy oil and gas assets, as more energy companies pledge net-zero ambitions. This is already having an adverse impact on Africa, which still depends heavily on the energy and commodity sectors.

Slow progress

Renewable energy investments have so far been slow to take off in Africa.

There are some African solar projects on the horizon, but the infrastructure for other clean energy sources like hydrogen remain very underdeveloped.

"We are looking for partners in innovation, technology and finance to make cleaner and efficient use of all available resources to make a more sustainable transition in energy markets," added Buhari.

On May 18, Nigerian Vice President Yemi Osinbajo had also said that the "shutting off of capital in energy infrastructure" will not result in a just transition and the attitude towards natural gas needs to be looked at from an energy access and energy poverty point of view.

Earlier this year, the International Energy Agency said the world needs no more new oil and gas developments if it wants to be on the path to a net-zero emissions energy sector by 2050.

This poses an economic challenge to Africa, which is expected to emerge as a major player in gas markets as a producer, consumer and exporter with gas output in the coming decades.