Eurogas disappointed in hydrogen target scaling back

New Eurogas president and Eni's director for global gas and LNG Cristian Signoretto told Argus of his disappointment in an apparent scaling back in EU renewable hydrogen production targets, but said that he remains confident that a cheaper pathway exists for the fuel. He called for a technologically neutral approach while demand shifts to decarbonised gas over the long term.

Do you see decarbonisation shifting to a slower pace over the next few years?

We have clear decarbonisation targets for 2050. This continues to be a challenge that the gas industry wants to meet. And if you look at delivering security of supply and affordable energy, then you end up with a system that needs molecules. Gas is obviously part of that solution.

What do you think about the apparent scaling back in the EU's 2040 impact assessment of the EU's 10mn t/yr of renewable hydrogen imports by 2030?

We are a little disappointed, but there is still a lot of work to be done on the EU's 2040 targets. We are working on our own analysis and study setting out the best way to get to the 2040 overall decarbonisation targets. We are confident it will show a cheaper and more resilient pathway to reach those targets with the help of gas molecules.

What are your key asks when the EU implements revised gas and hydrogen laws?

For the gas and hydrogen package, we are focusing on several themes such as the implementation of the methane regulation. Methane has a major impact for climate change. We need to cover methane in exporting and producing countries and also in transmission and distribution. Another theme is ensuring definitions of low carbon gases and green gases are standardised as much as possible. We believe in a technology neutral approach to decarbonisation. It is not for policymakers to choose winners.

Can the EU do more to help wean central and eastern European countries off Russian gas?

Flows have to change to phase-out Russian gas. Transmission system operators (TSOs) have already done a lot, but there are still bottlenecks on networks. Flows will change further if Ukrainian transit is phased out at the end of this year. But Europe needs to avoid regulatory barriers, such as the German storage tariffs on gas moving through to other EU countries.

On the whole, energy markets and systems have been fairly successful in overcoming the Russian crisis, in particular revising the European gas grid over 18 months to ensure gas flows are now no longer going only east to west. Another positive sign is that gas prices are very much aligned within Europe in a clear sign that the single market for gas is functioning, apparently more so than the European power market, as evidenced by the strong differentials among national markets.

Is imposing an EU methane intensity limit in 2030 not a risk for energy security?

Gas is a global business. We need to import gas. But Europe also wants gas imports that follow certain standards. There has to be correct timing and proper engagement between the EU and producing countries and we need to make sure other countries follow suit with Europe's decarbonisation target. We cannot solve all the issues on our own early on while we wait for climate leadership to possibly become a competitive advantage for Europe in the future.

Are 2030 climate and energy goals set in stone if China, India, and others do not make equivalent efforts?

European competitiveness is a very important issue, up there with defence, energy and climate change. It is not about backing down. But all other polluting countries need to be tackling climate change. Otherwise Europe runs the risk of finding itself isolated and not solving the climate issue alone.

Would a more flexible approach to CO2-neutral fuels used in internal combustion engines maintain a pathway for gas in transport?

An electric vehicle or an internal combustion engine vehicle with low carbon gas or low carbon fuel should be treated in the same way. We should take a technologically neutral approach as long as CO2 emissions are equivalent. Major shipowners are investing heavily in dual-fuel engines to also run on LNG. From a technology perspective, LNG is a route to decarbonisation in the short term. It is also a cheaper option today and will become decarbonised gas in the long term.

By Dafydd ab Iago