Gas for Climate is a consortium consisting of ten European gas transport companies (Enagás, Energinet, Fluxys, Gasunie, GRTgaz, ONTRAS, OGE, Snam, Swedegas and Teréga) and two renewable gas industry associations (European Biogas Association and Consorzio Italiano Biogas).
The group shares the vision that renewable and low carbon gas, transported with existing gas infrastructure, can accelerate the energy transition and achieve a net zero carbon European energy system by 2050 in a cost-effective way. Gas for Climate expects the EU energy system to become fully renewable.
Gas for Climate was initiated in 2017 to analyse and create awareness about the role of renewable and low carbon gas in the future energy system in full compliance with the Paris Agreement target to limit the global temperature increase to well below 2 degrees Celsius.
The Pathways study explores ways to develop the role that renewable and low-carbon gas can plan in achieving a net-zero EU energy system by 2050, as described in the 2019 Gas for Climate study. In its central Accelerated Decarbonisation Pathway, the opportunities in the coming decade are grasped. As part of the European Green Deal, developments can be accelerated, unleashing innovation, enabling cost reductions, creating future-proof jobs, and bringing EU industry in a leading position in global markets.
The study further finds that a Current EU Trends pathway does not lead to the necessary acceleration, and that a Global Climate Action pathway brings additional cost benefits, and possibly attractive import options for products like synthetic aviation fuels.
The purpose of this study is to assess the most cost optimal way to fully decarbonise the EU energy system by 2050 and to explore the role and value of gas and its infrastructure to achieve this goal. This was done by comparing a “minimal gas” scenario with an “optimised gas” scenario.
The study analyses EU energy demand in the buildings, industry, transport and power sectors. It also includes a detailed supply and cost analysis for biomethane, including an analysis on power to methane and for green hydrogen, specifically covering dedicated renewable electricity generation to produce hydrogen. Finally, we assessed the potential role of low carbon gas—blue hydrogen or natural gas combined with carbon capture and storage (CCS) or carbon capture and utilisation (CCU).
Both the “optimised gas” scenario and the “minimal gas” scenario assume a net zero emissions EU energy system by 2050. The scenarios differ in the extent to which renewable and low carbon gas play a role in the scenarios. In the “optimised gas” scenario, renewable and low carbon gas can be used to its full potential, whereas in the “minimal gas” scenario, renewable and low carbon gas use is limited to those sectors where no alternatives are available.
The role and value of gas and its infrastructure in the most cost optimal way to fully decarbonise the EU energy system by 2050 is extensively described in the Gas for Climate study published in March 2019. The smart combination of renewable electricity and renewable gas in the various sectors is summarized below:
- Electricity production. Using renewable gas in electricity production generates significant energy system savings because it avoids costly investments in solid biomass power, in even costlier battery seasonal storage, and in electricity infrastructure.
- Buildings. Renewable gas can be used in combination with electricity in hybrid heat pumps to heat buildings that are connected to gas grids today. This reduces peak electricity demand compared to all-electric heat pumps and saves on building insulation costs.
- Transport. While direct electricity can play a dominant role in light road transport, rail and close-shore shipping, renewable gas can decarbonise long-distance heavy road transport and shipping that require energy-dense fuels.
- Industry. Finally, renewable gas can provide high temperature industrial heat and industrial feedstock, while electrification of low temperature industrial heat can decarbonize other parts of EU industry.
Today, renewable gas is expensive compared to natural gas. Renewable gas production costs are €60–100/MWh depending on the type of gas and production pathway. This is several times more expensive than natural gas with a (pre-tax) production cost of €15/MWh in Europe. In the future, this comparison no longer holds as only renewable and low carbon energy options will be compared.
Significant cost reductions are possible for renewable and low carbon gas in coming decades. The graph below shows the 2050 production costs for various routes.
On top of these costs come some €10/MWh in connection or retrofitting costs to enable renewable and low carbon gas to be transported through existing gas grids.
Recent developments indicate the potential to achieve significantly lower costs, especially for green hydrogen. These are explored in the Global Climate Action scenario of the Gas Decarbonisation Pathways 2020-2050 report .
Just as important as the future cost is to look at what the future value per unit of energy would be. The Gas for Climate study concludes that the net energy system cost savings are much higher than the production costs, as is shown below.
The societal value of renewable and low carbon gas is estimated by quantifying the energy system costs for both the “optimised gas” scenario and the “minimal gas” scenario. The energy system costs are the total financial costs of achieving a net zero energy system for society, focussing on end-user technology costs (like heating appliances), energy costs (like renewable and low carbon gas, electricity) and infrastructure costs. The difference in energy system costs between the two scenarios is the energy system costs savings. In calculating the energy system costs, Navigant takes a societal perspective, meaning that subsidies and taxes are not considered and that a social discount rate of 5% is applied.
Navigant estimates that the EU can produce a quantity of 95 bcm (about 1000 TWh) of biomethane by 2050 in a sustainable way. This potential is based on using agricultural residues and waste materials, sewage sludge, forestry and woody residues, road side verge grass, considering existing alternative uses where appropriate. The potential estimate does not include agricultural main crops produced as main crops and roundwood. Based on innovative practices by Italian farmers, Navigant assumes that it is possible to produce biomethane from sequential cropping. These are agricultural crops (e.g. maize silage, triticale, ryegrass) which are produced during winter time when land used to be fallow, using approaches that safeguard soil quality and other environmental impacts. This cultivation practice does not require additional agricultural land and therefore does not risk unwanted land use change effects. We assume that by 2050, 10% of existing EU cropland would be used for sequential cropping, leading to yields of 30% compared to summer main crops in most of the EU and 60% in southern Europe.
In international carbon accounting, biomethane has zero associated carbon emissions. The combustion of biomethane for power and heat production results in greenhouse gas emissions like those of natural gas. Yet in the process of growing the biomass feedstock, an identical quantity of CO2 is captured from the atmosphere. This means that biomethane combustion emissions have a short carbon cycle and, according to the IPCC guidelines, count as zero emissions. At the same time, emissions occur in the cultivation, processing, and transportation of biomass feedstocks. Taking these into account, the overall lifecycle greenhouse gas emission reductions of biomethane (produced in a closed anaerobic digester with off-gas combustion) compared to natural gas typically ranges from 68% with maize as feedstock, 86% with biowaste as feedstock and above 100% with manure as feedstock. In the Gas for Climate, only renewable and low carbon gases with net zero associated greenhouse gas emissions are included. This means that biomethane and hydrogen should both be net zero carbon gases. For biomethane this means that all processing related emissions need to be mitigated, and that cultivation emissions need to be mitigated where possible and otherwise fully be compensated for with negative emissions. Finally, methane leakage from biomethane transport and distribution should be eradicated.
The gas transmission and distribution (T&D) network consists of approximately 260,000 km of high-pressure network of which 200,000 km are operated (mainly) by transmission system operators (TSOs), plus approximately 1.4 million km of medium and low-pressure pipelines operated by distribution system operators (DSOs). Gas infrastructure ensures the reliability and flexibility of the energy system.
Navigant expects gas transmission and distribution networks to still have a valuable role by 2050, transporting biomethane and hydrogen. In both scenarios described in the 2019 Gas for Climate study, volumes of gas used in networks are lower in 2050 than in 2019. Still, the use of gas in existing infrastructure will be crucial for reaching binding climate goals as well as providing security of supply in the future EU energy system. Besides, it will generate significant net energy system cost benefits.
Full decarbonisation of the EU energy system in the most cost optimal way requires substantial quantities of renewable electricity in both central scenarios. Total electricity production will double, and total renewable electricity production will increase more than ten-fold compared to today, as shown in the graph below.
The Gas for Climate consortium envisions that the future energy system will be fully renewable. While unabated natural gas will be phased out, blue hydrogen produced from natural gas combined with CCS can be a scalable and cost-effective option to accelerate decarbonisation in coming years.
Green hydrogen is still expensive today, a scale-up of blue hydrogen can increase chances to keep global warming well below 2 degrees. Especially after 2030 and following a large scale-up of electricity from wind and solar-PV, blue hydrogen is being increasingly replaced by renewable green hydrogen. In the meantime, also biomethane can be significantly scaled up. By 2050 biomethane and green hydrogen will play a dominant role in the EU energy system alongside renewable electricity. This will enable the EU energy system to become fully renewable in the shortest possible timeframe.
No, not if society upfront decides not to. Blue hydrogen has a valuable role to play in the years to come as described under question 11.
The transition towards renewable and low carbon gas has started and should be accelerated. Gas for Climate members are committed to play their part in this acceleration. Support from EU and national policy makers for this energy transition and for a continued valuable role for existing gas infrastructure is important. In the Gas Decarbonisation Pathways 2020-2050 study, we arrive at the following main recommendations:
- Adapt the EU regulatory framework to make e energy system. It will be a key asset for the sustainable and cost-efficient decarbonisation of the European economy.
- Stimulate the production of biomethane and hydrogen by a binding mandate for 10% gas from renewable sources by 2030.
- Foster cross-border trade of hydrogen and biomethane, by amongst others a well-functioning Guarantee of Origin system. Clarify market rules for green and blue hydrogen including for hydrogen transport.
- Incentivise demand for hydrogen and biomethane by strengthening and broadening the EU Emissions Trading System (ETS) combined with targeted and time-bound Contracts for Difference.