Shift fossil fuel subsidies to renewables, says lobby chief

Reuters/Fahad Shadeed

• Interview: Global Renewables Alliance CEO
• $1.4trn subsidies for fossil fuels in 2022 
• Aim to treble renewables capacity by 2030

Ramping up renewables while increasing oil output “sends the wrong signal” and is not the best way to tackle climate change, says the chief executive of Global Renewables Alliance, a policy group representing the clean energy industry. 

“Yes, the two can be done in parallel,” Bruce Douglas told AGBI at Cop28 in Dubai. “But we would not support that.” 

Douglas also calls for a scaling back of fossil fuel subsidies, with the money used to support the renewables industry instead.  

Subsidies provided for coal, oil and gas in 20 of the world’s biggest economies, the G20, reached a record $1.4 trillion last year, double the amount provided in 2019, according to an August report by the International Institute for Sustainable Development. 

This is despite world leaders agreeing to phase out “inefficient” fossil fuel financial aid at Cop26 in Glasgow two years ago. 

“We’re heading in the wrong direction,” Douglas says. “We would advocate for those subsidies to be moved to renewables, or at least for us to receive a level playing field. On that basis, we can compete [with oil and gas].”

Many of the world’s hydrocarbons producers, including Gulf nations and “Big Oil” companies, have committed to achieving net zero emissions by 2050 in line with global goals. 

Their strategies are focused mainly on the deployment of carbon reduction and carbon capture and storage technologies, as well as carbon offsetting to compensate for the emissions they generate. 

Cop28 president Sultan Al Jaber on Saturday launched an oil and gas decarbonisation charter to speed up climate action across those sectors. A total of 50 companies representing 40 percent of global oil production have signed it, with national oil companies representing over 60 percent. 

The UAE’s Adnoc, of which Al Jaber is chief executive, is among them. In July it brought forward its net zero deadline by five years to 2045, and is investing billions of dollars to cut its in-house emissions.  

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However, at the same time the UAE and other Gulf oil producers are ramping up production from next year as a new Opec+ mandate kicks in.  

Douglas wants the region to scale back hydrocarbons investment and focus on renewables instead. 

“Our call is for the twin targets of tripling renewable energy production by 2030 and doubling energy efficiency rates – which is the most effective way to decarbonise the power sector this decade,” he says.

“Of course, by doing that you will inevitably phase down and ultimately phase out fossil fuels.

“But we would say it makes more sense in the long and short term to invest in renewables, which are futureproofed, low emission and bring new opportunities to the region.” 

GRA, which represents several hundred public and private sector organisations, published a pre-Cop28 paper in October with the Abu Dhabi-headquartered International Renewable Energy Agency (Irena) and Cop28 UAE. 

The report called for renewable energy capacity to be trebled to more than 11,000 gigawatts by 2030. That goal is one of the stated ambitions of Cop28. 

Douglas says he wants to see the final negotiation drawn up by participating nations to include “clear and unambiguous text about ambition, action and accountability” when it comes to renewables. 

As well as setting targets, countries need to put in place the “long-term signals that drive investor confidence”, including accelerating planning permits – in most countries, it takes longer to permit a wind farm than it does to build it, he says – and robust regulation.

Then there needs to be a mechanism for evaluating countries’ progress against the target.

“The follow-up post-Cop28 is critical,” Douglas says. “How is this action going to be monitored, reported and reviewed?”.

Gulf nations are already taking steps to increase renewables investment and have the potential to be “global leaders in this space”, owing to their vast amounts of land and sunshine meaning they can produce renewable energy more cheaply than other countries, he says. “The UAE is a great example of a country showing leadership here.” 

Renewables costs globally have declined in recent years but Douglas expects them to plateau or increase slightly amid current high interest rates, before falling once more. 

However, he said such significant cost reductions have been achieved in the past decade that renewables “are cost competitive with fossil fuels in almost all markets. Do they actually need to be cheaper?”, he asks.