
Ref. Ares(2021)3769223 - 09/06/2021
Meeting with the Deputy Head of Cabinet
of Commissioner Lenarcic, Ms Pauwels
Introduction to IOGP (International
Association of Oil & Gas Producers)
8 January 2021
1

Introduction to IOGP
2

European Membership
57% of EU Overall Energy Demand
(Oil = 33% , Gas = 24%)
3

Low-Carbon Investments of oil&gas majors

IOGP Priorities
5

The Way Forward
Reducing our carbon
Supplying cleaner
Developing long-term
footprint
energy
solutions
Methane mitigation
Large-scale Carbon Capture
Electrification of platforms
Gas as alternative to coal
& Storage
Reduction of flaring
Renewable energies
Hydrogen
Energy efficiency
Energy services
Nature-based solutions
CO2 capture &
Low carbon liquids
Repurposing of assets
sequestration (e.g. Sleipner)
We support the EU’s objective of climate neutrality by 2050.
We call for the implementation of much-needed enabling measures to deliver on the EU climate-neutrality by 2050.
6

Take an integrated, inclusive and technology neutral
approach to tackling emissions in a cost-effective way
•
IOGP welcomes the EU’s intention to promote synergies by linking the gas and electricity markets:
•
Gases (natural gas, renewable & low-carbon hydrogen) will be
essential part of the solution to deliver the EU’s climate
objectives.
• European System Integration and Hydrogen Strategies take a holistic approach to the energy transition as they address
hard-to-decarbonise sectors and recognise the
potential of decarbonisation technologies and energy carriers beyond
electricity.
• Eurelectric study, ‘Decarbonisation Pathways,’ states that deep decarbonisation of the economy requires 50%
electrification or more, up to 60%, by 2050. This means that at least 40% of the economy will not be electrified.
Therefore, full electrification cannot be an objective in itself, as more cost-effective emission reductions
may be achieved by using low-carbon liquids and gases in hard-to-decarbonise sectors.
7

Natural gas as a “transition/enabling activity”
Already TODAY, Natural Gas:
• Can contribute to the energy transition through displacing coal (+ improving air quality and
complement renewables)
• Is 3 times cheaper than electricity (per kWh) and therefore contributes to energy affordability,
fighting against energy poverty:
Household gas prices
Household electricity prices
80 €/MWh
250 €/MWh
70 €/MWh
60 €/MWh
200 €/MWh
50 €/MWh
150 €/MWh
40 €/MWh
30 €/MWh
100 €/MWh
20 €/MWh
50 €/MWh
10 €/MWh
0 €/MWh
0 €/MWh
2010
2012
2014
2015
2016
2017
2019
2010
2012
2014
2016
2017
2019
Energy
Network
Taxes and levies
Energy
Network
Taxes and levies
Source: Trinomics presentation July 2020,
Study on Energy Prices, Costs and Subsidies and their Impact on Industry and Households
8

Natural gas in National Energy & Climate Plans (NECPs)
23 NECPs are positive to natural gas in one
or several sectors, because natural gas:
• Provides
a viable alternative fuel for transport,
reduces emissions from maritime and heavy and long-
haul road transport
• Facilitates
a shift away from coal in power generation
• Delivers
flexible power capacity to complement a
growing share of renewables
• Provides
reliable supply of heat through the seasons
•
Reduces air pollution from heating, used either directly
or in highly efficient co-generation

Focus on low-carbon
Hydrogen & CCS

“Clean” vs. renewable and low-carbon hydrogen:
Before the EU Hydrogen Strategy was published (in parallel with the ESI Strategy), it was commonly understood
that the term “clean” hydrogen refers to both renewable and low-carbon hydrogen, including hydrogen from
natural gas with carbon capture, utilisation and storage (CCUS)
However, the EU Hydrogen Strategy has changed the definition of the term
“clean” so that it now only refers
to renewable hydrogen and no longer covers low-carbon hydrogen.
• WE STRONGLY RECOMMEND the European Commission to
use the term “renewable and low-carbon”
hydrogen instead of “clean” hydrogen and to consistently refer to both renewable and low-carbon
hydrogen in all EU documents.
• An alternative could be to simply use hydrogen (without further qualifications) and to consistently refer to
hydrogen in all Commission documents.
This will ensure that all types of hydrogen which can contribute to significant GHG emissions reductions are
included.
11

Hydrogen production sources & costs compared
Source: IFPEN & SINTEF (2019) “Hydrogen For Europe” pre
Source: IEA (2019). The Future of Hydrogen
-study
12
12

Without CCUS, Paris goals are impossible to reach
• The IPCC, IEA and European Commission
foresee an important role for CCS in meeting
the Paris Agreement targets.
• Today, there are 2 large-scale CCS facilities
operating in Europe, capturing & storing 1.5
Mtpa CO2.
• To be on track for 1.5°C, one CCS facility
capturing 1.5 Mt CO2 would need to be added
every week from now until 2050.
Window of opportunity:
• Political support, but still in expert circles
• Industry understands it’s now or never
13

CCUS is important for scaling up hydrogen
IEA (2020): Global hydrogen production by technology
IEA (2020): Hydrogen production costs by production
in the Sustainable Development Scenario, 2019-70
source
The IEA’s
Sustainable Development Scenario sees global hydrogen production of
513 Mt in 2070. Over 50%
comes from electrolysis, which will require the electricity equivalent to ca. half of today’s total generation. Ca.
40% comes from fossil fuels with CCUS, resulting in the capture of 1900 Mt CO . The cost-competitiveness of
2
hydrogen will mainly depend on
the costs of gas and low-carbon electricity.
Hydrogen from natural gas with CCUS can already be produced cost-effectively and at scale.
It should be considered an integral part of the EU’s hydrogen strategy.

CCUS – More than a concept, a reality
Operating and planned
projects add up to ca.
30-60 Mtpa CO2 stored by 2030
https://www.oilandgaseurope.org/wp-content/uploads/2020/06/Map-of-EU-CCS-Projects.pdf
15

CCUS Forum
The EU should take a leading role in the development of innovative low-carbon technologies.
With a 55% GHG
reduction target for 2030, CCUS will be even more urgent.
An annual European CCUS Forum should urgently kick off in 2021 to gather CCUS actors to discuss options for
fostering CCUS projects in Europe if we want to meet the reduction targets by 2030.
A wide range of actors would benefit, including
industrial actors (e.g. natural gas, hydrogen, biomass, steel,
cement, chemicals, refining, waste)
technology and service provides in the CCUS value chain (e.g. capture
technologies, CO2 transport solutions, storage and utilisation technologies).
We urge the Commission to establish an annual European CCUS Forum in 2021, as enshrined in the
ESI strategy, as part of the Clean Energy Industrial Forum to further study options to foster CCUS
projects in Europe.
WE URGENTLY CALL ON THE ESTABLISHMENT OF THE EU CCUS
FORUM to discuss how to accelerate CCUS projects in Europe.
16

Taxonomy

The Delegated Act should clearly define “transitional
activities”
We welcome that the EU Taxonomy
Regulation introduced an additional, new
category of “transitional activities”, but
the TEG report doesn’t address them.
•
The future Taxonomy should include: "green", enabling and transitional
activities. The TEG report addresses the category "green“ (with
100gCo2e/kWh).
•
Transitional/enabling activities with its own specific Technical Screening
Criteria should be included.
•
Changes to thresholds in the section on “Manufacturing of Hydrogen”
should be introduced:
Direct GHG emissions from manufacturing of
hydrogen no more than 5.8 tCO2e/tH2.
https://www.oilandgaseurope.org/wp-content/uploads/2020/10/GN-draft-CEOs-
letter_201016_logos.pdf
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For more information please contact:
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