Weekly Highlights | From Gazprom cutting off gas supplies to Warren Buffet new climate challenge

1. Outsprinting the energy crisis​

By McKinsey & Company

• European energy markets are experiencing an unprecedented shock. The upward price pressures come from a confluence of long-term trends and current events, including shifts in sentiment among customers and investors, carbon pricing, the post-COVID-19 surge in global demand, and, most recently, the conflict in Ukraine

• In energy-intensive industries, these extraordinary increases are having a profound impact on production costs, which have risen by almost 50 percent in some sectors. The situation is likely to be prolonged. Futures markets are pricing European gas at twice or three times their 2021 levels for at least the next three years. Companies in these sectors face an urgent need for action

• In this environment, two groups of short-term moves could create significant value for big energy users: a new approach to energy procurement and a radical focus on energy efficiency and decarbonization

2. Macron’s win is good news for climate, but much depends on the next vote​

By Energy Monitor

• In April 2022, French President Emmanuel Macron stood before a crowd in southern France and promised to take climate change more seriously if he was re-elected

• Macron was the greener choice in the second round, but that was a low bar given that his opponent’s main environmental pledge was to dismantle wind turbines. Surveys have shown that the environment is one of French voters’ main priorities, but Le Pen spoke little about it

• The fear was that green-minded voters who opted for Melenchon in the first round would stay home in the second round. To win them over, Macron made a new promise: to make France “the first major nation to abandon gas, oil and coal”

3. Inside the new $100 million women-led climate tech fund​

By GreenBiz

• Voyager Ventures last week announced a $100 million fund focused on early-stage climate tech companies. The size alone is impressive for an inaugural fund, and its backing includes many big names in tech and investing

• The fund is supported by a suite of investors and partners across the corporate, climate tech and environmental worlds. This includes past or present CEOs of General Electric, Lyft and Shopify, as well as Lowercarbon Capital’s Chris Sacca. The Nature Conservancy has also joined as an investor and partner, bringing its scientific rigor to the fund

• The fund’s focus is on companies that can be foundational to systemic decarbonization across mobility, energy, materials, food, the built environment, analytics, industrial systems and carbon removal

4. Earth Day: 5 ways we’re working to repair the damage to our planet​

By United Nations

• “This triple crisis is threatening the well-being and survival of millions of people around the world. The building blocks of happy, healthy lives, are in disarray, putting the Sustainable Development Goals in jeopardy”, the UN Secretary-General warns in a video message for Earth Day 2022

• United Nations outlined 5 ways to follow to restor our ailing earth, among which it is suggested to: converting coal mines into carbon sink, and restoring ecosystem connectivity

• Other suggested ways to follow are: transplanting ‘survivor’ coral fragments; restoring watersheds affected by the climate crisis in the Andes, and restoring carbon absorbing seagrass

5. Gazprom Cuts Gas Supplies To Poland And Bulgaria​

By Forbes

• Russian energy giant Gazprom halted gas supplies to Poland and Bulgaria over their failure to pay for gas in rubles, the state-owned company announced on Wednesday

• Gazprom threatened to cut European gas supplies further if Poland or Bulgaria - which host pipelines supplying gas from Russia to a number of other countries - take supplies meant for other countries

• Bulgarian energy minister Alexander Nikolov criticized the decision as a breach of contract as Bulgaria has already paid for Russian gas deliveries for April, according to Sky News and Reuters

6. Warren Buffett Faces Renewed Climate Change Challenge by Investors​

By The New York Times 

• Russian energy giant Gazprom halted gas supplies to Poland and Bulgaria over their failure to pay for gas in rubles, the state-owned company announced on Wednesday

• Gazprom threatened to cut European gas supplies further if Poland or Bulgaria - which host pipelines supplying gas from Russia to a number of other countries - take supplies meant for other countries

• Bulgarian energy minister Alexander Nikolov criticized the decision as a breach of contract as Bulgaria has already paid for Russian gas deliveries for April, according to Sky News and Reuters

7. How the energy crisis is a boon for hydrogen exporters​

By WoodMac

• Global investment in low-carbon hydrogen supply is ramping up: there were 75 new project announcements in Q1, totalling 11.1 mmtpa of new capacity - closely to a quarterly record - where the US dominated with 51% of the total projects

• Q1 2022 saw an intriguing shift with green hydrogen projects accounting for 95% of those added to the project pipeline, with blue hydorgen just 5%. The slowdown in blue hydrogen investment will set alarm bells ringing for CCS developers

• Electrolyser vendors are moving quickly to build “gigafactory”-scale facilities with a project backlog of 45 GWel whereas current manufacturing capacity will only support 14 GWel annually by 2023

8. What It Will Take to Reap the Rewards of Renewable Fuels​

By BCG

• According to BCG estimates, the demand for renewable fuels could push the industry’s cumulative global margin pool - the total worldwide profits from each stage of the value chain - into the range of $100 billion to $160 billion annually in the coming decade

• Furthermore, without taking corrective action, the portion of total global emissions that is attributable to the aviation industry could grow from 2% to 3% to as much as 20% by 2050

• In the US, the Biden administration has made it a goal to boost annual Sustainable Aviation Fuel (SAF) use to 3 billion gallons by 2030, the equivalent of 10% of total US jet fuel consumption

9. Hydrogen investor roadmap: leading the way to net zero​

By GOV.UK

• An Hydrogen investor roadmap has just been released by the UK government, as part of a series of roadmaps to be published for each sector of the Prime Minister’s Ten Point Plan, demonstrating how the UK is delivering on its green commitments

• The roadmap reflects the significant increase in the UK’s hydrogen ambition, since the government doubled its ambition up to 10GW of low carbon hydrogen, with the intention that at least half of this will be from green hydrogen

• Increasing this ambition could mobilise over £9 billion of private investment - an increase of £5 billion relative to 5GW ambition - and support over 12,000 jobs by 2030

10. Oil Market Report - April 2022​

By IEA

• IEA estimate for global oil demand has been lowered by 260 kb/d for the year versus last month’s Report due to severe new lockdown measures in China, and demand is now expected to average 99.4 mb/d in 2022, up by 1.9 mb/d from 2021

• Futures prices for ICE Brent were trading at around $104/bbl as this Oil Market Report went to print, down nearly $10/bbl following IEA collective stock release actions and a massive US release from the strategic petroleum reserve

• Global oil supply rose in March by 450 kb/d to 99.1 mb/d, led by non-OPEC+, and Russian oil supply is expected to fall by 1.5 mb/d in April, with shut-ins projected to accelerate to around 3 mb/d from May