Europe’s push to ditch Russian natural gas is generating billions of dollars in new commitments to build a low-carbon hydrogen market.

A nearly 450% rise in gasoline prices in Europe last year made the green fuel of the future cost-competitive about a decade ahead of schedule, according to BloombergNEF. Now investment funds are joining governments and utilities in ambitious plans to make hydrogen a viable substitute for fossil fuels in manufacturing, transportation and heating.

“It’s kind of a tipping point,” said Phil Caldwell, chief executive of Ceres Power Holdings PLC, a UK-based hydrogen technology company. “You’re going to see that capital coming in on a massive scale now. There is no going back.”

Russia is ostracized on the world stage for invading Ukraine, but some of its harshest critics still need its oil and gas to keep their economies running. Europe is accelerating efforts to break that addiction, with Fortescue Metals Group Ltd. planning a $50 billion hydrogen supply chain project with German energy giant E.On SE; Norway’s Scatec ASA building a $5 billion production facility; and the investment fund Hy24 that allocates $1,600 million for infrastructure.

The case for hydrogen was already growing, mainly because of its climate benefits, but the war broadened investor interest by highlighting the need for energy security, Fortescue billionaire founder Andrew Forrest said in an interview.

“It has accelerated money flows,” Forrest said in London. “After the tanks crossed the border, there is none of that awareness in people’s minds. It is a physical, fiscal necessity.”

Some 93% of hydrogen producers, users and investors who attended a BNEF roundtable last month said they hoped the war would boost the development of the green hydrogen industry. Support for domestic production and imports from reliable sources will be key, participants said.

Green hydrogen has long been more expensive to produce than the traditional kind, which is made from natural gas in a process that releases carbon dioxide into the atmosphere.

That is starting to change. BNEF analysts found that green hydrogen, made by machines called electrolysers powered by the wind and sun, would be cost-competitive today with the fossil-fuel-based product.

“Without a doubt, the case for renewable hydrogen has improved significantly,” said Martin Neubert, chief commercial officer at Orsted A/S, which plans to produce green hydrogen for shipping giant AP Moller-Maersk A/S. Orsted is the largest developer of offshore wind farms.

Previously, that cost parity wasn’t expected until around 2030 through a combination of cheaper electrolysers and massive growth in turbine and solar panel deployment, making production cheaper.

But rising gasoline prices changed the calculus, meaning green hydrogen costs don’t need to fall that much to be competitive. Simply replacing current demand for hydrogen with the green kind in industries such as oil refining and fertilizer production could reduce the European Union’s demand for gas by 12%, according to BNEF.

At the same time, the bloc’s carbon price has nearly doubled in the last year, making emission-free gas more attractive.

“The economy is moving in favor of green hydrogen,” said Ivan Pavlovic, chief executive of French bank Natixis CIB, which is working on financing the fuel’s production. “The projects we’re looking at now seem more bankable from a financial perspective.”

However, the costs only cover part of the way. Gasoline prices could drop, returning the economy to where it was before. However, the war bolstered the political support essential to expanding the industry.

The European Union doubled its green hydrogen capacity target to 80 gigawatts by 2030, compared with less than 1 gigawatt today. The UK has just set a target of producing at least 5 gigawatts of hydrogen from electrolysers by 2030, the first time it has been so specific.

In the US, US President Joe Biden’s administration has said the infrastructure needed to increase natural gas shipments to Europe will be ready for conversion to handle hydrogen.

These projects will take years to materialize and will require a huge increase in renewable sources, but government support still gives private money the confidence to move. under management, and FiveT Hydrogen, the world’s first investor to focus exclusively on clean hydrogen.

“It’s a growth issue, it’s an ESG issue and it’s renewables at scale in countries that need it,” said Hy24 CEO Pierre-Etienne Franc. “Because of that, and because of greater certainty about the future, people are happy to make compromises.”

Danish fund manager Copenhagen Infrastructure Partners K/S initially raised €800 million ($880 million) for its first Energy Transition Fund, with plans to increase it to €2.3 billion. It recently acquired a stake in German electrolyser maker Sunfire GmbH and has agreed to buy 640 megawatts of the company’s machines for its own green hydrogen projects.

The London-listed L&G Hydrogen Economy UCITS ETF has exposure to companies with a minimum market capitalization of $200 million, including electrolyser manufacturers and hydrogen producers.

HH2E is seeking €2.7 billion to build 4 gigawatts of green hydrogen and green heat production capacity by 2030. Co-founder Andreas Schierenbeck, a former chief executive of German utility Uniper, said he is in talks with three financial investors to fundraising.

“There is a lot of money in the market,” Schierenbeck said. “Private equity firms want to invest now with early start-ups.”

8 April 2022
Roudi Baroudi

DELPHI, Greece: Russia’s invasion of Ukraine could force Europe to delay key decarbonization efforts for up to a decade, a prominent regional energy expert warned on Friday.

“They don’t have many choices left,” said Roudi Baroudi, CEO of Doha-based Energy and Environment Holding, an independent consultancy. “Unless some European countries pull out all the stops, much of the continent could soon be looking at crippling shortages, prohibitively high prices, or both.”

Now that Europe is moving to reduce imports of Russian oil and gas, he explained, some of the measures expected to reduce carbon emissions may have to be put off “for eight, nine, maybe ten years”, as would planned shutdowns of nuclear generating stations.

“The European Union will need to provide the necessary permissions in some cases, plus financing in others,” he said. “Eight to ten nuclear plants and as many as 30 coal stations slated for decommissioning will have to remain online to keep up with electricity demand, and several projects required to replace Russian gas will need to be accelerated with additional funding and/or guarantees.”

If and when gas stops flowing through pipelines from Russia, Baroudi told the conference, “it cannot be replaced by simply ordering more liquefied natural gas from Qatar, the United States, and/or other producers. Europe doesn’t have enough receiving facilities to re-gasify such huge amounts, which is why efforts to expand capacity in Germany and the Netherlands are so urgent.”

Coordinated releases of strategic oil reserves by the US and other countries are helping to contain upward pressure on crude and other energy prices, he said, but reasonable levels “cannot be maintained unless more supply makes it to market and that means oil producers –primarily OPEC but others as well – have to start pumping more.”

On yet another front, “Spain has both spare LNG receiving capacity and an undersea pipeline for imports of gas from North Africa – but very little of that can reach the rest of Europe unless and until a new pipeline connects the Iberian Peninsula to the rest of Europe via France,” said Baroudi, who has been advising companies and governments on energy policy for decades. “Paris has recently voiced new openness to that idea, but the EU can and should do more to facilitate it. It should also do more to establish an agreed route for another pipeline to carry gas from the Eastern Mediterranean to Greece and/or Turkey.”

Baroudi also argued that the EU would be wise to ensure adequate capital flows into renewables such as wind and solar. “We might have to retain fossil fuels longer than we had planned, but that’s no reason to stop funding a cleaner future,” he said. “In fact it’s a reason to move as quickly as possible.”

“The whole situation is very sad,” he added. “Ever since the Paris Agreements of 2015, and especially since the Glasgow climate summit last year, Europe had been on the right track to be ready for a decarbonized economy. But now those plans are temporarily being pushed to the back burner. Apart from the lives being lost in the fighting, the energy and economic implications will mean severe hardships across the continent and even beyond, especially for lower-income people, who are the most vulnerable as rising energy prices cause the cost of food to spike as well. So there will be hunger, too. And much of the cause is due to repeated delays in the diversification of Europe’s sources of supply. Now it finds itself scrambling to prevent an economic disaster.”

According to Bloomberg New Energy Finance estimates, the global EV fleet is set to reach 25 million by the end of the year and 20 million as soon as June. This is a huge leap in numbers from the 17,000 EVs on the road in 2010.

The speed of adoption is also running 10 years ahead of schedule. In BP’s 2016 report, it estimated that there would be 71 million battery and plug-in hybrid EVs on the road by 2035, but according to Bloomberg, this is now set to be achieved by 2025.

These figures come as part of a consistent pattern of growth: in its 2020 Global EV Outlook report, the International Energy Agency (IAE) showed that between 2018 and 2019 there was an astronomical 40% year-on-year increase in electric car sales.

Even though interest in EVs has been swirling since the early seventies – NASA’s 1971 Luna Rover ran on electricity – it’s only since 2010, when the first commercially available plug-in hybrid went on sale, that EVs have begun to grow in popularity.

This makes BNEF’s 20 million figure even more astonishing. Today there are 23 plug-in electric vehicles and 36 hybrid models available. BNEF also predicted that over the next five years passenger EVs are set to increase from 3.1 million to 14 million.

However, Europe and China are driving a lot of this progress, which slightly skews the reality of the international take-up of EVs. According to Bloomberg, of the EV sales so far, China makes up 46% of total sales, Europe 34% while North America accounts for just 15%.

But with over 1 billion cars in the world, the world’s 20 million electric vehicle fleet is just a drop in the ocean. It means that despite the astonishing increase in sales, more needs to be done to meet the ambitious climate plans that have been set out across the globe over the last year in particular.

In the UK, for example, there is now a target in place to make sure all new heavy goods vehicles are zero-emission by 2040. At COP26 in November 2021, there was also a group commitment laid out to accelerate the transition to 100% zero-emission cars and vans.

“Despite the expected rapid rise in EV sales, most countries are still not on track to bring road transport emissions to zero by mid-century,” said the BNEF report.

Nevertheless, despite further global take-up of EVs being necessary, BNEF projections still look extremely positive. Already, EVs are displacing the demand for 1 million barrels of oil every day. By 2050 this figure is set to rise to as many as 21 million barrels of oil every day.

With this week’s UN climate science report laying bare the staggering economic costs and losses already faced from climate change, an inevitable question arises: who should pay?
Within UN climate negotiations, “loss and damage” refers to the costs countries are incurring from climate-related impacts and disasters — costs that disproportionately hit the world’s poor and vulnerable who did least to cause global warming.
Drawing on more than 34,000 references from the latest scientific papers, the report released on Monday by the UN Intergovernmental Panel on Climate Change (IPCC) confirmed that economic sectors from agriculture and fishing to tourism were already being damaged.
Extreme heat has fuelled crop losses. Rising seas have turbo-charged cyclones that have razed homes and infrastructure, slashing economic growth.
And as the bills mount up, poorer countries are left with even less to spend on heath, education and infrastructure — compounding suffering.
“It’s an unending situation,” said Anjal Prakash, a lead IPCC author and research director at the Indian School of Business.
The report is likely to intensify a years-long political fight over funding to pay for climate-linked losses, ahead of the next UN climate summit, COP27, in Egypt in November.
Vulnerable countries for years have sought funding to help them shoulder these costs. So far, it hasn’t arrived, and rich nations have resisted steps that could legally assign liability or lead to compensation.
The mention of “loss and damage” in the 2015 Paris Agreement came with the caveat that it “does not involve or provide a basis for any liability or compensation”.
Last November at the COP26 climate summit in Glasgow, poor countries called for a special “loss and damage” fund to be established, but the United States and other rich nations resisted. The delegates agreed to set up a UN body to help countries address loss and damage, and to continue discussions towards making “arrangements” for funding.
But there is no clarity on where the money would come from.
“We can’t just create more talk shops when people are dying,” said Harjeet Singh, senior adviser at Climate Action Network. He said COP27 needed to establish the funding facility that developing countries, including China, had called for at COP26.
Singh and other campaigners said the IPCC report — which has been approved by nearly 200 governments — could intensify pressure on the world’s most powerful nations.
“It will help us to say that science is clear, the impacts are clearer now. So you are accountable for this, and you have to pay for this,” said Nushrat Chowdhury, a policy advisor at NGO Christian Aid.
The report’s discussion of climate losses is bolstered by recent improvements in “attribution science”, which allows scientists to confirm when climate change caused or worsened a specific extreme weather event.
Still, putting a number on the resulting losses remains contentious. For example, can climate-linked losses from a weather event be separated from losses caused by poor disaster planning? Can costs be counted for losses outside our economic systems, such as when nature is degraded or a community burial site is destroyed?
“We are still debating that in the scientific community,” said another IPCC lead author Emily Boyd, a professor at Sweden’s Lund University.
As climate disaster costs mount and UN negotiations remain stuck, some are considering other options.
“Liability and compensation have other avenues to be taken forward, which are courts,” said Saleemul Huq, an adviser to the Climate Vulnerable Forum group of 55 countries.
Sophie Marjanac, lawyer at environmental law firm ClientEarth, said the IPCC report “will generally support litigation” to address climate change.
The legal avenue faces other obstacles, however.
Last year a federal appeals court rejected New York City’s attempt to use state law to hold five oil companies liable to help compensate harm caused by global warming. The court said the regulation of greenhouse gas emissions should instead be addressed under federal law and international treaties.
“Challenges in climate change litigation are related to the law, not to do with the science,” Marjanac said. “The science has been clear, very clear for years.”

Air transport’s commitment to tackling its environmental challenges has not diminished despite the Covid-19 crisis that has decimated the global aviation industry.  On the contrary, many airlines have pledged further action by targeting net-zero emissions; by purchasing sustainable aviation fuel (SAF); retiring aged aircraft, such as the iconic Boeing 747; and investing in the latest generation of fuel-efficient planes, including the Boeing 737 MAX and Airbus A350.
The development and deployment of sustainable aviation fuel (SAF) is the biggest area of opportunity for long-term reductions in aviation emissions, according to IATA, the global body of airlines.
SAF has the capability to reduce emissions 80% on a “like-for-like” basis with Jet A-1 fuel.
Elevating the production capacity for SAF is therefore a priority for airlines. Current levels are too low, at around 0.02% of global demand, to significantly lessen emissions or to generate the economies of scale necessary to reduce costs to competitive levels. But production is beginning to increase dramatically.
In 2021, IATA estimates the production and use of between 100mn and 120mn litres of SAF — an increase of more than 50% on 2020.
SAF facilities commissioned some three to four years ago are now coming online, IATA noted. An example is the Fulcrum Sierra Biofuel plant in Reno, Nevada, in the United States, which converts solid municipal waste into SAF.
Numerous additional SAF production facilities will come online over the next four years, such that by 2025 approximately 5bn litres of SAF could be available. That, IATA says, will meet around 2% of global demand.
By 2030, projections are for SAF availability to increase to cover at least 5% of demand globally. Meeting and exceeding projections for SAF cannot be the responsibility of SAF producers and the aviation industry alone.
Governments need to set in place supportive policy frameworks, industry experts say.
The global air transport industry recently took a momentous decision to achieve net-zero carbon emissions by 2050 and ensure that flying is sustainable.
To achieve that, cost-competitive sustainable aviation fuels (SAF) should fuel the majority of aviation’s global emissions mitigation in 2050.
The industry has set out the pathway to meet its 2050 goal using a mixture of new technology, efficient operations, and improved infrastructure.
The target of reducing net CO2 by half is feasible through the aggressive deployment of SAF.
Other proposed options include the accelerated development of small, zero-emissions aircraft for short-haul operations from 2035 and the use of offsets in the interim.
These and other measures could also make it possible for the industry to meet an even more ambitious goal of net-zero carbon emissions by 2050.
It is estimated that (under the industry’s trend setting initiative CORSIA or Carbon Offsetting and Reduction Scheme for International Aviation — a global carbon offsetting scheme) aviation will have to offset 2.6bn tonnes of CO2 between 2021 and 2035.
Obviously, the aviation industry has pinned its hopes on sustainable aviation fuels, which it believes will help reduce airlines’ global emissions and industrial carbon footprint.
It is proven that SAF can cut CO2 lifecycle emissions up to 80% compared with conventional jet fuel. It uses sustainable fuel sources, which do not compete with food or water, or damage biodiversity.
Rather than being refined from petroleum, SAF is produced from sustainable resources such as waste oils from a biological origin, agri-residues, or non-fossil carbon dioxide (CO2).
Sustainable aviation fuels are currently certified by regulators for up to 50% use in commercial flights.
SAF has been around since 2008. And more than 300,000 flights have taken to the skies using SAF since 2016, according to the International Air Transport Association. More than 45 airlines now have experience with SAF.
These flights have used it blended with regular aviation — without the need for any modification of engines or aircraft — and production continues to grow.
The amount of SAF used by commercial aircraft rose 65% between 2019 and 2020, despite the devastating financial impact of Covid-19 on airlines.
IATA Director General Willie Walsh says governments must be active partners in achieving net zero by 2050. As with all other successful energy transitions, government policies have set the course and blazed a trail towards success.
“The costs and investment risks are too high otherwise. The focus must be on reducing carbon,” Walsh insists.

The teenage girls of Bhadla, near one of the world’s largest solar parks, store their books in tattered briefcases and their dreams in the essays they write between household chores.
Their remote pastoral community lost the land their animals grazed on until about a decade ago to the solar power plant in the northwestern state of Rajasthan — as well as the opportunity to work at the park due to a lack of education and skills.
Once resentful, these days Bhadla’s young women say they want to get jobs at the solar facility, reflecting emerging aspirations as India expands its renewable power capacity amid a global shift to clean energy.
“I could work in the solar park if I was educated — I could manage files in the office or do their accounts,” said Hira Bano, 18, who finished tenth grade two years ago.
“I have to study or I will be stuck in household work all my life,” said Bano, taking her books out of a briefcase gathering dust since the only village school shut more than two years ago.
Bhadla is home to one of the 52 solar parks India had approved across 14 states as of last year, in a drive to wean itself off planet-heating coal and meet a renewable energy goal of 500 gigawatts by 2030.
Sunny Rajasthan is a preferred state for building large new solar installations as it has available barren desert land that is sparsely populated, said state officials.
At 2,300 megawatts, Bhadla has the world’s largest solar farm capacity — and more parks are in the offing in Rajasthan, according to officials at the state-run Rajasthan Renewable Energy Corporation Limited (RRECL).
That is creating opportunities in a region with previously few jobs due to its extreme natural conditions and lack of water, said RRECL chairman and managing director Subodh Agarwal.
Nonetheless, Bhadla locals — pastoralists who for generations kept animals on state land they treated as their own — feel left out of the development frenzy in their backyard.
“We have lost land and livestock, so it is only education that can give us a livelihood,” said village elder Mohamed Sujawal Mehr.
“Now big companies surround us, but only a few of our men got jobs there,” he said, noting that even a security guard position requires tenth-grade schooling. “How can they hire us if we can’t read or write?”
Bhadla’s school was once an unused village accessory, as education was not seen as a priority, until the arrival of the solar park infused new life into it.
The park’s biggest operator, Saurya Urja, a joint venture of the state and infrastructure firm IL&FS, started sending two teachers to the school to hold regular classes.
One of them, Andaram Meghwal, said that when he first came to the village in 2017, the children climbed to the tops of the trees they were so afraid.
“We got students (to come in) from nearby towns to give them exposure to the world outside,” he said. “We shared stories of women achievers, the challenges they overcame.”
Bano — who had previously spent her time grazing cattle, working on the farm and fetching firewood — fell in love with science, school games and the idea of pursuing a career.
Girls were more inspired to study than boys as they had lost their main activity of grazing animals, while men could find work at the solar park, Meghwal said.
This was between 2015 and 2020, when 900,000 blue solar panels were erected on 12,000 acres, 5,500 jobs were created, and eateries and tea shops opened along a new highway.
But as the park neared completion, jobs for unqualified workers began to shrink. The plant has created about 1,100 long-term jobs to operate and maintain it over 25 years — but locals lack the technical skills needed, said Saurya Urja officials.
Sarthak Shukla, a sustainability policy consultant, said clean energy provides fewer direct jobs than thermal coal power, which employs 800 to 900 people for a 1GW plant compared with 25 to 30 at a similar-sized solar park.
In Bhadla, Ayub Khan Chooda, 35, is among those who have benefited, crediting his contract to wash 400 solar panels daily to his three tractors — which pull small water tankers along the rows — despite having studied only up to first grade.
Dadda Khatoon, 32, was also happy when her husband returned from Dubai, after six years of milking and grazing camels, and got a security guard job at the solar park for Rs8,000 ($106.30) a month.
“He is happy, healthy and we are also able to save some money,” said Khatoon, sitting with village women in the winter sun. “But I don’t seem to have a role anymore apart from cooking and feeding my family. I think I had more respect then.”
With no land left to graze their animals, Bhadla residents sold their livestock whose fodder, a bitter yellow fruit called “tumba”, now lies uneaten on the vine between the solar panels.
Women from this conservative community no longer venture out, fearing the busy highway and “the new people from cities”.
Local health workers said hypertension and diabetes have become quite common owing to the new sedentary lifestyles.
Shukla said that with a better understanding of the social and cultural impacts and the right policies, the solar sector could offer opportunities for Indian women, including training and other incentives such as health and education programmes.
Globally, women make up 32% of the renewable energy workforce compared with 22% in the oil and gas industry, according to the International Renewable Energy Agency.
Local elder Mehr loves to recall the celebrations two years ago when three girls, including Bano, passed their tenth grade, the first to do so in this village of 250 households.
“We banged plates, clapped,” he said.
But their school, which had about 100 students, shut down soon after when a disgruntled teacher submitted a report showing zero attendance — a claim disputed by villagers.
The solar firm also stopped supporting classes and shifted to a broader community focus running mobile health and veterinary clinics, according to Saurya Urja CEO Keshav Prasad.
He told the Thomson Reuters Foundation that the company backed the villagers’ demand to reopen the school, pointing to rising demand for education across villages near the solar park.
Manphool Singh, the education official overseeing Bhadla school, said he had received the requests and a government decision was pending.
“We are trying our best to open it so children can study again,” he said.
Meanwhile, the girls cook, clean and stitch together colourful pieces of cloth to make rugs for their dowries.
Drawing water from a well, Asma Khatoon, 15, said her only desire was for the school to reopen so she could sit her tenth-grade exam.
In a short Hindi essay, she wrote: “This village has too many restrictions… I want to study, become a working woman.” — Thomson Reuters Foundation

Renewable energy companies are betting that the leading contender in the race to become Japan’s next prime minister, Taro Kono, will unleash changes allowing more market access and a fairer playing field after years of neglect.
The 58-year-old has long championed more renewable supplies in Japan’s roughly $150bn electricity sector, the world’s biggest national power market outside China.
Investors have been buying renewable energy shares hoping the popular Kono wins the September 29 vote for the Liberal Democratic Party’s (LDP) next leader and — by virtue of its majority in the parliament — Japan’s next premier.
Japan’s energy mix is already undergoing change, with renewables on the rise, replacing fossil fuels which shored up power following the Fukushima nuclear disaster in 2011.
Kono, a former defence minister and scion of a political dynasty, is currently in charge of administrative reform and has clashed with the powerful industry ministry (METI), which like the steel federation, has supported a revival of the moribund nuclear sector.
“Kono has eagerly taken on deregulation over the past year, and a lot has changed. Japan’s energy shift will advance further if Kono is elected,” said Mika Ohbayashi, a director at Renewable Energy Institute founded by SoftBank Group Corp Chief Executive Masayoshi Son.
Renewable energy has also received a boost from outgoing Prime Minister Yoshihide Suga’s pledge last year to align Japan with Europe and declare a 2050 carbon neutrality target.
“The attitudes of officials at METI have drastically changed. Their attitudes toward renewable energy startups used to be rather cold, but they can’t afford to continue that stance,” said Koki Yoshino, executive officer at Japan Renewable Energy, which operates nearly 50 wind and solar power projects.
In 2018 a panel convened by Kono, who was then foreign minister, caused controversy by wading into the energy debate, normally METI’s preserve, supporting a call to get rid of nuclear power and coal while dramatically increasing renewables. Last year, Kono set up a taskforce to take down regulatory hurdles hindering Japan’s shift to renewables.
The world’s third-largest economy and fifth-biggest carbon emitter is heavily reliant on imported fossil fuels 10 years after the Fukushima catastrophe almost killed off its nuclear sector, the source of a third of Japan’s electricity before 2011.
Renewable energy is fast catching up and accounted for 22% of Japan’s energy supplies last year, meeting a recent government target a decade ahead of schedule and even contributed more than coal in one quarter.
Despite that growth, critics say METI has introduced rules that make it easy to force solar plants to shut down, known as curtailment, when supplies are abundant.
Connections for renewable projects are also being withheld at the whim of entrenched companies, Kono says on his home page where he outlines his polices.
Rules governing the use of a major transmission line that connects Japan’s main island to Hokkaido in the north need to be revised to allow more renewables into the mix, Kono says.
Electricity transmitted through the line has to be declared a day ahead of the actual transmission, making it difficult for weather-dependent renewables to use the line, which is currently underutilised, to transmit power to Tokyo, he says.
METI has increased the target for renewables to produce 36-38% of Japan’s electricity by 2030, up from 22-24%, and has set auction rules for offshore wind, one of the fast growing sectors in other parts of the world.

The ocean covers more than 70% of our planet’s surface, produces half of the oxygen we breathe, feeds billions of people, and provides hundreds of millions of jobs. It also plays a major role in mitigating climate change: over 80% of the global carbon cycle passes through the ocean. But this precious natural resource is not invincible. Despite all the benefits it affords us, the ocean today faces unprecedented man-made crises that threaten its health and its ability to sustain life on Earth.
The greatest threat to marine biodiversity is overfishing. More than one-third of global fish stocks are overfished and a further 60% are fully fished. Each year, governments around the world encourage overfishing by providing $22bn in harmful fisheries subsidies. Although these subsidies are designed to help support coastal communities, they instead prop up unsustainable and unprofitable fishing activity, depleting the very resource on which local populations’ livelihoods depend.
This problem is not new. In fact, the World Trade Organisation’s members have been trying to negotiate a deal to curb these damaging payments since 2001. World leaders reiterated their commitment to tackling the issue when they agreed in 2015 to the Sustainable Development Goals (SDGs). Under SDG 14, which aims to put a healthy ocean at the heart of the global sustainable-development agenda, leaders promised by 2020 to reach an agreement at the WTO that would reduce fisheries subsidies. But they missed the deadline, as negotiations slowed during the worst of the Covid-19 pandemic.
Research shows that if WTO members were to eliminate all harmful fisheries subsidies – the most ambitious scenario – global fish biomass could increase by 12.5% by 2050. That’s an additional 35mn metric tonnes of fish, or more than four times North America’s annual fish consumption in 2017. And this is a conservative estimate. Removing destructive subsidies really will mean more fish in the sea.
The aim is not to remove support from fishing communities, but rather to redirect it in a more meaningful and less damaging way. Even if a deal does not eliminate all harmful subsidies, it would create a global framework of accountability and transparency for subsidy programmes. That, in turn, would spur dialogue between governments, fishing communities, and other stakeholders to spur the development of redesigned policies that better support fisherfolk while protecting our global commons.
Moreover, an agreement is within reach – if the political will is there to deliver it. The most recent lapse of the negotiations resulted from differences over how to structure flexibility in subsidy regimes for developing countries, as well as how to define and enforce rules on illegal fishing and sustainable stocks. But after numerous proposals and discussions, the comprehensive draft now on the table combines measures to curb harmful subsidies with specific exceptions for developing countries.
With the start of the WTO’s 12th Ministerial Conference in Geneva just days away, now is the moment for a deal. Failure to conclude one would not only harm the ocean and the livelihoods of those who depend upon it, but also would diminish the global rules-based system and damage the pursuit of the 2030 Agenda for Sustainable Development. In contrast, ending harmful fisheries subsidies would reduce the cumulative pressures on the ocean and increase its resilience in the face of climate change.
In the wake of the UN Climate Change Conference (COP26) in Glasgow, governments must demonstrate their willingness to use every tool at their disposal to tackle the climate crisis. The stakes at the upcoming WTO Ministerial Conference have perhaps never been higher. The future of multilateral trade co-operation is at risk; but, above all, jobs, food security, and the health of our global commons are on the line.
That is why 33 former government leaders and ministers from around the world have joined forces with nearly 400 scientists in urging WTO members to “harness their political mandate to protect the health of the ocean and the well-being of society.”
Governments have given their word that they will curb destructive fisheries subsidies. Next week’s meeting in Geneva will test the credibility of that pledge.
This commentary is also signed by: Axel Addy – Minister of Commerce and Industry of Liberia (2013-18); Mercedes Araoz – Prime Minister of Peru (2017-18) and Vice-President of Peru (2016-2020); Hakim Ben Hammouda – Minister of Economy and Finance of Tunisia (2014-15); Herminio Blanco – Minister for Trade and Industry of Mexico (1994-2000); Maria Damanaki – European Commissioner for Maritime Affairs and Fisheries (2010-14); Eduardo Frei Ruiz-Tagle – President of Chile (1994-2000); Michael Froman – US Trade Representative (2013-17); Tim Groser – Minister of Trade of New Zealand (2008-2015); Enrique V Iglesias – President of the Inter-American Development Bank (1988-2005); Hilda Heine – President of the Marshall Islands (2016-2020); Ban Ki-moon – UN Secretary-General (2007-2016); Ricardo Lagos – President of Chile (2000-06); Pascal Lamy – Director-General of the WTO (2005-2013); Roberto Lavagna – Minister of Economy of Argentina (2002-05); Cecilia Malmstrom – European Commissioner for Trade (2014-19); Peter Mandelson – European Commissioner for Trade (2004-08); Sergio Marchi – Minister of International Trade of Canada (1997); Heraldo Munoz – Minister of Foreign Affairs of Chile (2014-18); Pierre Pettigrew – Minister for International Trade of Canada (1999-2003), Minister of Foreign Affairs of Canada (2004-06), Tommy Remengesau, Jr. – President of the Republic of Palau (2001-09, 2013-2021); Jose Luis Rodríguez Zapatero – Prime Minister of Spain (2004-2011); José Manuel Salazar – Minister of Foreign Trade of Costa Rica (1997-98); Susan Schwab – US Trade Representative (2006-09); Juan Somavia – Director-General of International Labour Organisation (1999-2012); Alberto Trejos – Minister of Foreign Trade of Costa Rica (2002-04); Allan Wagner – Minister of Foreign Affairs of Peru (1985-88, 2002-03, 2021); Andres Velasco – Minister of Finance of Chile (2002-06); Ernesto Zedillo Ponce de León – President of Mexico (1994-2000); and Robert Zoellick – US Trade Representative (2001-05). – Project Syndicate

• Helen Clark is a former prime minister of New Zealand (1999-2008). Arancha González is a former foreign minister of Spain (2020-21). Susana Malcorra is a former foreign minister of Argentina (2015-17). James Michel is a former president of the Republic of Seychelles (2004-2016).