From the town of Baku’s shoreline alongside the Caspian Sea, amid eating places and excessive finish inns, Azerbaijan’s relationship with fossil fuels is apparent to see by the rigs and tankers that dot the horizon.
Azerbaijan, one of many birthplaces of the trendy fossil gasoline trade, will grow to be one other oil and fuel exporter tasked with internet hosting the annual spherical of United Nations local weather talks when delegates and world leaders descend on COP29 in Baku this November. The previous Soviet republic of 10 million folks follows the United Arab Emirates, which held the occasion final yr.
To local weather activists, nations like Azerbaijan and the UAE, depending on oil and fuel export revenues for his or her financial nicely being, are compromised diplomatic brokers. However a latest go to to Baku reveals a extra nuanced image: Azeri officers say the nation totally accepts the logic of the vitality transition and the necessity to decrease carbon emissions. The difficulty is neighbors in Europe, who’re determined to purchase extra of the nation’s fuel, want them to stay fossil gasoline producers.
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For Baku’s European clients, the precedence has been securing options to Russian fuel provides ever since Moscow’s invasion of Ukraine in 2022. This has meant tapping into rather more fuel from Azerbaijan’s fields beneath the Caspian.
Europe imported 11.8 billion cubic meters of fuel from Azerbaijan final yr and that’s anticipated to extend to 13 bcm this yr. Azerbaijan in 2022 signed a memorandum of understanding with the European Fee to double its fuel exports to Europe to twenty billion cubic meters by 2027.
There are additionally talks underway concerning the choice to pump Azeri fuel into one other pipeline that runs by way of Ukraine in a try to hold provides flowing to Europe with out shopping for from Russia. In an interview at Baku Power Week in early June, Deputy Power Minister Orxan Zeynalov stated there was no indication that European nations, Georgia or Turkey would cease shopping for its fuel.
All of this appears to fly within the face of an settlement almost 200 nations made at COP28 in Dubai final yr to section out the usage of fossil fuels. The deal was hailed as a landmark achievement, although it additionally included the caveat that fuel will probably be key to serving to nations shift to renewables.
This is a vital proviso for nations like Azerbaijan, which says it’s taking steps to inexperienced its economic system regardless of the rising demand for fossil fuels. In an interview in Baku, Mukhtar Babayev, the previous oil government who’s now atmosphere minister and president of COP29, pointed to the rising variety of hybrid and pure electrical automobiles driving across the capital, saying demand for them has grown a lot that charging is beginning to disrupt the grid.
“Now the nation has turned the economic system to inexperienced development,” he stated.
Socar, its state run vitality firm, is planning to grow to be internet zero by 2050; the federal government has signed memorandums of understanding to construct 27 gigawatts of latest wind and photo voltaic farms, stated Kamran Huseynov, deputy director on the state run Azerbaijan Renewable Power Company, in an interview. This could add greater than 3 times Azerbaijan’s complete put in electrical energy technology capability at the moment.
There are additionally speculative plans to put in a fiber optic cable to export renewable electrical energy to the European Union, whereas extra wind and solar energy can be used to create hydrogen or inexperienced ammonia for export too.
“We need to do that, it’s not like we’re being compelled by EU guidelines,” stated Zeynalov, the deputy vitality minister.
The thought is that the pipelines that run greater than 2,000 miles from Baku to southern Italy might at some point be exporting inexperienced fuel similar to e-methane to assist the European Union meet its internet zero aim.
Essentially the most controversial a part of Azerbaijan’s inexperienced technique is its plan to construct so-called good villages in areas recaptured from Armenia within the 2020 battle. Azerbaijan is hoping to signal a proper peace cope with Armenia forward of COP29, placing an finish to a battle that’s lasted for the reason that collapse of the Soviet Union greater than three a long time in the past, stated Presidential Advisor Hikmet Hajiyev.
The blending of local weather diplomacy with the bitter, usually violent, dispute with its neighbor will draw criticism, however officers say it indicators the intense intent to modify from fossil fuels to renewables over the approaching a long time.
Regardless of the inexperienced rhetoric, there’s nonetheless numerous skepticism about how a lot Azerbaijan will be capable of transition its economic system. Whereas wind and solar energy are already cheaper than many different types of electrical energy, different vitality sources it is contemplating, like hydrogen, are nonetheless within the early levels of commercialization and will probably be costly to deploy.
The federal government’s precedence is to extend pure fuel revenues as its oil earnings wanes, in accordance with Gulmira Rzayeva, a senior visiting analysis fellow on the Oxford Institute for Power Research.
“Sure, the nation is investing some huge cash in renewable vitality, however even when it begins exporting very giant quantities of renewable vitality, photo voltaic, wind, hydrogen in the long term perspective, it’ll not substitute revenues coming from fossil fuels,” she stated. “It can not, it’s unattainable.”
Furthermore, it will likely be consumers of Azerbaijan’s fuel, greater than anybody else, who could have probably the most affect on the velocity of the fossil gasoline producer’s vitality transition.
“If there’s a demand, there at all times will probably be provide. That is how the market works,” Rzayeva stated. “You possibly can’t change it.”
To contact the creator of this story:
Jess Shankleman in London at jshankleman@bloomberg.internet
