The EBRD has thrown its weight behind a global drive to minimise energy waste and pollution by supporting an initiative to reduce gas flaring, the burning of gases in the crude oil production process.
Every year huge quantities of associated petroleum gas (APG), a by-product of crude oil extraction, are destroyed by flaring instead of being effectively utilised to produce electricity or other fuels and industrial chemicals.
The amount of wasted gas would be enough to produce the annual electricity consumption of the entire African continent. Flaring is also responsible for 350 million tonnes of CO2 emissions every year, equivalent to the emissions of approximately 80 million cars.
In order to address this serious problem which affects many of the countries where it invests, the European Bank for Reconstruction and Development (EBRD) was one of the first international financial institutions to endorse the Zero Routine Flaring by 2030 (ZRF), a World Bank-led initiative which sets the international agenda aimed at eliminating the flaring of APG.
Today the EBRD is hosting the first international workshop on the initiative at its London headquarters.
Organised by the Global Gas Flaring Reduction (GGFR) Partnership members, the seminar has brought together oil companies and governments, development institutions and technology manufacturers to agree the ZRF governance and discuss its implementation framework, to report on progress towards the planned target and strengthen cooperation among participants.
Terry McCallion, Director of Energy Efficiency and Climate Change at the EBRD, said: “In line with the Bank’s Green Economy Transition approach which focuses on resource and environmental sustainability financing, the EBRD is committed to include suitable utilisation plans for APG in its transactions in the oil upstream sector. So far, cumulatively US$ 420 million of the Bank’s investment were used for APG utilisation, leading to 2 million tonnes of annual CO2 savings.”
The EBRD is backing the commitment by the private sector and governments to invest in the efficiency of oil and gas production and cut back gas flaring.
The Bank is also supporting policy reform, helping to develop an effective regulatory framework in such areas as measuring, reporting and verification of flaring, and integration of flaring reduction policies in countries’ individual pledges on climate change (known as “Intended Nationally Determined Contributions”) made in the context of last year’s COP21 Agreement in Paris.
In the EBRD region, Azerbaijan, Kazakhstan, Russia and Turkmenistan have subscribed to the zero flaring initiative and have pledged to establish a legal framework and business environment conducive to the development of a market for the utilisation of APG. Similarly, some oil companies from the EBRD region, such as ETAP in Tunisia, have endorsed ZRF and committed to curb gas flaring.
To identify obstacles and potential investments, the Bank has commissioned technical studies in the Caspian region, in Egypt and, most recently, with funding from the southern and eastern Mediterranean (SEMED) Multi Donor Account*, in Tunisia.
These studies estimate that the total capital expenditures needed to eliminate all existing routine flaring in Azerbaijan, Egypt, Kazakhstan, Russia, Tunisia and Turkmenistan amount to approximately US$ 12.6 billion.
International cooperation among oil companies, governments and development institutions through ZRF is a positive step towards achieving these target investments.
*Donors to the SEMED Multi Donor Account include: Australia, Finland, France, Germany, Italy, the Netherlands, Norway, Sweden, Taipei China and the United Kingdom
Your email address will not be published. Required fields are marked *
Notify me of follow-up comments by email.
Notify me of new posts by email.
Sign me up for the newsletter!
Axis Bank’s prepaid Forex Card sales crosses $10 billion; an industry-first milestone
YES Asset Management receives approval to launch two mutual fund schemes
Luxury Losing the Plot to Affordable Housing?
Sanya Malhotra flags-off the ninth edition of Skechers Performance Goa River Marathon
2014 The Global Indian New Network (TGINN)