BAKU, Azerbaijan, Aug. 4. In the global shift towards cleaner energy sources, natural gas has emerged as a more resilient option compared to coal and oil due to its lower carbon intensity and role as a transitional fuel.
Its potential to reduce net greenhouse gas (GHG) emissions becomes significant in sectors where alternative low-carbon energy sources are operationally or economically impractical, Fitch Solutions told Trend.
Additionally, emerging markets heavily reliant on coal for energy generation face challenges in displacing it entirely while meeting their growing energy needs.
While natural gas offers advantages, it also contributes substantially to global GHG emissions, accounting for more than 20 percent of the total. The longevity of gas infrastructure, with economic lifespans spanning decades, raises concerns of potential carbon lock-in. Increased investments in gas-related projects could discourage the adoption of net-zero alternatives that are becoming more accessible and cost-competitive over time. Insufficient investment in low-carbon initiatives is currently impeding decarbonization efforts, and diverting funds to natural gas ventures risks cannibalizing other necessary capital expenditures for low-carbon solutions.
Switching from coal or oil to gas may be viable when existing infrastructure can be utilized with minimal additional investments. However, new greenfield gas projects are likely to face heightened scrutiny as the focus on sustainability intensifies. It is crucial to strike a balance between leveraging existing infrastructure for fuel switching and avoiding long-term commitments that hinder the transition to cleaner energy sources.
While natural gas plays a transitional role in the energy landscape, long-term sustainability goals and the emergence of competitive alternatives warrant careful consideration and investment allocation to avoid compromising progress towards achieving global decarbonization targets.
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