BAKU, Azerbaijan, February 26. The World Bank (WB) has recommended Azerbaijan to accelerate reforms in the field of subsidies in the fuel and energy complex (FEC) and tariffs, taking into account social protection covering vulnerable groups of population, Trend reports, referring to the WB's "Net Zero Energy by 2060: Charting Europe and Central Asia's Journey Toward Sustainable Energy Futures" report.
"Subsidies on natural gas could harm Europe and Central Asia's energy security and slow down the decarbonization process. In particular, the large volume of subsidies creates particular difficulties for countries where natural gas is virtually the only fuel used for electricity generation and heat supply (such as Azerbaijan and Uzbekistan)," WB report noted.
According to the bank's experts, effective reform in subsidies and tariffs demands meticulous long-term planning and the establishment of a social safety net for vulnerable groups. These reforms can be seamlessly integrated with decarbonization initiatives in these countries.
"In particular, investments in energy efficiency can neutralize the effects of subsidy removal by reducing household energy consumption along with improving thermal comfort in heating buildings," WB said.