Build up new global gas supply chains rather than fight over existing volumes – chancellor Scholz

Countries like Germany should endeavour to find new, additional sources of natural gas as they are trying to wean themselves off Russian supply, instead of crowding out weaker competition on the world markets, chancellor Olaf Scholz said. Competition for existing supplies “would mean massively rising prices and entire countries and world regions that could no longer afford energy,” he said at the energy industry conference BDEW Congress 2022. He called for new supply chains and energy partnerships. “Just last week, I held talks with partners in Africa on how we can support the development of a liquefied natural gas infrastructure there – and, in the long term, a hydrogen infrastructure – for example through the European Investment Bank or KfW funding.” Scholz called natural gas the “central bridge to a climate-neutral future,” even if Germany may have to resort to using more coal in the short term.

German economy and climate minister Robert Habeck warned that creating a new infrastructure for importing and using (liquified) natural gas had to be done with caution to avoid a log-in situation and stranded assets in the near future when a new energyy system based on renewable electricity and hydrogen needs to be put in place. "The price for natural gas in Germany will never be as low again as before the Ukraine war, because of that there is now a business model for ramping up hydrogen," Habeck said at the same event.

The chancellor’s plans to support countries such as Senegal to exploit fossil gas resources have come under fire, as they could contradict a pledge Germany signed at last year’s UN climate conference. The signatories to this pledge vowed to end foreign fossil fuel support by the end of 2022. Scholz had indicated that the turn of an era (Zeitenwende) brought on by Russia’s war against Ukraine meant one had to “take a new look at the world.” The chancellor now said this Zeitenwende would speed up the transition to climate neutrality.

“At its core, this turn of the energy policy era is an acceleration,” Scholz said in Berlin. Completing the energy transition, strengthening the industrial sector and decarbonising it, improving mobility and making it climate-neutral in the process have been priorities of the German government from the very beginning. “Now more than ever is the motto after Russia's attack on Ukraine.” Becoming independent of Russian energy supplies and transforming the economy would require three things: supply security is paramount, Germany has to massively expand renewables and everything must remain affordable.