Thijs Jochems: Fossil fuels - naming, blaming, framing

August 4, 2023

^{This column was written in Dutch. This article is an English translation.}

In addition to environmental consequences, sustainability also has major political, social and economic consequences. Ignoring many of these in the sustainability discussions in order to make one's own point of view come across as 'strongly' as possible, is hardly democratic.
 
By Thijs Jochems, Advisor and Private Investor

The desire to switch to sustainable energy as quickly as possible is running up against an unruly practice. On the supply side, studies by, among others, the EU and the International Energy Agency, and from sources such as Quantum Energy, show the total infeasibility of the EU plans in the field of energy transition. The report of the European Commission 'Raw materials for strategy, technologies and sectors', published in September 2020, emphasizes the minimal position of Europe in the entire supply chain for renewable energy. Indispensable rare earth elements, lithium and cobalt, are not sufficiently available if we look at the next 10 to 15 years and probably beyond. For example, the European target that all newly sold cars must be electric by 2035 is unattainable. This would require 18 times current production of lithium and in the most optimistic mining scenarios global lithium production will be three times current by 2035. The European Commission also knows this. Nevertheless, politicians continue to repeat the transition plans. Essential Information Omitted: Trumpian Fake News?

In addition, the geopolitical aspect of the energy transition plays a role. China has a large market share of approximately 35% in all steps of the supply chain for renewable energy, but China dominates the world market in particular in the production of the indispensable refined rare earth metals, with a market share of over 80%. In other words, not only is there not enough material available for the much desired energy transition, but Europe is also exchanging its energy dependence on Russia for dependence on China for rare earth metals and other materials that are necessary for the energy transition as well as for defence, telecommunications and ICT.

If the supply of renewable energy does not increase by the desired amount in the near future, three options remain: nuclear energy, still using fossil fuels, or limiting demand. We have seen that a significant price increase as a result of the war in Ukraine immediately leads to a drop in demand. But that's in Europe. A number of countries worldwide have reached a level of prosperity from which energy consumption will rise exponentially. China is at such a tipping point. The energy consumption of that country will triple to reach the western level of prosperity. Energy is the source of prosperity. And prosperity largely determines our well-being.

This is not a plea not to force fossil fuel producers to produce more sustainably. Even though the average oil major only produces 5% of the CO2 produced by its customers, anything helps. And yes, it is rather bizarre that oil and gas producers receive sustainability subsidies. It is a pity that the focus on this pushes the fundamental issues and related choices in the social, economic and political fields into the background.

Sustainability clearly does not come for free. It looks like the energy bill will certainly not go down. That is a problem, especially for the bottom 50% of European society. A problem that cannot be concealed in our increasingly fragile democracy.

In short, transparency with clear considerations of all consequences is the only way not to remain in a crisis management mode. In order to give our hard-won democracy a better chance of survival, all parties have a moral obligation to transparently involve the broad consequences that sustainability entails in the discussion.

More columns by Thijs Jochems