The Energy Insights European Gas Buyers Survey found that 90 per cent of gas buyers aim for half their energy portfolio to reach net zero by 2040, yet some are reverting to coal and 42 per cent have not finalised or begun executing their net zero plans.
Green hydrogen and biogas are viewed as potential alternatives to natural gas for 62 per cent and 60 per cent of buyers respectively. With major suppliers recently involved in M&A activity to expand their positions in biogas and biomethane, this creates an opening for gas and LNG suppliers to partner with buyers in achieving decarbonisation targets. Over a quarter (27 per cent) also see certified lower-carbon natural gas as a viable alternative, revealing latent demand for suppliers to bring back carbon-neutral LNG cargoes using offsets.
Over three-quarters of buyers are in favour of using partnerships with integrated-energy suppliers to support the energy transition, which could lead to suppliers partnering with buyers to understand and implement decarbonisation plans. With demand for new energy set to outstrip supply and few market mechanisms in the space, buyers’ access to new energy will be increasingly reliant on relationships with suppliers.
MORE FROM ENERGY & ENVIRONMENT
The report found that insecure supplies and increased prices are reducing gas consumption, with over 75 per cent of gas buyers expecting to reduce their gas usage over the next few years and 40 per cent planning to reduce consumption by over ten per cent within five years. Demand reduction will be driven largely by increased energy efficiency, followed by fuel switching.
The energy crisis has reduced service levels and flexibility over payment terms and contracts; 38 per cent have seen reduced contract flexibility and 24 per cent experienced more stringent payment terms and reduced levels of service.
In a statement, Nicholas Browne, global gas & hydrogen solution leader at McKinsey, said: “With gas buyers adopting ambitious net zero targets but lagging on implementation, there is a clear opportunity for gas suppliers to partner with buyers on navigating the energy transition. Oil and gas supermajors have been active in the M&A space to expand their roles in biogas which is among the most popular alternatives to natural gas. Suppliers could help buyers overcome decarbonisation bottlenecks by developing physical infrastructure and pressing for consistent policy support.”
The 2022 Energy Insights European Gas Buyers Survey was conducted in December 2022. The survey included 73 respondents from 15 European countries, representing experts with relevant experience in gas procurement, origination, strategy, and trading.
UK productivity hindered by digital skills deficit – report
This is a bit of a nebulous subject. There are several sub-disciplines of 'digital skills' which all need different approaches. ...