Dilemmas

The European Commission was quick to impose sanctions on Russia and Russian companies, but not on the import of Russian gas. This presented Gasunie with a major dilemma. Continuing as before was out of the question for us, but given the major social and economic consequences for security of supply, we could not suspend the service altogether either. After all, Gasunie has a statutory duty to offer transport capacity in a non-discriminatory manner. 

We ultimately decided against taking unilateral steps on top of the Dutch and European sanctions. Russian customers could therefore not be excluded from Gasunie’s networks in the Netherlands and Germany as long as they were not on the sanctions list. We did, however, decide to freeze all non-operational relations and contacts, including scientific collaboration, and to suspend our involvement in the Nord Stream Shareholders’ Committee, of which our CEO, Han Fennema, was a member. Operational contacts with Russian companies were reduced to the minimum level required to facilitate security of supply in the Netherlands and Europe through our infrastructure.

Government bodies are also setting increasingly stringent requirements for monitoring, recording and reporting methane emissions and repairing leaks. An EU methane regulation will become effective at the end of 2023, which we must comply with. It’s not yet clear what the legislation will look like, but the contours of that legislation are already visible. 

Our current policy is that we invest a maximum of € 200 to avoid the emission of one metric tonne of CO₂ equivalent (this equals 35.7kg of methane). That is about twice what an EU Allowance unit (carbon credit) is currently worth. A higher amount in the new regulation is already part of our own proposals because we want to go far to reduce our emissions and keep these very low. 

To the best of our knowledge at this time, the regulation states that we must do everything possible to reduce methane emissions and that we must repair any leaks found. Repairing small leaks costs a lot of time and money, resources that we can better spend on projects that also help others reduce their emissions and, this way, increase the overall positive impact on the climate. Moreover, we sometimes emit more methane when making repairs immediately (due to pipeline purging) than we would by sealing the leak over a longer period. And that creates a dilemma: do we comply with the law, or do we go with the best alternative for the climate? 

That natural gas does, however, come with a social price tag. The production and transport of LNG has a higher carbon footprint than pipeline gas. Furthermore, the LNG needs to be regasified before it can be fed into the GTS network, meaning its temperature of −162°C must be raised back up to atmospheric temperature, which requires a lot of energy. 

The upshot is that EemsEnergyTerminal raised our own gas consumption in 2022 by about 25%. As a result, our carbon footprint in the Netherlands (Scopes 1 and 2) also increased (+20%), while our transported volumes actually decreased (-7%). When making the investment decision, we weighed facilitating security of supply (external economic value creation) against the maximum reduction of our emissions (internal social value creation) and concluded that we had to accept the higher emissions under these circumstances.

We will have to balance considerations in this way more often in the coming years. With our energy transition projects, we enable our customers to cut their carbon emissions, but at the same time these projects mean that there is the chance that our own carbon footprint will increase during construction of the new infrastructure. In the following annual reports, we intend to provide insight into both the positive and negative impact of our transition investments.