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Energy

EU to push for an end to exploitation of Arctic gas, oil and coal

Move highlights dilemma over decarbonization push amid energy shortfalls

A gas processing facility, operated by Gazprom, at Bovanenkovo gas field on the Arctic Yamal peninsula. A draft strategy shows the European Union is to push for an end to the exploitation of Arctic gas, oil and coal. (Source photos by AP and Reuters) 

LONDON/BRUSSELS -- The European Union is to push for an end to the exploitation of Arctic gas, oil and coal even as energy shortages rock countries and companies across the world, according to a draft new bloc strategy for the polar region.

Brussels plans talks with partners over a possible multilateral ban on the development and purchase of hydrocarbon reserves from the Arctic, which is at the center of a growing geopolitical power struggle.

The EU commitment to keep Arctic fossil fuels in the ground highlights rising potential conflicts between the world's decarbonization agenda and rising energy shortfalls that are hitting citizens and businesses, including in Asia.

World leaders are due to meet next month at a crucial United Nations climate summit to decide the next steps to combat global warming.

"The EU will push for oil, coal and gas to remain in the ground, including in Arctic regions, building on partial moratoriums on hydrocarbons exploration in the Arctic," says the strategy draft seen by Nikkei Asia.

The document has been drawn up by the European Commission and the bloc's diplomatic service. It is due to be finalized and published this week. The strategy says Arctic fossil fuel extraction needs to stop so EU countries can meet targets in the 2015 Paris Agreement to limit temperature rises from global warming. It calls for a widening of the scope of existing curbs on Arctic fossil fuel exploration in the Arctic in areas of the U.S., Canada, and Greenland.

EU member states would have to change their behavior sharply under the new policy, since they import Arctic fossil fuels including an estimated 87% of liquefied natural gas produced in the Russian Arctic. The new strategy would not have legal force, but it would create political pressure for member states to comply.

The strategy also raises questions over European involvement in projects such as the giant Arctic LNG 2 gas project, in which France's Total has a 10% direct shareholding. A Japanese Mitsui-JOGMEC consortium also holds a 10% stake.

The European Commission said it didn't comment on allegedly leaked documents. A Mitsui spokesperson told Nikkei that the company is now confirming relevant details. Total said it would would not comment on EU policies, adding that it was committed to developing the Arctic LNG 2 project, "which is key to help decarbonize the energy mix of heavily coal-dependent Asian countries, within the framework of the applicable right."

The EU's Arctic work highlights a growing international dilemma as states grapple with energy scarcity in the run-up to November's UN climate conference in Scotland. China and India face shortages of coal, while gas prices have risen sharply as countries vie to recover economically from the coronavirus pandemic. The Arctic is a potentially rich source of fossil fuels with roughly 13% of the world's undiscovered oil and 30% of undiscovered natural gas, according to a US Geological Survey estimate.

The polar region is also fast becoming an arena for geopolitical competition. China has ramped up involvement and investment in recent years, with an eye to the opening of previously unavailable transport routes as the ice melts. Russia has stepped up military activity in the region.

The EU's "full engagement" in the Arctic is now a "geopolitical necessity," the bloc's draft policy says. It wants to use the region to cut its dependence on other countries, notably China, for some prized industrial metals. It notes the EU relies on China for 98% of rare earth metal supplies and 93% of magnesium.

The eight Arctic states -- Canada, Denmark (Greenland), Finland, Iceland, Norway, Russia, Sweden, and the U.S. -- are "potentially significant suppliers of critical and other raw materials," the draft strategy says.

"Building resilient EU value chains through sustainable raw materials extraction and processing will help the Arctic region to develop sustainably through innovation and circularity," the draft says.

The focus on Arctic metal deposits raises environmental questions of its own, given the impact of mining and the high energy inputs often required to process ores.

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