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CEE needs gas as a transitional fuel

What is the role of liquid natural gas (LNG) and pipeline gas in ensuring energy security in Central and Eastern Europe? How can bio-LNG decarbonise the European Union’s heavy-duty transport sector? What is the future of gas infrastructure as the energy sector moves towards carbon neutrality? How can technological innovations facilitate green energy transition?

These and other crucial questions were pondered by the major stakeholders of the gas and LNG industry and decision-makers at the Budapest LNG Summit, the Central and Eastern European region’s leading annual gas conference.

Péter Szijjártó, Minister of Foreign Affairs and Trade of Hungary who opened the summit brought to the attention of attendees gas and nuclear energy, stressing that “while we speak about Green Deal, about our plans of how to reach 2030 and 2050, the transition period is somehow forgotten and the forms of energy in the transition period have been negatively discriminated”.

Underlining that Hungary has always supported the creation of and diversification of energy supply sources in Central and Eastern Europe, he also declared that in recent years, the game-changing energy projects that could meet the energy demand of the region have not been developed.

Péter Szijjártó, Minister of Foreign Affairs and Trade of Hungary.

“If we follow the debate about the future of the energy supply in Europe, regardless of all political aspects, sometimes naive illusions or dogmatic approach, I have to say that gas will remain the factor when it comes to the energy supply of our continent and of our own country”, he added.

“For us, the energy security of the Hungarian people, of Hungary and the Hungarian economy is a priority and that will determine our energy policy in the future. If there are other opportunities opening to increase the share of LNG in our national energy mix, we will always be open and we will always do our best in order to sign the best possible contracts”, he concluded.

For Fred Hutchison, President and CEO of LNG Allies, the US LNG Association, liquid natural gas plays a transformative role for the CEE region. As he talked about what it would take for CEE countries to ensure the secure supply of LNG, he pointed out:

“Those of us who support the gas industry have to have the courage to continue to talk about gas and why gas is important to the world today, in 2030, in 2050 […] It’s going to require gas to get us to the point where we want to go and we need to remind our policymakers in Brussels and in Washington that gas is part of the sustainable future”.

A robust regulatory framework and secure policy regimes are needed to speed up LNG gasification in Europe, according to Attila Ságodi, the Partner at Dentons Europe Consulting. “I believe that without long-term investments, there are no long-term benefits. For many years, Europe has been enjoying low prices on LNG. Constantly, over the last ten years, prices have been lower and lower […] we have been enjoying something that we did not really invest in. When we talk about a predictable future, more predictable investment strategies, incentives and regulatory regimes are needed”, he suggested.

President of ExxonMobil Europe, Philippe Ducom.

Carbon capture and storage technologies, innovation, investment at scale and the supportive policy framework is the key to the low-carbon energy transition which is the biggest challenge of our time, according to the President of ExxonMobil Europe, Philippe Ducom. “No technology on its own will help us to get there as there is no silver bullet. Predictable, stable and cost-effective policies are necessary to incentivise the development, security and investment in the field of carbon storage”.

The position of the CEE region countries and especially, Visegrád Group countries is that natural gas has an important transitional role in Europe’s energy mix, Attila Steiner, the State Secretary for the Development of Circular Economy, Energy and Climate Policy of Ministry for Innovation and Technology of Hungary pointed out at the summit.

“We would like to have such a regulatory regime which provides an opportunity that we can invest into natural gas infrastructure. We would like to avoid the situation where such infrastructure is a stranded asset”, he stressed and added, “Quite the contrary, natural gas infrastructure is a good opportunity to have an important position in the hydrogen economy in the coming decades”.

“If we consider what is the biggest climate project in Hungary, it is the transition of the existing lignite-fired power plant which is responsible for 40 per cent of Hungary’s CO2 emissions, to natural gas technology which is a quick solution”, said Mr Steiner.

Panellists representing V4 countries discussed the vital role of the cooperation between the member states of the Visegrád Group in the energy transition. They also highlighted the importance of the shift to the gas of those member states whose national energy mix is largely coal-based.

“Affordability and one-size-does-not-fit-all approach is something which we should follow. All the V4 countries, we have been cooperating very strongly” said Dora Zombori, the Ambassador-at-Large for Energy and Climate of the Ministry of Foreign Affairs and Trade of Hungary, concluding that “this energy transition should not be paid by households but should be paid by great emitters”.

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