The transition from burning fossil fuels and the large-scale emitting of carbon dioxide and other harmful gases to renewable energies needs to happen as quickly as the industry can manage, independent financial think tank Carbon Tracker Initiative founder and executive chairperson Mark Campanale stated this week.

During a September 23 webinar hosted by marine and energy lifecycle solutions company Wärtsilä, he suggested that businesses involved in the energy sector, particularly those using or producing fossil fuels, needed to quickly align themselves with the Paris Agreement, which falls within the United Nations Framework Convention on Climate Change (UNFCCC).

The Paris Agreement’s central aim is to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 ^oC above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 ^oC.

According to the UNFCC, the agreement also aims to increase the ability of countries to deal with the impacts of climate change and to ensure finance flows are consistent with a low greenhouse-gas emissions and climate-resilient pathway.

“To reach these ambitious goals, appropriate mobilisation and provision of financial resources, a new technology framework and enhanced capacity-building are to be put in place, thus supporting action by developing countries and the most vulnerable countries, in line with their own national objectives,” the UNFCCC states.

The agreement also provides for an enhanced transparency framework for action and support.

Campanale said that aligning a business’s objectives with the Paris Agreement would help them move with the most recent technological shifts, especially within the energy sector.

However, he noted that some businesses would not be “winners” in their efforts to meet these goals as some “incumbents tend to struggle in the face of technological challenges”.

That considered, he pointed out that major oil and gas companies had managed to reduce their fossil fuel focus and output, while also increasing new renewable or green energy solutions or services.

One such example is Ørsted, formerly Dansk Naturgas and Denmark’s State-owned oil and gas company. In recent years, the company transformed itself into a renewable energy company.

As such, Campanale said, Ørsted was a “complete renewable energy company – this is a terrific case study.”

However, he also noted that Ørsted was a rare exception of a company that got the clean energy revolution right and said other companies may not be so lucky in transforming themselves.

But, for those looking to adapt, he said, traditional fossil companies have the requisite expertise in their engineering departments and intellectual property, as well as technological capacity and balance sheets to undertake measures to transform themselves in whatever manner they can.

Nevertheless, a concerning trend taking place in the energy sector is what Campanale said was the “dash for gas” in which some energy companies were looking to changing from heavily polluting fossil fuels, to less heavily polluting fossil fuels, including gas as a means to reduce their emissions.

In terms of adopting gas, he said, the trend would be merely transitory. “I think there is a lot of overcapacity that is built, particularly for liquid natural gas. It is hugely capital intensive, [and] it will never make the return on capital that the businesspeople think it will, those that are promoting it.”

In terms of solutions and the path forward, businesses looking to adopt green energy solutions should look into green hydrogen, Campanale suggested.

“I think that the displacement of natural gas with hydrogen and the blending of hydrogen into the energy mix, particularly for heating is going to be vitally important.

“We are not against the oil and gas companies; we are against the burning of fossil fuels and emitting of carbon dioxide emissions. We have to be getting off that as quickly as we can. If, in the meantime, such large emissions producers can find alternative business models like hydrogen, then lets welcome that,” he stated.