Francesco La Camera has been the Director-General of the International Renewable Energy Agency (IRENA) since April 2019.
Under Francesco’s leadership the Agency has forged a series of new strategic partnerships with UN organisations including UNDP, UNFCCC and Green Climate Fund among others. A key priority of his tenure is to implement a more action-oriented approach to the Agency’s work.
Previously, Francesco served as Director-General of Sustainable Development, Environmental Damage, EU and International Affairs at the Italian Ministry of Environment, Land & Sea since 2014. Francesco held number of roles at the Italian Ministry of Environment, Land and Sea. As the national coordinator for climate, environment, resource efficiency and circular economy, he led the Italian delegation to UNFCCC’s COP 21 to 24 and the EU Presidency at COP 20. He was responsible for the preparation and organisation of Italy’s G7 Environment Presidency in 2017. He served as co-chair of the Africa Centre for Climate and Sustainable Development established in Rome in partnership with FAO and UNDP and co-chaired the Financial Platform for Climate and Sustainable Development in partnership with the Italian Development Bank Cassa Depositi e Prestiti. He has also coordinated a number of national strategies including on sustainable development, green finance and fossil fuel subsides among other things.
Francesco was a lecturer of Sustainable Development at the University of Cosenza and of Environment & Land Economics at the University of Roma 3. He is a graduate of the University of Messina in Political Sciences (Economic Policy major).
IRENA World Energy Transitions Outlook
Michael Liebreich: Before we start, if you're enjoying these conversations, please make sure that you like or subscribe to Cleaning Up. It really helps other people to find us. Cleaning Up is brought to you by the Liebreich Foundation and the Gilardini Foundation. Hello, I'm Michael Liebreich and this is Cleaning Up. My guest today is Francesco La Camera. He is an economist. He is a diplomat. And he's the Director-General of IRENA. That's the International Renewable Energy Agency. Please join me in welcoming Francesco La Camera to Cleaning Up. So, Francesco, welcome to Cleaning Up.
Francesco La Camera: Thanks for having me.
ML: So where are you at the moment? This looks like, looks like you must be in Abu Dhabi in the office. Is that correct?
FLC: Correct. It’s actually my office.
ML: Very good. And very impressive it is. You got some nice flags there. Of course, the last time we met was during COP 26.
FLC: Yeah. So that I was trying to put in focus. Yes, yes, absolutely. For sure.
ML: That's right. So we met at the Climate Action Solution Centre, which I helped to set up and I initiated this marvelous project basically involved renting a castle and having some fantastic discussions. And we met during a discussion on hydrogen, as I recall, that was our last meeting.
FLC: Yeah, absolutely.
ML: So let's do the following. The audience for Cleaning Up is very varied. A lot of them know an enormous amount about the topics, but not all of them. There's quite a few people who dip in, they're all concerned about the transition and about climate. But you might give a little bit of a background, so what is IRENA?
FLC: So IRENA is an intergovernmental entity. It’s an agency that’s now having 167 members, member countries, so it's a really global organisation. We have other 20 countries in accession. So, more or less the same membership of the UN. So, we are the only intergovernmental entity that is global, dealing with energy and naturally focusing on the energy transition based on renewables. IRENA was established 10 years ago. And the first focus was to make the case for renewables going deeper in the knowledge base product, making clear how renewables could be competitive. So, our flagship report on costs, how the energy transition based on renewables can be good for economic and social reasons. So, our publication the socio-economic impacts, the job reports, in the last year, we published together with the International Labor Organization, so, supporting country in their planning, just to give a number in the way to the COP 26, we have supported 72 countries in preparing the NDCs. So, we have and then we also started to work on scenario after Paris with our global energy transformation. And then we move to, first to renewable outlook that we published two years ago. Then we went to the energy transition outlook, the first edition was in 2021. And the second that has been published in the occasion of the Berlin Energy Transition Dialogue at the end of March. What is important that in this scenario, to be clear, we are not making forecasts, we produce scenarios. So, what we do is to working on the technologies, on the policies needed on the socio-economic impacts to get to certain result and naturally the guide for us are the Paris Agreement goals, so, the 1.5. And this is more or less our work. And now we are also trying to make a practical use if we can work use the word practical, our knowledge base our support in the planning for moving on to the ground and also facilitating the matching between the project and funding through two initiatives. One is the Climate Investment Platform that we have launched it together with UNDP SE4All and collaboration with the Green Climate Fund. And now with a new facility, the Energy Transition Accelerator Financing. So ETAF, that is an umbrella, we're already, we have been seeing the UAE committing $400 million through the Abu Dhabi Fund for Development. But we are also finalizing agreements with other entities. So we really hope that this umbrella may leverage 1 billion, more than 1 billion per year. So these are our goals. So, this just in, that in a nutshell, but naturally, if you want to go deep, I will be happy to answer your questions on what we are doing and others.
ML: Right, and there is a fantastic rabbit hole I would love to dive into, which is the difference between a forecast and a scenario. But I'm really going to control myself, you know, me, I love to go after the, you know, the fun stuff. But let's finish the nut, the in a nutshell description. How many people have you got? you talked about helping 72 countries with their NDCs. This is the nationally determined contributions, essentially, their overarching climate action plans. So, you helped 72 countries I mean, you must have thousands of people that surely means.
FLC: Millions <laugh> We have been supported by the NDC partnership to provide also with some funds on this we have been working with UNDP. And they are climate promises, promise. So we have two big allies in our work. We have 130 - 140 staff here in Abu Dhabi, we have 70 - 80 in Bonn, in our office on research & development, and then we have a small office in New York because we are observer today UN and also, we have a group of consultants that are working with us, but naturally their consultants are in some way embedded in the work of the agency. So, we privilege the relationship with the member state, just to say because you know, in supporting the country in and presenting the NDC. So, we have not done the work of the consultants usually do, we have been really working together with the country so they can really feel the ownership of what they are proposing to Glasgow, because in my assessment at the time, I was working for a government, Italian government, and the rush for Paris was perfectly good, because many countries presented the NDCs. Many of them were just the work of consultants. So, they remains in papers, the country never really owns the planning. And this is the reason we have been possibly not so ambitious. So, we could be in the implementation.
ML: Okay, so as a thumbnail, if you take the Bonn center, the New York, and the Abu Dhabi activities, and you know, the average number of consultants, are we talking about 300 or 400 people at any one time that come under your umbrella?
FLC: So, I think that's a more correct number in between 230-250.
ML: Right. 230-250. Okay, very good. And if we just go back in time to the founding, this was before you were Secretary General. So, you were, you came in after Adnan Amin, there had been a temporary Secretary General Hélène Pelosse to start with, but if I could take you back in time, because I'm familiar with some of what was going on, around the time of the founding of IRENA. What was really the kind of core reason to create it? And maybe it's the same as your mandate today, but maybe it isn't, but if you could speak to that, please.
FLC: Firstly, we have to ask the founders more than me, but as far as I can understand, it was to build a new narrative, making clear how we had to move for a cleaner energy system. I think also the Copenhagen COP, that was, I think, 2009 and that was not going very well. And there was still work on energy that was very much focusing on oil and gas. So there were not really any institution and entity that was promoting and sending, say, write down the right narrative for renewables. So, the organization in my point of view, and, you know, the country that has been supportive and push it for it was to create an entity that can build a narrative, or for a new clean energy system based on renewables. So, in some way, try to start to abandon the old centralized system based on fossil fuel in favor of a new decentralized system based on renewables, that I think that was the move. So, give another voice, an important voice to the transition to a clean energy system.
ML: And I think I'd say from my perspective, as a close spectator around that time, some part of it was frustration, at the time that the IEA was really not focusing on the renewable energies. That is the period where the IEA was suggesting they would become, you know, less than 1% of electricity kind of forever, because they were so expensive, not keeping up with the cost trends. And I was a very vocal, one of the very vocal people saying, this is totally ridiculous. And it's a self-fulfilling prophecy. Because if you say renewables will never be anything, then which sensible politician or entrepreneur or financier or corporation would really, you know, put a lot of weight behind renewables. And so, there was a lot of frustration at the time with the IEA, which, of course, today is singing a very different song. So, you know, has the original need for IRENA grown or been reduced since then?
FLC: I think that naturally, the Agency has been able to make the case for renewables. And so the confidence in our data, on our report, I think is transforming the sense of going for the renewable into a new culture, that now it‘s a culture that everyone is trying to work on it. So naturally, we have been working and say very clearly that the new energy system was going to be based largely on renewable, so dominated by renewables, and complemented by hydrogen, mainly green, and sustainable biomass bioenergy. So, we have been the first to say that we are happy that others are finally joining in on this. But at the same time, we are the ones that developed the methodologies, the models, the instruments, for going from the narrative to the concrete life. So, offering concrete solutions, concrete options to our membership is not by chance that we have been the Agency trusted by Africa to work on their continental plan. So why? Because we have models and the instrument that's been tailored to manage energy transitions and modelling reality in a way that is closer to reality itself. So, we have now been able to work on planning our World Energy Transition Outlook is going to move to Regional Energy Transition Outlook, and some kind of Domestic Transition Outlook for the very big country that may look like a continent. And this has been recognized and supported by the European Commission, and others so I think that naturally now there is a more common understanding on what could be the future energy system. But I think that the reason for having IRENA is increasing every day, because we are not, we are now in the best position in my point of view, to offer concrete solutions for the acceleration of the energy transition.
ML: Thank you for that and I certainly agree that you know, you've got a distinctive voice, some great capabilities. And I personally think that it's wonderful when more groups sort of compete for their vision, and some are better at modelling one part and some better at another. But you do get this kind of knowledge emerges as a result of that, I do have to pick you up on one thing, though, when you said we were the first to see the potential of the renewable based system. And the first to model it, of course, there was also this little company until 2009, called New Energy Finance, which was going from 2004 in many ways on the same thesis, but our thesis was, it's a complete transformation of the energy system based on clean energy, that it will require policy, but that it will also require vast amounts of private finance. But we were working on the transformation all along. And I remember also, lots of discussions we had about how much information we should share with IRENA, who would then repackage it, and give it away to your increasing numbers of members, it was quite a live debate in our sales team.
FLC: So let's put in their way that we are being the first one in intergovernmental organization that set clearly the pathway for that. And what is important, in my point of view, that when we come up with something, that is something that reflects the complexity of our membership. So, it's something that embraces everyone in our messages. So, I think it's also very, very relevant.
ML: I agree. And I think I think, to me, that's sort of forgotten in the name, International Renewable Energy Agency, that the focus is always on the renewables and so on, not on the fact that you have 167 members, which by the way, is much more than the IEA. And that you speak to governments, and far more governments at a very different level to a company, which just for clarity, I'm not an executive at Bloomberg New Energy Finance although I write for them. But that's a fantastic information provider but doesn't speak to the same constituents that you do.
FLC: That's, that's correct. This is the effect that that is the answer to your question. And at this moment, we are the only ones that have direct access to 167 Ministry of Energy or Foreign Affairs in 167 countries and <inaudible> in our accession country. So that is a unique capacity. Also for new items that are relevant for the energy transition like the mineral, the critical mineral, the rare earths,, when we talk about the green hydrogen standard, and other. The fact that the agency is global puts IRENA in the best position to work on this aspect, because it's, it's covering all the different interests, and everyone can contribute to our work, we have launched this way to work that we call collaborative framework for all the areas that are relevant for the energy transition. We are governments, stakeholders, private sector, private companies, can come and be part of the discussion, this is really a unique way to deal with all these topics, let people sharing experience, set working group going deep, have the possibility to read in advance our report, contributing to it. One of first examples that I am very proud of it, whenever you have been working for it was the first time where we are working for a paper for the G20 on offshore wind. And we have given the paper to our collaborative framework, so to all our membership to comment. So we have been able in some way to produce something for the G20 taking into account the opinion and the suggestions coming from our membership. And this is I think is absolutely unique.
ML: Thank you, let's push on the renewable energy part of your name because you also have a lot of activities, core activities, separate from these big integrative reports that you will get onto. But you've got core activities also around energy efficiency, have you not? And I think there was a collaboration with Denmark at one point, I don't know if that's still in place. But talk us through why is it called renewable energy but then you actually also do energy efficiency and kind of how do you square that circle?
FLC: You know, if you look at our general assembly, so clearly our membership refers to us not as the Renewable Energy Agency, but they refer to us as the agency that is dealing with the energy transition. But you know, names are also a brand and, and those are very difficult to change. So, changing IRENA and making it the Energy Transition Agency, I think is, is, is in some way no worth. But if you look to our work plan, what the member states asked to do, we are dealing with the energy transition. And the member stated also asked for setting, establishing this high-level forum on energy transition that we can convene every year, naturally, first year, we have a very I have to say limited edition of this high-level forum because it was going to be virtual. And by now, hopefully, if the pandemic eases, at least in here in the UAE, I don't want to say that it's because I I’m always a little bit hesitant, but we are quite good here. We can have meeting personnel, the organization, the country, the logistic, they are very good. So they're really supportive of this aspect. So, we can start to have a meeting in person, hopefully. And then we can use these high-level forum on energy transition that has been in some way asked to be established by the membership to make clear that the agency is working on all the areas of the transition.
ML: Okay, now we're going to maybe get controversial, maybe not. Because nuclear, if I look at the those big integrative reports, which summarize presumably, although they're only scenarios, not forecasts, but they do summarize, presumably your view on the transition, and they don't include nuclear. So, you've got hydrogen in there, energy efficiency, renewable energy, electrification of transportation and so on, but the one thing… and carbon capture and storage is in there, carbon removal is in there, but not nuclear. Does that respect what you're saying that this is the transition? But why be blind to nuclear?
FLC: Nuclear? It’s there. It’s 2% in 2050.
ML: I'm looking.
FLC: If you’re looking at this graph, yes, it’s not there, because it was just 2%. But if you go a little bit to the more detail, there is a 2% of nuclear.
ML: So let's move on to the World Energy Transition Outlook because you're absolutely right. And I've pulled a chart from that to do to make my baseless, as it turns out, accusation of ignoring nuclear. But that is a chart, as you say, from the World Energy Transition Outlook.
FLC: I don’t think that’s an accusation.
ML: Let's come back to the 2%. Let's talk about the transition outlook. And because that's really, you know, you can use that as a way of describing what you, how you think the transition would need to play out to get to the one and a half degrees, and you very much focused on 2030, do you not in that report?
FLC: Right, you're completely right. The reason is very simple. Because now, everyone agrees that if we don't show results, before 2030, we can forget the 1.5 and even the 2 degrees is what we say very clearly in our last World Energy Transition Outlook. So we say very clearly, we are not on track with where we should be to achieve the Paris Agreement goals. And we say if we don't change dramatically, but dramatically, our way to produce and consume energy, the 1.5 is very close to vanish and even the two degrees. And I should say that we have been very courageous to come away with that. But we base our assessment just on numbers. We couldn't make our hopes obscure the numbers; the numbers are there. They're easy to read. And just a few weeks after our report the IPCC also came with a similar conclusion. So just to give you an example, on the numbers, renewable installed capacity is breaking records year after year. In the last two years, we installed for each year 260 gigawatts. This means making five four are for renewable and one for the old generation capacity. So, it's clear where we are going. But the fact is, that if you want to get the reduction in CO2 emission that we need in 2030, we have this number to be three times more. So we need to go to 800 gigawatts starting each year from now to 2030. If we want to have hope, to stay on the 1.5-degree pathway, these are numbers it's not opinion. No? So we tried to make this message very, very strong. It has been received. But we have to see how this will unfold. Naturally, the situation, from our point of view, requires a dramatic effort.
ML: Francesco, let me push you on that though. As we speak, wind and solar had these extraordinary two decades, and I've been privileged to be an analyst over the last couple of decades watching them go from a standing start, enormous investment, enormous policy support enormous societal support. And they currently deliver something around 13%-14% of global electricity, incredible from a standing start. But since electricity is only 20% of society's energy needs, that means that really, wind and solar are only at 3%, meeting 3% of energy needs of society after these two decades. So, your transition outlook says that renewables are going to do 25% of the work. Is that realistic? I mean, should we at some point admit that for all that, we would like that to happen. We love renewables, you, and me both, the world, but it's not going to happen.
FLC: I checked the numbers when you were speaking. So as far as our numbers are said, and our numbers are the numbers, we can say that the share of renewables in electricity generation in the recent year has been 26%.
ML: Okay, but that includes that includes large-scale hydro, of course, which is not growing almost at all.
FLC: We like always to talk about renewables as a holistic system. And in our scenario is supposed to go to be 90% of the electricity generation in 2050. And the share of renewables in final energy consumption today is around 16%. And will be 79%. So, 80% in 2050. These are our numbers. Naturally, the demand is very, is the correct one, if it's realistic, to get into this path, naturally, this what we need to do. And we launch it in alarm in our last World Energy Transition Outlook, that we are really risking to lose the 1.5 perspective, shortly, or even the two degrees perspective, if we don't change dramatically, the way we produce and consume energy. That's where we are. And we think that it's still possible. The numbers show that the renewables has been breaking records year after years but not at the speed that is needed. So, we have to balance what the private can do with their investment because we need the private to go for that. We also have to be very clear on what the public can do. So surely, the public can work on the grids. Ensuring flexibility, ensuring interconnectivity, ensuring balancing of the system it’s very important to have so the public has to work with that the public has to work on building a demand for hydrogen and green hydrogen mainly. So, they have to finally adapt to the legal environment that was fitting in all system that was a centralized fossil fuel system to a decentralized system based on renewables this means that also the legal aspects of the market has to be touched and renewed. And also, when we talk about the business model has to be changed. So I'm going to speak in a few days on hydropower and green hydrogen, you know, now, we are starting once we are using hydropower for the baseloads, mainly, now, we are trying to move to a different use of hydropower trying to work on the peak load trying to work on feeding hydrogen, but the risk is that losing the baseload function can also bring for a less use of the hydropower energy itself. So, we have to work for a market that will ensure that the profitability of the hydropower remains. So, there are things that has to be changed and in the way that we organize and regulate, rule the contracts. So legal environment, business model, grid all these aspects have to be public, if we all do this, and if we also work on an international cooperation, to be more effective, and focusing on the things that need to be done. I think that we have to hope that we can we can go to and reach and achieve the Paris Agreement goals. Naturally, this is very, very difficult. This is not the height. But I think that it’s still possible.
ML: Right. And there's a lot that you say there that I endorse entirely. And I think the system nature of the problem, the fact that you need the flexibility, and that hydro will play a role and hydrogen and so on. And also the fact that you need the public sector. So the governments, the regulators, have to create the frameworks. But you'll have to forgive me if I just push back once more on this question of the scale of the problem. Because you say renewables has been breaking records. And it has but really only wind and solar that had been consistently and of course, batteries, but from an incredibly small base relative to the scale of demand of the energy system, the batteries are going to be fabulous for transportation, but they're not going to provide the sort of two three weeks of storage, or of, ride through for really weather patterns where there isn't wind and solar. So, you know, when I say wind and solar is 3%. And you correctly point out that there's other renewables, hydro, in the case of electricity, biofuels, biogas, biomass elsewhere in the system. But, you know, the fact is that society is putting a lot of weight on wind and solar, and the records and the growth is all coming from wind and solar. So I push back once more and ask, you know, is it realistic for, you know, even if you aggregate it up for renewables as a whole to go from 16%, I think you said to 78%, when the only bit that's growing, at those speeds is the wind and the solar and the rest of it really isn’t.
FLC: Naturally, you may not agree on all our numbers, but our number says it’s possible. And also making naturally the hydrogen working on complementing the move to renewables and having also a <inaudible> of the sustainable use of biomass, where we have to be very careful on ensuring the sustainability of… all these have to work together because naturally and this also in our conversation, where we start to talk, I mentioned how important could be remove possible barriers or difficulties coming from the use of minerals and for the batteries, and I think the batteries are not only to be used for the cars, but they also can be used for the storage. And we have also the hydrogen that can be used for seasonal storage. So we have to put all we have together and this as the miracle of policies, if they will work, to put all these elements together, because we see that where there are the condition, the <inaudible> money is going fast and efficiently. So we have to be able to say having as the first point of attention in our work, implementing the commitments as fast as possible. And I hope that in this respect, the COP27 in Egypt could be very important for Africa, it will be the African COP. So, we really think that this idea of doing a new deal for Africa may come there, and then we will have by the COP28, when put together East and West, South and North together. So, we have to take profit of these two elements for abandoning the negotiation mood of the COP and going for the implementation mood: action, action, action. Naturally, again, Michael, we cannot hide behind the curtain. It’s very difficult. But it‘s the race for the human race. So we have to win that race.
ML: Right. And just to be very clear, thank you for that answer. I don't suggest that the numbers don't add up that the numbers are the wrong numbers. The question is really, when you see these, you know, things have to grow by factors of three, factors of five, factors of seven, and so on. And we know how difficult that has been with planning law and all sorts of all sorts of factors holding back. That was only my I guess my question was more whether you're optimistic about achieving it or not what it is, I agree this is a perfectly good set of numbers.
FLC: Always I know that when I wrote a book, one of my books was this conclusion and say, I was figuring out something to happen and to say that if it was going to happen, the answer was yes, I hope. But I don't think in this case, I cannot distinguish between the two. And I wish to say that we can do it.
ML: My own position for it in case anybody out there amongst our audience is listening is I think we can definitely beat two degrees. So, in a sense, the Paris Agreement, well below two degrees, as long as 1.8 counts as well below, then I'm fairly optimistic. Two degrees, 1.8, something like that. 1.5? I have to admit that I'm beyond 1.5, I don’t see it.
FLC: The problem is that there is no 1.8 today.
ML: Right. And it doesn't make any difference today, the same things that you would do to get to 1.8 as 1.5. So, it's an academic discussion. But I want to come in, there's a few topics there. We talked a little bit about nuclear, because of course, there'll be lots of people out there who say this is all nonsense, because the only way of doing this is nuclear. And I don't know whether you want to comment on that, or whether we should just move on, because I don't think either of us really...
FLC: Naturally, the agency doesn't deal with nuclear, naturally. But we collect the data and everything and everything, on this our position is very simple. We say that 2030 will say if it will be possible to achieve the Paris Agreement goals or not. The 2030 we say will give us the answer. So our point is that we have to use what we have from now to 2030 to make the change happen. So, I prefer not to enter in the polemics. But if we start today to build a nuclear plant, I was in Finland a few weeks ago, where they’ve opened the new nuclear plant they built. It took 12 years. And we are talking about Finland. So a very efficient place. And the cost rose three times in 12 years. If you look at the cost of the waste recovery, and if you look to the Administrative Court in France, they said the costs are out of control. If you look at to the Administrative Court in the UK, so you must be aware about that. They say that the nuclear is not an option to fighting climate change. So these are all elements together, that let us think that probably we don't say we are not any ideological position. So, but for the time being, we have to work on the technologies that we have. There is also interesting work on fusion. Remember the distinction between fission and fusion, but so nuclear without waste. But this may come when we already know if the Paris Agreement. The question is not because it's a nominal win, the problem is to avoid the very heavy costs that may come up for not keeping the temperature, the reasonable temperature into the Paris Agreement path. So that's the reason for us, saying that, nuclear will not play a major role in this first half of the century. I don't know if this is convincing.
ML: It absolutely is in line with many of the conversations I have, I think I'm more positive about the need to continue to research, to develop. Because if you want it to play a big role in the 2030s, you have to kind of start now. But what you said is very reminiscent of at least one conversation, I nearly got into it literally, I was nearly attacked, I feel I've nearly got in a fistfight, because there was a nuclear executive on a panel that I chaired, who wanted to spend his time on the panel, not promoting his solution, one of these innovative new reactors, but he wanted to spend his time trying to persuade the audience that it was stupid to invest in wind, solar, renewables, energy efficiency, or anything else in the interim, before he even had a product. And I kind of tried to move him on from that position. And he got very angry with me. But it's the same position as we've just discussed.
FLC: <inaudible> disappointed, because if a guy acted this way, that way, I think...
ML: I want to touch if I might, on hydrogen. And then to talk about some of the current events because we're having this conversation. We've so far, we've been having it in a slightly theoretical way. And of course, there's what's going on in Ukraine is top of mind, but if we can touch on hydrogen, what role, the short version, do you see it playing between now and 2030? I mean, given your focus on 2030, that rules out nuclear, doesn't it pretty much rule out hydrogen as well?
FLC: No, no, not at all. First of all, because already hydrogen is being traded in this day. So, we have already the first ship of blue hydrogen, in this case, moving to east, so it's to Japan, to India to other countries. And you must remember that when we were together talking about the hydrogen and there were also some friends of ours that were working on that side, how the cost of hydrogen id getting lower and lower and lower. I remember, I make always the case, I hope that the people at Bloomberg will be not offended by this. But I remember that in the summer of 2020. I think Bloomberg was saying that hydrogen, with $2 per kilo was going to be competitive in 2050. Then we came the same year as IRENA say that was going to be competitive in 2030. And there were the companies represented that we had the pleasure to meet together, who were saying, look it’s already competitive now. We are exporting ammonia. In 2025 it will be the most competitive way to... So, what is important is to create the demand because now the question is not the competitiveness of hydrogen. The problem is to create the market for hydrogen, so policies have to be there naturally for lowering the cost of electrolyzer that could be okay, but mainly to create the market and create the market and supporting the industries that may move for making the change for adding hydrogen with them. So these kinds of policies are very important as are also very important that coming with standards, certification that can make the markets work more efficiently. We as IRENA we will start to work on that, naturally there are many that are working on that but we think that our global membership may provide for some product coming from us more recognition and more readiness to be accepted because the trade will be naturally a global network, global trade, we have explained in this report, you can see, Geopolitics of Green Hydrogen how we are foreseeing that the market will be more regional than the use of fossil fuel markets, because the cost will be always driven by the cost of renewables and transport. So, we see that there is a larger preference for looking at the market will be more regional, but it can have an impact and can have an impact already now. So we think that hydrogen could be some of the game changer, I think already an impact in 2030.
ML: And your certification scheme, which is very much needed for clean hydrogen, will you also extend that to certify blue hydrogen, so, hydrogen from natural gas
FLC: We are open to discuss this I will be in in Barcelona and shortly to discuss green hydrogen. And I will try to make clear that IRENA is ready to work on that. And we will see with our membership, we have a collaborative framework that is there, we already have started to collect all the data that may allow us to do this exercise. And then we will ask the membership, how far they want us to go. They already got asked to go for standard and certification. And that's when we got to the final tailoring of our reports. I think that is a good practice, that we listen to the membership.
ML: Although that will get you into a huge discussion about fugitive methane, which will open up a whole new sort of a whole new, I don't know, ball of wax, kettle of fish, whatever the saying. The methane discussion is very heated. But I want to come back to your point about we need to create the markets. I mean, look, the problem with this, you know, it's very nice, this picture of hydrogen but the fact is, there is already a huge market for green hydrogen, right. It's called the market for hydrogen, which is already about $150 billion a year. It is producing hydrogen for fertilizer and for refineries. It is all grey. It is all produced from fossil fuels. And everybody who wants to talk about hydrogen, they want to talk about one subsidized cargo of blue hydrogen that went to Japan for whatever greenwashing reasons. They don't want to talk about decarbonizing the hydrogen demand, I'm playing devil's advocate again, I apologize, but they don't want to talk about decarbonizing existing hydrogen demand. It's always some hydrogen bus or some hydrogen scooter or some hydrogen, hydrogen generation, but never decarbonizing current, polluting, emitting hydrogen. Why is that?
FLC: No. We have to be careful on what we intend for decarbonizing the existing production of hydrogen, because the way to decarbonize the producing of hydrogen is by renewables. So that’s how we have to we don't want to leave the open the door on the fact that the traditional grey hydrogen the one produced with fossil fuel can really be an option. We think that concerning the blue hydrogen that this could be an option, especially for the country that, they are exporter, exporting oil and gas, where they can maintain life in the economy through going from exporting oil and gas, with the gas with CCS, they can export blue hydrogen, and this could be any way an improvement that in transition period could be very well received, in my point of view. That's the reason we talked about CCS in our in our outlook.
ML: But if you want to replace the current grey hydrogen, which is responsible for about 2% of global emissions, if you want to replace that with green hydrogen, just to do some triangulation, some reality checks, that would require every single wind turbine and every single solar panel installed anywhere in the world to date times 1.4. So we're not going to decarbonize the existing hydrogen demand, let alone any new demand.
FLC: I’m going to respond to your question because it naturally it is a good question. We have made our hypothesis in our transition outlook, I think, I'm not sure to remember the 30% of the electricity production will go for producing hydrogen. So already there, we took into account how much electricity has to go for producing the green hydrogen. So the number that you see are already included, the part of electricity that should be used for having hydrogen and covering the 16% of the final energy consumption in 2050.
ML: I think it's another one where I'm sure the numbers add up. The question is the scale that's required.
FLC: Yeah, we have to figure out how to get there.
ML: And forgive me, like I said, I'm playing the devil's advocate, because you know, it's such a vital, vital question for so many people. So, I really appreciate that you're giving me this, you know, the, the best answers that you can on this. And I'm just conscious of time unless you want to go back to the question of hydrogen and scale. I'm just conscious of time. And I would like to ask the final question about Ukraine. And this, you know, ghastly attack, you know, on Ukraine on one of your members, frankly, by one of your other members, I suspect both of them are members of yours. Not that that's necessarily relevant. But we have this situation, it looks like, at the same time as everything you talked about in your World Energy Transition Outlook. The world is also now trying to get off Russian oil and gas on an accelerated timeframe. Now, does that speed up the transition by reinforcing the need to get off oil and gas? Or does it slow it down by distracting everybody, and forcing them to invest in oil and gas in friendly nations? Because now, it's no longer acceptable to buy it from Russia. So, there's more investment going to happen domestically in the US in Canada, in the UK, and around the world? Are we going to be putting that money into oil and gas and potentially locking ourselves in? So, Ukraine conflict: accelerator or decelerator of the transition?
FLC: That's a very good question. So naturally, in the short term, it may have an impact and not a positive impact. But immediately after, I think that it could be really an accelerator of the move to the energy transition. So naturally, we have to be very careful on this, much depends on, on, the policies that governments will put in place. We were saying, for example, talking about COVID. Now we have to spend the money to recover in a way to accelerate the transition. The fact is that the money spent for recovering from COVID, less than two digits, so less than 10% went to the energy transition. And we were all are agreeing that we have to link the short term to the long term response. Here, I think that the chance that we can go for an acceleration of the transition are more evident. And because government also where there was not a strong climate on or environmental approach to the energy transition, now, they look also to decide over the energy security. Where naturally investing in renewables may provide more independency, that's what we wrote in the report there. So how the hydrogen and renewables can play an important role for having less dependency from other countries. Today 80% of our countries are net importer of oil and gas, 80%. And naturally, they are dependent. But we have seen this along the years, from when I was a studying in the university that the price of fossil fuel has been already impacting on the way the economies were working. And so, there is a big I think understanding that going for that may show to be more resilient on different kinds of shocks. So, this will be really another, adding reason for speed up. So not only the climate aspects, and we also say that it's not only climate because it's also economy, we will have more GDP, it’s more social impact, we will have more jobs, with the energy transition and you can have more resilience in the energy system. And this could be another really strength for accelerating the path.
ML: Okay, thank you. So short term, perhaps Ukraine does distract a bit of attention and financial flows, but in the medium and longer term, then you see the two really not just for that, not just for climate, but for resilience reasons and all the social reasons, you see the two actually acting together.
FLC: Yeah, that fact is that more and more people are realizing that going for a new renewable energy, new energy system based on renewables and complementary, as we say, by hydrogen and green hydrogen mainly and sustainable biomass will ensure more resilience and supporting economic growth, employment. So, I think now, we are all very close to be convinced that that's the way.
ML: Very good. Francesco, it's been an enormous pleasure. You can see exactly I think the audience will understand exactly why you're the diplomat and I'm not. But I hope that I've helped to air some of the very difficult conversations that we have to have around these topics, around scale and speed and, and distraction from world events and so on.
FLC: Michael, I don't want to upset you, but I'm not a diplomat. I am an economist.
ML: Okay, but you did well, you have, I just know that you worked on, you know, on the Aarhus convention and yeah. You're a cross-dresser: economics and diplomacy. But above all, a fantastic advocate for renewable energy and the work of IRENA. I look forward to continuing conversations with you. You talked about Sharm El Sheikh, COP 27. And of course, COP 28, which is in the UAE, where you are right now. And hopefully we will get time to tease out these issues in more and more detail over the next couple of years. Thank you, Francesco. Thank you very, very much.
FLC: Grazie, thank you.
ML: So that was Francesca La Camera, Director General of IRENA, the International Renewable Energy Agency. My guest next week on Cleaning Up is Patrick Graichen. He's State Secretary at the German Federal Ministry of Economic Affairs and Climate Action and the former Executive Director of Agora Energiewende, which is a think tank working on the transition to clean energy. Please join me at this time next week for a conversation with Patrick Graichen. Cleaning Up is brought to you by the Liebreich Foundation and the Gilardini Foundation.