On the opening of the COP29 work in Baku, ECCO, the Italian climate think tank, presents a study on the future energy relations between Italy and Azerbaijan.
95% of Azerbaijan’s exports are oil and gas, accounting for 60% of Government revenues and 35% of GDP. European Union countries – primarily Italy – account for more than half of Azerbaijan’s total exports. Italy is Azerbaijan’s top oil destination market with 57% of oil exports and Azerbaijan is Italy’s second largest gas supplier after Algeria.
Luca Bergamaschi, ECCO co-Founding Director, says:
“EU policy is expected to lead to a 30% drop in gas demand by 2030, so gas is not a good bet for Azerbaijan’s economic future. A plan for economic diversification is urgently needed. To build a responsible partnership, the EU and Italy particularly as the largest importer of fossil fuels from Azerbaijan, should accelerate the global and regional transition to renewables. Signing new gas contracts and building new gas infrastructure is not the way to respond to the climate crisis, increase European security and support economic development.”
The study highlights the economic and political risks of the Italy-Azerbaijan of new gas dependence. It provides the following recommendations for Italy:
- betting on new gas contracts and infrastructure means risking generating stranded assets, these are investments that will be lost as no longer profitable. This would also put public capital and consumers prices at risk;
- supporting economic diversification is key to manage economic risks and create new opportunities for local development and clean energy trade through designing new forms of economic and industrial diplomacy to identify zero-emission projects as well as financial mechanisms.
Read full text “Energy relations between Italia and Azerbaigian”
Foto di Orkhan Farmanli
