Azerbaijan, the host of COP29, initiates a green energy unit, met with a skeptical response

Over 700 years ago, as Marco Polo traversed what is believed to be modern-day Baku, he marveled at “a spring from which gushes a stream of oil, in such abundance that a hundred ships may load there at once.” Azerbaijan, the birthplace of crude refining, has a deep-rooted association with fossil fuels, with oil and gas flowing consistently from the vast Caspian basin.

Despite the immense wealth brought in by fossil fuels, constituting over 90% of exports and the primary source of government revenue, Azerbaijan aims to present a different image as it prepares to host the Cop29 UN climate summit in November. The state-owned oil and gas company, Socar, recently announced the establishment of a green energy division named Socar Green, signaling investments in solar and wind projects, green hydrogen production, and carbon capture and storage (CCS).

However, skeptics question the sincerity of this move, considering Socar’s plans to expand gas output and its prior criticism for lacking an energy transition strategy. Observers wonder if it is a genuine commitment to green initiatives or merely an act of greenwashing.

Despite Azerbaijan’s limited global contribution to oil and gas production, the country heavily relies on these resources. While its oil reserves are expected to run out in approximately 25 years, gas production is projected to increase by a third in the next decade. Experts emphasize the need for a global transition plan, involving all fossil fuel-producing nations, to move away from reliance on these resources.

Socar, a government-controlled entity, plays a central role in Azerbaijan’s lucrative oil and gas operations. However, it ranks poorly in climate credentials, lacking emission reduction targets, human rights commitments, or a comprehensive transition plan. The recent creation of a green energy division is viewed with skepticism, given the limited emphasis on renewable energy activities in Socar’s accounts.

Azerbaijan’s renewable energy potential remains largely untapped, with ambitious targets set in 2020 to increase the share of renewables in the electricity mix to 30% by 2030. However, progress has been slow, with the dominance of state-owned enterprises hindering the energy transition.

As Socar seeks to enhance its green image, opinions remain divided on the sincerity of its plans. Some see it as a strategic move coinciding with Azerbaijan’s Cop hosting, while others question its leadership in the green energy sector. Despite uncertainties, the establishment of a green energy division signifies a starting point for change in Azerbaijan’s approach to renewable energy.

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