JUST ENERGY TRANSITIONS AND NATURAL GAS IN AFRICA: BALANCING CLIMATE ACTION AND STRUCTURAL TRANSFORMATION

This discussion paper by the African Climate Foundation examines the tension between utilizing Africa's significant natural gas resources for economic development and the risks posed by the global transition to low-carbon energy. It argues that while gas provides short-term revenue and energy security, long-term investments in gas infrastructure are increasingly risky due to falling renewable energy costs and international climate targets. The paper advocates for a shift toward renewable energy (RE) to support industrialization and electrification, provided that climate finance is scaled up.

• Africa possesses vast natural gas resources, with over 40% of global gas discoveries between 2011 and 2018 occurring on the continent. Mozambique and Tanzania specifically accounted for 24% of these global discoveries during that period.
• Investments in new gas infrastructure face high risks of becoming 'stranded assets' as global demand declines to meet climate goals. Modeling by Willis Towers Watson indicates that in a Net Zero by 2050 (NZE) scenario, 72% of existing LNG export volumes would be stranded, and new infrastructure in Tanzania and Mozambique would be 'value-destructive' regardless of fiscal terms.
• The European Union's Carbon Border Adjustment Mechanism (CBAM) threatens the trade competitiveness of fossil-fuel-dependent African economies. By levying tariffs on carbon-intensive goods like cement, steel, and fertilizers, the CBAM may penalize countries such as Algeria, Egypt, Morocco, South Africa, and Mozambique.
• There is a strategic contradiction in Europe's short-term reliance on African gas to replace Russian supplies following the invasion of Ukraine. The paper suggests African nations may act as a 'stop gap' for Europe's immediate needs while Europe simultaneously implements policies that will eventually penalize those same African producers.
• Renewable energy (RE) offers a more sustainable path for African electrification and industrialization due to falling global costs and the continent's high technical potential. RE can support the localization of green technology manufacturing by leveraging Africa's critical mineral base and could facilitate the development of green hydrogen to replace lost gas revenues.
• The transition to renewable energy in Africa is hindered by a lack of affordable finance. The IPCC suggests that financial flows must increase seven-fold to meet the continent's mitigation needs, necessitating highly concessionary climate finance and grants rather than loans.
• Gas infrastructure projects have long lead times and payback periods, often taking up to ten years to come online and 15 years to pay back. This timeline increases the risk that assets will not be profitable before global demand drops toward 2030 and 2050.

APA

African Climate Foundation (2022). JUST ENERGY TRANSITIONS AND NATURAL GAS IN AFRICA: BALANCING CLIMATE ACTION AND STRUCTURAL TRANSFORMATION. https://africanclimatefoundation.org/wp-content/uploads/2022/10/ACF-GAS-REPORT-V7.indd-final-1.pdf

Chicago

African Climate Foundation. JUST ENERGY TRANSITIONS AND NATURAL GAS IN AFRICA: BALANCING CLIMATE ACTION AND STRUCTURAL TRANSFORMATION. 2022. https://africanclimatefoundation.org/wp-content/uploads/2022/10/ACF-GAS-REPORT-V7.indd-final-1.pdf.

Wikipedia

{{cite report |author=African Climate Foundation |title=JUST ENERGY TRANSITIONS AND NATURAL GAS IN AFRICA: BALANCING CLIMATE ACTION AND STRUCTURAL TRANSFORMATION |date=August 2022 |url=https://africanclimatefoundation.org/wp-content/uploads/2022/10/ACF-GAS-REPORT-V7.indd-final-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{africanclimatefoundation2022just, author = {{African Climate Foundation}}, title = {{JUST ENERGY TRANSITIONS AND NATURAL GAS IN AFRICA: BALANCING CLIMATE ACTION AND STRUCTURAL TRANSFORMATION}}, institution = {African Climate Foundation}, year = {2022}, month = aug, url = {https://africanclimatefoundation.org/wp-content/uploads/2022/10/ACF-GAS-REPORT-V7.indd-final-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }