World Leaders Remain in Thrall to Fossil Fuel Giants

World Leaders Remain in Thrall to Fossil Fuel Giants

A series of geopolitical events have provided an opportunity for energy lobbyists to bend the ears of power, reports Thomas Perrett

The COP27 UN climate change summit is taking place in Egypt as the credibility of world leaders to accelerate divestment from fossil fuels is being widely disputed.

This year alone has seen extreme weather events intensify across the world, from Pakistan – where floods killed 1,500 people, leaving a further 10 million in need of lifesaving support – to Cuba, where a hurricane cut out power for an estimated 11 million people.

A tangible gap still exists between the pledges made by world leaders at last year’s COP26 conference and the deep cuts in emissions required to meaningfully address the climate crisis. Indeed, even if the pledges made last year are enacted, it will still lead to global warming levels of 2.5°C. As such, a report released by the UN’s Environment Agency claimed that “no credible pathway 1.5°C” had been implemented by any nation, and that only a “rapid transformation of societies” could stave off ecological collapse.

Recent research provides some insight into why so few countries have implemented substantive decarbonisation plans. According to a new report by the Corporate Europe Observatory, an organisation which documents corporate influence over EU policy making, influential fossil fuel lobbyists have convened more than 100 meetings with senior officials from the European Commission since February alone. These corporations have reportedly sought to weaken energy price caps and windfall taxes on the profits of big energy firms, as well as trying to delay effective decarbonisation measures, and to entrench reliance on domestic gas infrastructure. 

“Thanks to their oversized influence, and capitalising on divisions between EU leaders, they have been able to delay and minimise decisive political action on energy markets, which allowed them to rake in billions in profits,” the report claims, adding that “as a result, we are locked in a spiral of skyrocketing energy prices, corporate profiteering, fossil fuel addiction and climate disaster”.

Lobbying Leverage

Fossil fuel lobbyists have long played a key role in decision making within Brussels; between December 2019 and February 2022, the Commission convened more than 500 meetings with fossil fuel industry representatives.

What’s more, the outbreak of the war in Ukraine has allowed groups such as the European Roundtable for Industry (ERT) – an industry association which counts energy giants Shell, BP and Total Energies among its members – to advocate for increased gas production under the guise of ‘energy security’. Indeed, of the nine meetings convened by Commission President Ursula von der Leyen with lobbying groups since the start of the war, four were with the ERT.

The Corporate Europe Observatory report argued that the ERT “saw the energy price crisis not as an illustration of the flaws of liberalised energy markets, but as an opportunity to further extend and consolidate them”.

This view was affirmed by the Conseil de Cooperation Economique (CCE), an association of industrialists and governments from southern Europe, which met von der Leyen’s advisors in May, claiming that skyrocketing energy prices were the result of “a well-functioning electricity market” that reflected “a global supply and demand imbalance of natural gas”. 

Disputing that the structure of energy markets, which pin the prices of renewables to more expensive gas prices, were to blame for the crisis, the CCE described market intervention as a “major concern,” claiming that capping energy prices would “negatively impact investor confidence, damage market functioning (including cross-border trade), reduce security of supply and hinder a cost-effective transition to a carbon neutral economy”. 

As a result of this persistent, effective lobbying, a windfall tax on major oil and gas firms was watered down by the European Commission, which in mid-September implemented a “solidarity contribution,” from fossil fuel companies in lieu of a tax. According to Oxfam, however, six fossil fuel companies combined made enough money during the second half of 2022 to pay for the the total damage caused by climate change – including extreme weather events.

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Crisis Politics

It has also been revealed that fossil fuel firms active in influencing EU climate policy have disingenuously claimed that they would invest a share of their profits in clean energy.

BusinessEurope, also known as the Confederation of European Business, a lobby group representing companies within the EU, wrote a letter to European heads of state which claimed that the “accelerated deployment” of low carbon energy sources would be “important parts of the answer” in securing energy sovereignty following the invasion of Ukraine. 

However, such firms’ investments have run contrary to their promises. From 2010 to 2018, Shell spent just 1% of its long-term investments on low carbon energy.

Lobbying efforts, alongside a persistent avoidance of green energy action, is particularly egregious given the generous subsidies that the industry has received from governments since the pandemic. 

Indeed, a combination of government bailouts, emergency subsidies, and the European Central Bank (ECB)’s Corporate Sector Purchasing Programme has enabled these firms to accrue vast profits. Under the programme, which began in 2016, the ECB held assets from 38 fossil fuel companies, including Shell and Total, and 10 corporations active in coal production. These asset purchases by the ECB totalled €750 million in 2020.

The cynical use of the war in Ukraine to advocate for prolonged domestic fossil fuel extraction has also been a feature of major oil and gas companies’ political lobbying since the outbreak of the conflict.

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The International Association of Oil and Gas Producers (IOGP), an organisation which has been active in diluting and undermining policies intended to preserve biodiversity, met with European Commissioner for Energy Kadri Simon back in March. Discussing plans to divest from Russian gas imports, the IOGP said that its role would include “providing data and expert assessment on potential extra domestic production”.

Additionally, following von der Leyen’s meetings with the ERT, she convened a “working group of industry experts,” referred to as the EU Energy Platform Industry Advisory Group. Set up to give “insights and advice” on ensuring future energy security for the European continent, the group included representatives from Shell, Eni and TotalEnergies. According to the Corporate Europe Observatory report, the organisation, working under “an obligation of professional secrecy,” did not include any public interest groups or environmental organisations.

Even as multiple scientific reports condemn the chasm between the system change required to alleviate ecological breakdown and the meagre policies implemented by many world leaders at international conferences, lobbying groups and powerful fossil fuel companies remain an influential presence.

Repeated instances of corporate influence undermining decarbonisation efforts across the EU indicates that, as COP27 gets underway, the world leaders who profess their climate change commitments remain in thrall to the fossil fuel industry.