The ongoing battle against climate change stands as one of the foremost issues in global politics today. Nations worldwide, including Kazakhstan, are actively formulating strategies aimed at curbing emissions and mitigating adverse environmental effects, with a shared goal of achieving carbon neutrality.

In our discussion with Alessandro Lanza, the Executive Director of Fondazione Eni Enrico Mattei, a distinguished research centerfocused on energy and environmental studies, we delve into the intricate aspects of achieving success in decarbonization. The conversation explores the crucial role played by technology in attaining decarbonization goals and scrutinizes the essential actions required to address and surmount this challenge.

QG: Dear Mr. Lanza, good afternoon. Let me on behalf of the Qazaq Green Association, thank you for today’s meeting and the opportunity for this interview. You are the head of the Enrico Mattei Foundation. In this regard, could you tell us about the activities of the foundation and what place the issues of sustainable development and energy transition have in your organisation’s work?

Alessandro Lanza: Thank you very much for this opportunity. It’s a pleasure to be here to talk with you. Our institution, which in Italian is called the “Fondazione Eni Enrico Mattei”, a foundation created by-and named after the name of the founder of- Eni, Enrico Mattei in 1989. So, it’s not new and, since the very beginning, it has been devoted to the study, from an economic perspective, of energy and economics. So, basically our people are economists mainly focused on econometrics, modelling etc. and, consequently, the foundation is not a technical institution of engineers or other professionals, but of economists. This means that we study prices, markets, and the ways in which markets need to be constructed. This is our primary function. There are about 100 research projects underway now and we also publish books, this is our principal focus.

QG: Great. Well, today we see and feel how climate change negatively affects the economy. Problems arising in agriculture, a fall in crop yields, regions suffering due to drought, the populations enduring abnormal temperatures in summer. In this regard, ecology has already become a part of economic policy at both global and national levels. But what does energy transition mean, and why it is important for climate change?

Alessandro Lanza: Climate change is definitely the key issue, because it is the most serious threat that humanity will have to face in the next, let’s say, half century. The current condition of the Earth is not good. We can see this also in this country. You can probably see this too. The average of the temperature of today is below the normal average for this season. But it’s also true for Rome, Milan and in Europe in general. The concentration of CO2 emissions in atmosphere, is the real problem we need to face. In this respect, energy transition is the key, the only solution, but, of course, it’s expensive. And it’s a question of policy effort and political coordination. As you may know in two weeks’ time there will be the next climate conference in Dubai, the so-called COP 28 and, as you can see from the number, this means it is the 28th such meeting.

We will be there, and progress is being made. But it’s very complex: a technically complex, and politically very complex story. And what we expect in the next few years is more movement, because as we said, the energy transition is the key. Of course, we need to move from fossil fuels to non-fossil fuels. Of course, no one can think that it’s possible to move from fossil fuels to non-fossil fuels overnight. This is not only impossible, it’s not even desirable. What we know for sure is that there is no single solution that fits all the problems for every country in the world. So, we need to find national solutions for countries like this one, which is full of natural resources in terms of fossil fuels, but there is potentially even more that can be done. You need to keep developing non-fossil fuel related energy. This is something that needs to be done in the coming years. The next half century will be absolutely crucial for the future of the earth. This may sound too alarmist, but I’m absolutely convinced that what we have seen in the last six months is a very complex situation. And governments need to take the situation very seriously.

QG: Yes. So, one of the goals for this century is carbon neutrality. Consequently, in the process of achieving carbon neutrality, the decarbonization of the energy sector has a critical role. In Kazakhstan, about 70% of electricity is produced from coal and about 6% from renewable sources. In Italy the situation is different, 47% of electricity production is produced by gas, 37% from renewable sources and about 10% by coal. Nevertheless, the energy crisis has had a really painful impact on many countries. Indeed, also the Italian economy suffered from dependence on fossil sources. In your opinion, is a faster transition to low carbon energy sources possible? And is it actually possible to achieve carbon neutrality within the time frames set by many countries? In other words, the 2050s for Italy and the 2060s for Kazakhstan, for example.

Alessandro Lanza: OK, carbon neutrality is a political statement. It’s a target, and an ambitious one as we move towards carbon neutrality. I do not think it is feasible for many countries to reach carbon neutrality. The problem is that we need to move collectively towards neutrality. So, in some countries, such as Italy for example, that has more gas, we have more or less eliminated coal which is the fossil fuel with highest CO2 content. As you probably know, natural gas has a very significant role in Italy. In general countries need to move from fossil fuels to non-fossil alternatives and, where possible, in the interim, to choose between fossil fuels, for example gas rather than coal., given that the carbon content of natural gas per unit of energy is lower.

Here in your country I see that there are many investments in renewables which is good. Also because, generally speaking this country has an enormous potential endowment in terms of natural resources such as hydro, solar, and wind. Consequently, in around 10 years’ time it’s probable that your country will have changed its path. But the problem is that we need to move now, there is no time to waste on four other COPs. We have already had 28. It’s time to stop talking and do things, because we already know what has to be done.

For countries around the world - G7 countries, non-G7 countries, the industrialised and the non-industrialised world, developing countries - everywhere we need to consider the threat, the very serious threat posed by climate change. The recently published New World Energy Outlook by the International Energy Agency provides all the information you need to understand how dangerous the situation is. I don’t want to scare people, but I’ve been working on climate change for more than 30 years and I can tell you it’s becoming extremely serious. You rightly mentioned the environmental impact, the impact on health, for example, the excess mortality rate in some countries due to climate change, which is very high and is growing. What we really need to do is to act collectively to face this problem.

QG: So, the ongoing concern matters more than the time frames which have been declared by countries, right?

Alessandro Lanza: Yes, that’s the problem. The problem is that there is global concern but we also need to consider particular aspects. For example, I would like to spend a few words on behalf of the kind of poor people who do not have access to energy. They face a double dilemma, because on the hand they do not have access so they continue with deforestation for example, which can make them environmental refugees. Climate change is a multi-faceted problem which means we have to take a multi-lateral approach.

QG: If rapid energy transition is successful, it is likely that states will have to help former coal mining regions to survive. We see successful examples of regional decarbonization in various countries where work in this direction in these regions began many years ago and now there have also been good results. The economies of these regions have taken the necessary steps and shown a readiness for the energy transition. Italy, for instance, has declared that it will shut down the coal generation fund by 2025. There is also the example of Sardinia which resembles the situation in our country due to the very low availability of gas infrastructure. Today electricity in Sardinia is mainly produced by coal. In 2020, the was a 75% of growth in the electricity produced from fossil sources.

The main renewable energy sources, wind and photovoltaics prospectively accounted for 15% and 7% of overall electricity production. So, what problems do regions face during their energy transition and how can we solve these problems?

Alessandro Lanza: I was born and raised in Sardinia, so I know the situation very well. As you said, the situation in Italy is that after the Russian invasion of Ukraine, we declares that our coal mining activities would be shut down by 2025, with the exception of Sardinia where the last coal-fired power station should close by 2028. Now we are already moving that date because we still have a problem with natural gas. But in any case, the situation is that, as you rightly said, there are some regions where coal is important Poland, for example, or even the US. During the election campaign of Donald Trump, the discussion was focused on how to sustain the coal mining industry. In Europe we still have a big problem, which is that Poland continues to extract large quantities of coal. But, again, there is not one single solution. Countries and regions need to be assessed one by one. And, of course there will be a transition period. You cannot say, “OK, from now on we need to shut down all coal”, because it’s simply impossible. Coal is still very important. In fact, after oil, coal remains the second source in the world, so there is a huge amount of coal around the world. And for countries like China or India it is still #1, even if they’re moving and looking for alternative solutions. They’re also exploring other technologies, so the solutions need to be assessed region by region. But, of course, you need to change the path.

If you cannot go straight from coal to renewables, you can go from coal to gas, again, as an interim. A step in the right directions. This is what will probably happen in Sardinia, which is a small place, even if there are more than a million people. The move from coal to gas is a transition. I’m not saying that everything needs to be shut down overnight because I know it’s not politically doable. So, we need transition. Transition means moving from one state to another, and taking account the real situation in different locations. And also taking account of people, because we work for people and so we need to know that each political region, every political decision affects people and they need to be protected. Poland is doing a terrific job, but other countries are moving too. As we said, transition means moving from one state to another and in doing so we need to organise this transition in the right way.

QG: Yes, of course. Everyone should stay sober and remember the economic impact.

Alessandro Lanza: Yes, but also the social impact. Because if you make the unwise decision to shut down overnight, you will have a social problem because you need to support people that previously lived off their wages as miners.

QG: Well, globally today there are obligations under the Paris Agreement to reduce greenhouse gases. Most countries have adopted carbon neutrality strategies and the carbon border taxes are being introduced in the European Union. At the same time, there is real evidence that coal-based generation plants are still being built or modernized. In your opinion, do investors in coal generation today understand that in the future their assets may not survive until the end of their expected life cycle? Do you have the feeling that their current behaviour falls under the classic: deny, hope and cross your fingers? Indeed, there are still investors and companies that are at the denial stage of the energy transition and are trying to jump onto the last carriage of the departing train.

Alessandro Lanza: Well, first of all, measures to combat climate change are still not legally binding in the sense that there are no sanctions and this is a problem because, if you say that people cannot drive in certain way and there are no fines, there’s no legally binding reason for them to do what you ask. That’s the problem, there are no adequate disincentives.

So legally binding solutions are the first step. And all the architecture of the Framework Commission on Climate Change is based on this simple fact that as Article 2 of the convention states, we share common but differentiated responsibility. That means that we are together, though not necessarily united, but we are a single planet. So, we have a common, but differentiated, responsibility for our future. We should do this. You should do that. In this respect the European Union is ahead of the curve. The EU’s Carbon Border Adjustment Mechanism (CBAM) is one of the tools created to address this problem, although it is not very clear how it will end.

In the European Union the discussion is about how to prepare a soft landing for coal. But, as you know, the financial sector has been among the first to react and say "we are not suggesting to invest or not to invest in coal because we don’t know if in say 10 years’ time if this investment will be a good investment or not.” So, the financial sector has taken a clear position in this respect. Many funds don’t, for example, recommend their clients to invest in weapons, but what about coal, or oil? Again, sometimes it seems there is a lack of balance between the different situations. So, the European Union is a good example of a policy-oriented approach, but one that cannot be adopted by everyone. Don’t forget also that the EU is among the richest places on earth and, to be honest, the European Union can afford measures that other countries simply cannot. Consequently, you cannot propose the EU solution in sub-Saharan Africa, where a life expectancy is 35 years. Life expectancy in Italy, for example, is 82, so there are big differences between regions and countries.

QG: That makes sense. Historically, there has been a relationship between growing energy demand and the availability of various energy sources and technologies. Historically, we remember the role that the transition from wood to coal played in the industrial revolution. So, my next question is about technology. What role does technology play in accelerating the energy transition? And, in your opinion, which technologies will accelerate energy transition in the story of climate change as the evil of our generation, the big problem. And it’s absolutely true. At the same time, we need to look at the numbers. For example, life expectancy, which is an interesting measure, can be calculated in England from year 1000, you will see that from 1000 to around 1820, to the beginning of the coal industry, we had generation after generation where the average life expectancy was between 35 and 40 years. So, when coal was developed on a large scale, there was an enormous boost in technology. In fact, energy transition means there are new energy sources which lead to new technology and the knock effect of this is that everyone will be better off. This is the story of first industrial revolution.

Then we had the second transition, which is related to oil and which came later, cars were invented at the end of the 1880s. The boom in the use of coal was succeeded by a boom in the development of oil, particularly in the United States and the development of the car industry, and many other industries too, meant that everyone was better off.

So, what I’m trying to say is that new technologies need fuel, often a new fuel. But I don’t see a new fuel now although people talking about hydrogen. But hydrogen is not a fuel. It can be important, but what we really need in the end of the story - probably in 100 years' time - is nuclear fusion. Nuclear fusion, plus hydrogen, will be a complete game changer. But, as you know, we’re not likely to see significant advances in the development of nuclear fusion until at least 2050 and it will take at least another 50 years from then. So, this is not something that I will live to see. But you won’t see it either, because we’re talking of a period of 100 years. But hope springs eternal!

Nevertheless, we need to act now, hoping and for sure waiting for new technologies. The world is working on fusion: the European Union, the United States and other countries are all working on fusion. Nuclear fusion is the number one, the ultimate tech solution, but it will take a century to get there.

QG: A century?

Alessandro Lanza: Yes, maybe a little less. But you know you need time to complete the first demonstration plant and that will probably be ready in about 20 or30 years. Then you need time to develop the technology but then, once you have fusion, you have cheap and clean energy, cheap electricity and with electricity and wateryou can produce hydrogen. So, with fusion plus hydrogen, we won’t need oil anymore. Problem solved.

QG:You mentioned the development of hydrogen energy. Today in Europe hydrogen is seen as an alternative to gas and a tool forthe decarbonization. But at the same time, the production of green hydrogen requires significant resources, water and green electricity. Also, the technologies needed for the development of hydrogen energy are still at the end stage, as you mentioned also. What prospects so you see for hydrogen energy, and if I may add to the previous question, what is the time to market?

Alessandro Lanza: I can give you another answer. I can give you multiple answers, not different, but complementary.

QG: Essentially what I’m asking is how long will it take for such technologies to enter the market?

Alessandro Lanza: So, let’s look at hydrogen first. Hydrogen is part of the solution. For sure it is not “the” solution. And hydrogen will not solve our problems fora number ofdifferent reasons. Forsure, there are some industries, steel for example, where hydrogen can be very, very useful. But I don’t see the possibility of hydrogen in cars. I think electric cars will predominate in the future. Hydrogen is developed, there are different ways to produce hydrogen as you mentioned there is also green hydrogen, there is steam, the blue variety, which is generated using natural gas and steam, so a chemical process etc. So, there are different ways to produce hydrogen. What is important for us -1 mean the community, the world, the industry - is also to invest in nitrogen.

The bottom line is, thank you very much for investing in hydrogen. Hydrogen is part of the solution. In some sectors it will be important. But forget the idea that hydrogen will be the solution. Hydrogen is a vector, it’s not an energy source, it’s another story. But it is useful for some specific uses. For example, there is the idea of using hydrogen for trucks, for the transport of commodities. But goods need to be transported by train, not using roads and hydrogen. So, hydrogen will be important but, again, it is part of the solution, not “the” solution.

QG: Thank you. My final question, what is your vision for a sustainable carbon-free future?

Alessandro Lanza: We are in deep trouble and my view is that we are different, and so there will be different responses. We are facing difficult times in the world but sometimes humankind does realise quite incredible results in a very short time. When the US decided to send rockets to the moon, they decided and delivered, which seemed impossible at the time, in 10 years. So sometimes we have the resources. We also have good people, we have scientists, we have good universities. And in some parts of the world there is also the money to invest. I’m optimistic by nature, so I think that we will sort it out. We will find a solution. Unfortunately, I cannotsay what the solution will be. I’m a believer in fusion and, I think, if we arrive alive in the time of fusion, fusion will be the solution. That will be the solution for sure, but it will be for our grandchildren.

QG: And that is very good news for our grandchildren. Mr Lanza, thank you for your time. Thank you foryour answers. I believe that we have all learned something today.

Alessandro Lanza: Thank you. You have to work hard. Thank you!