Nord Stream 2 could turn into another stranded fossil fuel asset, NGO report finds

Press Release
Berlin, April 20th, 2021
  • Nord Stream 2 would cause CO2 emissions of 100 mill tons per year
  • Renewed calls to halt construction following Russian military movements
  • Decreasing gas demand in Europe may turn pipeline into stranded asset

Today, Urgewald released a report about the gas pipeline project Nord Stream 2 and the fossil fuel corporations driving its construction forward. The analysis outlines the devastating climate impact and Indigenous rights issues associated with the project. Recent geopolitical conflicts and decreasing gas demand in Europe could turn the pipeline into a stranded asset, further increasing reputational and financial risks for the involved companies.

Nord Stream 2 is part of a system of underwater pipelines in the Baltic Sea intended to transport gas over 1200 km from Russia to Germany. The project owner Gazprom has signed financing agreements for the project with Engie, OMV, Shell, Uniper and Wintershall Dea for contributions of €950 million each. If completed and fully used, Nord Stream 2 would add another 55 billion cubic meters (bcm) to Germany’s annual gas imports. Fossil gas plays a key role in fuelling the climate crisis. It consists of 75-100% methane, which is 86 times more potent than CO2. The report finds that Nord Stream 2 would cause CO2 emissions of 100 million tons per year, disregarding the additional methane leakages in the supply chain.

Geopolitical conflicts and calls for sanctions
The arrest of Russian opposition leader Alexei Navalny has resulted in renewed calls for sanctions and the halting of Nord Stream 2 from the European parliament and G7 states. Recent Russian military movements towards the Ukrainian border have further increased diplomatic tensions. The threat of US sanctions has already significantly delayed construction. 18 companies that were involved in the project – among them insurers Munich Re, Axa and Zurich - have left it to avoid the risk of losing future business in the US. Wintershall Dea and OMV both disclosed that they so far financed Nord Stream 2 with €730 million each. Responding to the growing risk of US sanctions, Wintershall Dea announced in its 2020 annual report that it planned no further disbursements.

Nord Stream 2 is threatening livelihoods of Nenets Indigenous Peoples
Nord Stream 2 will transport gas that originates from the Russian Arctic
peninsula of Yamal. The region accounts for 23% of the world's explored gas reserves and provides 90% of Russia’s gas supply. The peninsula is home to around 41,000 Nenets Indigenous People, a significant part of which engage in year-round reindeer herding. Exploration and extraction in Yamal have resulted in the loss of pastureland and rising tensions between Indigenous Peoples and the oil and gas companies.

Sonja Meister, Energy Campaigner with Urgewald and author of the report, said:
“Nord Stream 2 will have a disastrous impact on the climate and should be stopped immediately. The pipeline is not compatible with the Paris Agreement’s goal of limiting global warming to 1.5°. Nord Stream 2 has become both a reputational and economic risk. It could quickly turn into a money grave for the involved companies and their respective investors.“

 

The full report is available at: https://urgewald.org/nordstream2-report

 

Kontakt

    Bild Anprechpartner   Jacey Bingler

    Jacey Bingler
    International Media Director & Fossil Free Finance Campaign Network Coordinator
    jacey [at] urgewald.org
    030/28 48 22-71

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