Could renewables be knocked over by the death struggle of oil?

Could renewables be knocked over by the death struggle of oil?

Oil rigs.

The plummeting oil price might not have a major impact on the renewables energy industry this year, but green businesses should be prepared for a long and dangerous battle with the fossil fuel industry over the long term.

That is the stark warning from Peder Holk Nielsen, chief executive and president of Novozymes, the Danish biotech giant that specializes in developing enzymes for use in the production of everything from bioenergy to low- temperature detergents and animal feeds that eliminate the need for phosphates.

As the world's largest producer of industrial enzymes, Novozymes has been working behind the scenes with some of the world's biggest companies to develop bio-based technologies that could help clean up the world's dirtiest industries.

But Nielsen maintains the company no longer can work alone to deliver these solutions, and is asking other businesses and governments to partner with it to help accelerate development — be that through working on R&D with a consumer products company such as Proctor & Gamble or convincing the Indian government to make clothing mills pay if they contaminate rivers.

"We have technologies that would save a lot of water and a lot of chemicals, but as long as there are places where the water is free and the pollution is free, no cotton mill would ever want to use our products," he explained.

But Nielsen's more pressing concern is the climate change talks that are ramping up this year ahead of a global deal on tackling carbon emissions that is expected to be signed at the United Nations Paris COP21 summit in December.

He fears renewable technologies will lose the long-running battle with fossil fuels unless politicians agree to put an effective price on carbon. If renewable energy investment continues to climb, he predicts a time when oil demand, and with it price, naturally will fall, which could spell disaster for the green economy.

"Rather than thinking, 'I'm going to save my last oil reserves for the high-price scenario,' companies might start thinking they want to get rid of their reserves while oil still has a value," he explained. "So I think you might see in this struggle a 'rush to the pump' that oil prices will come down, and renewables have to face this window where oil is going to be inexpensive. That's why I think we need politicians to step up. Because if they don't step up, and they don't mandate the use of renewables, then renewables will be knocked over by the death struggle of oil."

Nielsen is convinced that without policy action this crunch point inevitably will come, if it hasn't arrived already in the recent collapse in oil prices. "It might be now, but if it's not now, then it will be in 10 or 15 years," he predicted. "It has to happen. We have to significantly reduce our oil consumption before the reserves run out."

Last week the chief executive of Shell told petroleum companies that they must fight harder to make their voice heard ahead of the Paris Summit, warning that the sector needed to push back against those who want to see a "sudden death" of fossil fuels.

Shell chief executive Ben van Beurden warned his industry peers that the sector needs to develop more sophisticated arguments than simply denying climate change, undermining calls for an effective carbon price or "always descending into the 'jobs versus environment' argument."

"Our sector needs to enter into the public debate alongside other credible parties," he said. "Together, we can offer some realism and practicality to the debate."

But Nielsen says green businesses should be sceptical about the oil industry's supposed commitment to tackling climate change.

"I'm very clear on it," he said. "We should not expect the oil companies to help the world become more renewable. I don't think that will happen; they have a vested interest in doing the opposite. Even though they may be good corporate citizens, they are part of a system that cannot do anything that doesn't try to protect the business they have. So the only way the world gets more renewables is if politicians step up to it and mandate."

His comments come as the chief executive of Unilever called for world leaders to use the low oil price now to end global fossil fuel subsidies in order to boost investment in renewable energy technologies. Writing in the Guardian, Paul Polman said an end to the estimated $600-billion annual fossil fuel subsidies would help tackle climate change and poverty.

"Powerful vested interests in high-carbon businesses are desperately opposing these changes, using obscure scientific data to question any action, or saying that it is too difficult, too expensive or not necessary," he wrote. "Do not be fooled."

Shell's van Beurden may want a more balanced debate on the response to climate change, but some other high-profile business leaders evidently feel that response still needs to take on high-carbon vested interests through bold political action.

This article originally appeared at BusinessGreen.