IEA and India to start membership talks as Asian energy use rises

0
81

A woman walks under high-tension power lines near a coal-fired power plant in New Delhi. 

PARIS/HELSINKI — The International Energy Agency is finalizing plans to open membership discussions with India, Nikkei has learned, as the organization seeks to strengthen cooperation in Asia to stabilize energy supplies and tackle climate change.

The agency is also preparing to establish its first regional office in Singapore by the end of this year, as a base to bolster ties with non-members such as Indonesia. The focus on Asia comes as the region grows into the center of global energy consumption.

The IEA is preparing relevant documents in the hope of reaching an agreement to start the talks when it holds its next ministerial meeting in Paris, where it is headquartered, on Tuesday and Wednesday.

The agency currently has 31 member countries, mainly Western nations such as the U.S. and European states. Asian full members are limited to Japan and South Korea. To ensure stable energy supplies, members are obligated to stockpile oil equivalent to 90 days’ worth of imports. The addition of India, a huge oil consumer, would enhance the grouping’s ability to respond to energy crises.

India’s participation would also make it easier for members to cooperate on climate change countermeasures, such as transitioning to renewable energy. The IEA has taken on a key role in promoting decarbonization in recent years.

In September, the agency recommended that countries triple the global capacity of renewable energy by 2030 to achieve the goals of the Paris Agreement, an international framework for limiting the global temperature rise to 1.5 C above pre-industrial averages. The statement was agreed by countries at the annual United Nations climate conference (COP28) in December.

India, along with Singapore and Indonesia and several others, is already listed as an IEA association country, which allows various forms of participation and cooperation. The IEA formed a “strategic partnership” with New Delhi in 2021, and it has sent a letter to the agency asking to begin full membership talks.

The U.S., Japan, and France are open to India joining the IEA. Joint statements agreed during Indian Prime Minister Narendra Modi’s visit to the U.S. last June and French President Emmanuel Macron’s visit to India in January noted that Washington and Paris were supportive of India’s accession.

The IEA has been led by developed countries, but cooperation with emerging nations is considered essential to implement effective energy policies, including toward decarbonization.

Oil consumption by the world’s most populous country is growing rapidly. The IEA estimates India’s consumption will reach 6.6 million barrels per day in 2030, a 20% increase from 2023. The nation is poised to account for a third of the increase in global consumption in the seven years to 2030.

The criteria for IEA membership include being a member of the Organization for Economic Cooperation and Development. India has not joined the OECD — partly reflecting its longstanding policy of nonalignment, and out of consideration for what signal membership in a grouping of developed economies might send to other emerging nations.

But joining the IEA would help India establish itself as a major global power and allow it to become more involved in forming international consensus on energy issues. It would also gain access to global energy supply and demand forecasts, one of the IEA’s strengths. The IEA is set to initiate thorough discussions among its members, including a review of the rules.

Plans for the new office in Singapore also reflect the IEA’s emphasis on Asia. The city-state’s proximity to other Southeast Asian countries would allow the IEA to strengthen its support for the energy policies of each government. Singapore’s status as a regional financial hub also makes it an ideal spot for the agency to gather information related to climate finance. The agency is expected to recruit energy and finance experts as it prepares to open the permanent base.

The IEA was founded in 1974, after the first oil crisis, by the U.S., Japan and European countries. In the event of an emergency, member countries will release their oil stockpiles to prevent a sharp rise in market prices.

But the agency’s relevance and effectiveness has been called into question as countries like India and China — also only an association country — increase their energy consumption.

The drive to expand the membership and bring emerging economies like India on board could help the IEA take more concerted action on climate change and other pressing global issues.