CLIMATE+

On April 25-26, Azerbaijani President Ilham Aliyev paid a working visit to Berlin at the invitation of German Chancellor Olaf Scholz to participate in the High-Level Segment of the 15th Petersberg Climate Dialogue. This second working visit of the Azerbaijani leader to Germany in the last three months signals a marked intensification of the Azerbaijani-German dialogue. Berlin, vying with Paris to expand its influence in Europe and beyond, is keen to bolster its position in the South Caucasus amid a full-blown crisis in relations between Azerbaijan and France, seizing every opportunity to do so.

Germany Takes the Lead

The Petersberg Climate Dialogue represents one such opportunity. Held annually since 2010, it serves as a forum for leaders and high representatives from various countries to prepare for the UN Climate Change Conference (COP). Given that the capital of Azerbaijan is hosting this year's global event, the organisers' interest in the country is quite understandable.

A significant backdrop to the visit was the European Parliament's adoption of a resolution—the eighth since 2021—urging EU countries to curtail cooperation with Azerbaijan across all sectors, including energy, citing serious human rights violations. Some European politicians have even suggested boycotting the COP. Notably, this resolution followed a week after the French President's decision to recall his ambassador from Baku, hinting at a possible connection between the two events. Despite these tensions, Berlin maintains its tradition of engaging in dialogue with countries of particular interest.

This commitment was evident in the meetings and negotiations between Olaf Scholz and Ilham Aliyev in Berlin, both in a narrow and extended format, and the agreements reached during the visit. In Berlin, the President of Azerbaijan also engaged with other key figures of the German leadership, including the President and Foreign Minister, sharing perspectives on bilateral and regional agendas.

Azerbaijan's Formula for Environmental Balance

Addressing the plenary session of the High-Level Segment of the 15th Petersberg Climate Dialogue, the Azerbaijani head of state briefed attendees on the preparations for the climate summit and discussed the implementation of renewable energy source (RES) projects in Azerbaijan. He emphasised that for Baku, these projects are not merely fashionable but represent a deliberate choice grounded in pragmatism. Specifically, by advancing RES projects, Baku aims to not only curtail carbon dioxide emissions but also to supplant gas and other fossil fuels in the country's energy mix with "green" energy.

Baku openly anticipates that this strategy will yield at least 5 billion cubic metres of gas, made available through the substitution with "green" energy. These additional cubic metres are expected to enable Baku to significantly boost gas supplies to Europe in the near future, as outlined in the Memorandum on Energy Partnership with the EU. The demand for natural gas—particularly from new sources—is on the rise in Europe. Whereas Azerbaijan supplied 8 billion cubic metres of gas to EU countries in 2021, by 2023, this figure has climbed to 12 billion. "Azerbaijan, endowed with both traditional and renewable energy resources, will continue to be a vital partner for Europe for many years to come," Ilham Aliyev affirmed.

Regarding Germany, the Chancellor has openly pledged support for Baku's initiatives at the upcoming COP summit and expressed German companies' interest in green energy projects within Azerbaijan. Berlin has long established itself as a proponent of the "green agenda" within the European Union. It is noteworthy that the Green Party, holding a pivotal position in the current ruling coalition—Foreign Minister Annalena Berbock—has been actively involved. The Azerbaijani leader also conducted in-depth discussions with her on regional and international matters, expressing appreciation for her role in facilitating the meetings between the Foreign Ministers of Azerbaijan and Armenia, which have lent momentum to the peace treaty negotiation process. He also indicated that the next meeting is scheduled to take place in Astana.

In Germany, while discussing the climate agenda and the involvement of oil and gas-producing nations, Ilham Aliyev opined that the world will continue to rely on fossil fuels for many years ahead. Unrealistic expectations from COP29 should be tempered; it should not be perceived as a punitive measure for countries with surplus traditional energy production capacity.

When addressing the green transition's optimal opportunities, care must be taken to avoid hasty measures that could have adverse effects on individual nations and the global economy at large.

New Horizons of Azerbaijani-German Cooperation

In 2023, the host of COP28, the United Arab Emirates, backed by Saudi Arabia, resisted the phasing out of fossil fuels, drawing strong criticism from Western nations. Azerbaijan appears unlikely to adopt a radical stance on this matter, instead aiming for a consensus on the final statement among all key stakeholders, with Germany being one of them.

Whether Baku and Berlin have reached a compromise remains uncertain. However, the productive discussions regarding German companies' involvement in green energy production projects in Azerbaijan are cause for optimism that mutual understanding has been achieved.

Federal Chancellor Olaf Scholz has recognized the region's significant potential in "green" and hydrogen energy, with German companies eager to collaborate with Azerbaijan in this domain. He believes that suitable framework conditions are necessary for such cooperation. This could entail preparing an agreement on green energy production between Germany and Azerbaijan.

In June 2023, Giorgi Chikovani, head of the Oil and Gas Corporation of Georgia, and Bodo Schmülling, director in the energy sector at the German Development Bank, signed an agreement allocating €1.3 million for the development and implementation of a green hydrogen program.

A similar agreement could be reached with Baku, aligning well with Azerbaijan's ambitions to commence "green" hydrogen production in the coming years. A 2023 study funded by the European Bank for Reconstruction and Development suggests that "green" hydrogen from Azerbaijan could become competitive in Europe.

By 2030, a kilogram of "green" hydrogen could be produced in Azerbaijan using wind and solar energy for €2.92, in contrast to €3.67 in the EU. Thus, the prospects for collaboration between Germany and Azerbaijan in this sector are promising. Germany stands to gain lucrative contracts for its enterprises, while Azerbaijan could access cutting-edge technologies, much to the chagrin of those attempting to restrict Baku's engagement with the world's leading nations in this sphere.

As for the potential of Berlin's engagement in the South Caucasus' political landscape, its mechanisms of influence remain consistent. Primarily, these are economic levers, and secondarily, the aspiration to maintain regional peace as a prerequisite for fulfilling pragmatic economic objectives. In Berlin, in a nod to political convention, the subject of human rights was also broached. It is widely held that this gesture was aimed more at appeasing critics of the current German administration, who perceive an overly cosy relationship with Baku.