Government recently announced plans to sell Barbados National Terminal Company Ltd, a fully-owned subsidiary of the Barbados National Oil Company Ltd, which has responsibility for the importation and domestic production of crude oil and natural gas.
This sale is subject, as we understand it, to regulatory approval by the Fair Trading Commission (FTC) which has legal oversight for mergers and competition as well as consumer protection.
Since the 2010 Sustainable Energy Framework for Barbados (SEF-B) study was released the Government has been entertaining the idea of significantly reducing its importation of fossil fuels, which runs counter to the main business of Barbados National Terminal Company Ltd in the long run.
In November 2015, the Government as part of its formal submission prior to the Paris Conference of Parties 21st meeting (COP21), committed itself to reducing its Green House Gas (GHG) emissions by 30 per cent. The energy and waste sectors account for 78 percent of the island’s carbon emissions.
At the COP 21 climate change meeting in France and subsequently in 2016 the Barbados legally bonded itself to meeting these targets.
BREA said in a statement these targets have direct implications for the business model of BNTCL. It’s core business is importation of most of Barbados ‘ fossil fuel which is also the largest source of the country’s Green House Gas emissions. The additional piece of this fact scenario is that Barbados, at the recent COP 22 meeting held last November in Marrakech, committed itself as did 84 other countries to becoming a 100 per cent Renewable Energy economy.
BREA said :” The backdrop to all these facts which appear to run contrary to the long-term viability of BNTCL based on its current business model is that both Sol (Simpson Oil Limited) and Rubis Caribbean are represented on the National Task Force on Energy. They were both present when the Road Map by the International Renewable Energy Agency was presented in 2016 which suggested that the island could be consuming only 30 per cent of its current fossil fuel imports for electricity generation and transportation by 2030.”
The Barbados Renewable Energy Association believes the proposed sale of BNTCL should be regarded as a positive step as Government would be divesting itself of an asset whose operations would increasingly conflict with its international climate mitigation and Green House Gas reducing obligations.
“Government is setting the right tone in the fuel distribution sector by divesting itself of an asset which runs counter to its medium term international commitments to reduce Green House gas emissions,” BREA President Aidan Rogers said.
“I think this sends a clear message to the other players within the domestic energy sector of Government’s evolving policy towards greater sustainable energy penetration and a path to a 100 per cent Renewable Energy economy,” the president remarked.
“The politics surrounding the sale is appropriately being dealt with by the politicians,” Rogers said, “but BREA is of the view that it has a public obligation to provide sectoral context to the discussion.”