Repsol, the Spanish energy major, has pledged that it will become a net zero emitter by 2050, boasting that this made it the first oil and gas company to do that.
The plan focuses on reducing the carbon intensity of its products rather than a direct cut in emissions, using as a baseline its carbon intensity levels from 2016. This carbon intensity should fall by 10 percent by 2025, further declining to 20 percent in 2030, and still further to 40 percent by 2040. A decade later, Repsol should be producing clean energy in quantities equal to its emissions.
The Spanish company’s plan will target emission standards that are compliant with the less ambitious of the two Paris Agreement scenarios for climate change—the one that seeks to arrest global temperature rises to an average of 2 degrees Celsius.
“In this context, the company assumes a new oil and gas price scenario consistent with the Paris Agreement’s climate goals. This adjustment to the value of some assets implies a post-tax impairment charge of 4.8 billion euros, which will be reflected in specific results for 2019 but will neither affect cash flow nor shareholder remuneration, which is among the most attractive in the Spanish stock market and in the sector worldwide,” Repsol said.
The company also said about 70 percent of its target reduction in carbon intensity can be achieved using technology “that can currently be foreseen”, adding it will make use of all tech that is already available, including costly carbon capture, storage, and reuse.
As another part of its emissions elimination efforts, Repsol has revised up its plans for low-emissions power generation capacity, as it calls it, from 4.5 GW to 7.5 GW by 2025. At the moment, the company has 2.952 GW of renewable energy capacity in operation and another 1.083 GW under development. Investments for another 1.6 GW have already been approved. Completing these projects will bring Repsol’s total renewable capacity up to 5.6 GW.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.