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REGIONAL REVIEWS: EUROPE By Tsvetana Paraskova
European Energy Review Europe’s energy scene has seen some significant developments since the start of 2020. The European Union aims to enshrine a target for carbon neutrality by 2050 into law. Major European oil and gas firms have pledged to cut carbon emissions in response to growing investor and shareholder concern about climate change and insufficient climate action. Deal-making and exploration in the oil and gas sector continue along with project development and project launches in several alternative energy areas including; offshore wind, hydrogen, solar power and energy storage.
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he European Commission proposed in early March a European Climate Law to enshrine the European Green Deal’s commitment for carbon neutrality by 2050 into legislation. Under proposed European Climate Law, the 2050 netzero carbon target would become legally binding collectively binding all EU institutions and member states to take the necessary measures at EU and national level to meet the net-zero target.
In recent weeks, while the European Union is working on a continent-wide net-zero goal, several major oil and gas firms have pledged to reduce their carbon footprint by lowering their emissions and the emissions from the energy products that they sell. On 6 February, Norway’s Equinor unveiled its climate roadmap through 2050, aiming to reduce the net carbon intensity, from initial production to final consumption, of energy produced by at least 50 by 2050. Two years ago, Equinor dropped the name Statoil to reflect its ambition to be associated with the wider energy sector. In an effort to be a part of the solution in the energy transition, Equinor will also look to grow its renewable energy capacity tenfold by 2026 and become a global offshore wind major. “We will produce less oil in a low carbon future, but value creation from oil and gas will still be high, and renewables give significant new opportunities to create attractive returns and growth,” Equinor’s president and CEO Eldar Sætre said.
www.ogvenergy.co.uk I April 2020
Galp now looks to develop a sustainable renewable power generation portfolio, allocating 10-15% of its investment to renewables to capture opportunities from new businesses that could be scaled up. Italy’s Eni joined the ranks of oil and gas firms pledging significant cuts in carbon emissions and intensity in its long-term strategic plan through 2050 unveiled on 28 February. Under the plan, Eni expects its oil production to peak in 2025 as the company will look to boost its gas production and materially increase its renewable energy portfolio. Eni aims to obtain by 2050 an -80% reduction in net scope 1, 2 and 3 emissions of the entire life-cycle of the energy products it sells, as well as a -55% reduction in emission intensity compared to 2018. The Italian major plans to have global renewables installed capacity of 3 GW by 2023 and 5 GW by 2025, and to raise that capacity to more than 55 GW by 2050. “We have designed a strategy that combines economic sustainability with environmental sustainability, and we have done so by defining an action plan based on technologies – existing or developed in-house - that we know how to implement. This will allow Eni to be a leader in the market supplying decarbonised energy products and actively contributing to the energy transition process,” Eni’s chief executive Claudio Descalzi said.
A week later, BP followed with another net-zero pledge from an oil major. The UK-based oil giant set on 12 February a new ambition to become a net-zero company by 2050 or sooner. The oil and gas supermajor will also look to cut the carbon intensity of products BP sells by 50% by 2050 or sooner and increase the proportion of investment into non-oil and gas businesses over time. BP will keep its commitment to reward investors as it transforms, chief executive Bernard Looney said. “We can only reimagine energy if we are financially strong, able to pay the dividend our owners depend on and to generate the cash to invest in new low and no-carbon businesses,” Looney said. Another week later, Portugal’s oil and gas firm Galp said it was embracing the energy transition, creating a new division dedicated to renewables and new business models. “Galp will launch new products and services and will transform its traditional businesses through technology, digitalisation and innovation,” the company said on its Capital Markets Day.
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