Repsol targets net-zero by 2050
Spanish oil and gas giant Repsol has committed to becoming a net-zero emission business by 2050, across its own operations and its indirect impacts.
The firm’s overarching vision for mid-century is bolstered by a number of interim targets, namely reducing carbon intensity by 10% by 2025; 20% by 2030; and 40% by 2040. All of these targets have been set against a 2016 baseline.
In order to reach these goals, Repsol will update its carbon pricing. In 2018, it priced carbon at $25 per tonne – this figure will be gradually increased to $40 per tonne by 2025, and $70 per tonne by 2040 for refining, chemicals, gas and electricity projects.
To make these costs real to executives, Repsol has also committed to linking at least 40% of the annual pay of the chief executive and all managers and leaders to progress against its targets, which it claims are aligned with the Paris Agreement. Similar moves have already been taken by the likes of Royal Dutch Shell.
Repsol’s net-zero plan does not, as yet , contain time-bound numerical targets for decommissioning existing oil and gas infrastructure. The company claims that its moves around pricing, combined with a 22% increase in investment, will help it to prioritise clean energy. Repsol already operates 2,592 MW of renewable generation and is targeting 7,500 MW by 2025.
For its remaining oil and gas portfolio for petrochemicals, Repsol will target 20% recycled content in its total polyolefin output by 2030.
“This vision translates to a strategy of balancing gas and oil reserves, with a vision of gas as the fuel for the energy transition while also taking into account the active role that oil must play in a more decarbonized world,” Repsol said in a statement, adding that it will offset any remaining emissions through reforestation and other nature restoration activities by mid-century.
"We are convinced that we must set more ambitious objectives to fight climate change,” Repsol’s chief executive Josu Jon Imaz said.
“We do it with the utmost confidence that we invest for the future. Addressing the significant challenges that lie ahead with strategic clarity is what will allow us to turn them into opportunities. We are convinced that this strengthens our project that is sustainable, attractive and profitable for all our stakeholders.”
An energised transition?
According to recent research, just 10% of the world's largest 132 coal, electricity and oil and gas companies have set time-based commitments to reduce their greenhouse gas emissions to net-zero by 2050 – the deadline by which the IPCC believes net global emissions must reach zero for a 1.5C trajectory to be realised.
Before Repsol made its announcement this week, coal firms BHP Billington, Exxaro Resources, and South32; electricity companies CEZ, EDF, Endesa, Enel, E.ON, Iberdrola, National Grid, Ørsted, and XCEL Energy; and Italian oil and gas giant Eni had all set net-zero targets.
Of this cohort, only BHPBilliton, Exxaro Resources and XCEL Energy have set net-zero targets for the entirety of their indirect emissions (Scope 2 and 3). Orsted recently pledged to halve emissions from its global supply chain by 2032, against a 2018 baseline.
Pressure for other companies to follow suit will only build in the coming days, with 29,000 people due to meet in Madrid for COP25. The first day of the summit (2 December) saw the UN’s secretary-general deliver a rousing speech in favour of new carbon pricing and the publication of research charting dwindling coal investment.