Total to increase annual renewables investments to $3bn by 2030
French oil & gas major Total has pledged to increase its annual investments in renewables by 50% by 2030, against the $2bn allocated in 2019, as it strives to meet a 2050 net-zero target.
The company made the commitment late last week as it publicly outlined its plans for diversifying away from fossil fuels and becoming a “low-carbon power producer” for the first time.
By increasing its annual investment in the coming years, the company said, it will bring 35GW of new renewable energy production capacity online by 2025. This is up from the previous target of 25GW.
Total said in a statement that it is hoping to become one of the world’s top five renewable energy companies within a decade, adding that it already has 24.5GW of renewable generation projects under construction globally. But it is only foreseeing low-carbon electricity accounting for 15-20% of its sales by 2040.
The statement comes as the company – like all major oil and gas players – is facing the brunt of the Covid-19 pandemic. It has cut its annual spending from $15bn to $12bn and has said it will need to spend less still on oil as the years pass and the energy transition continues.
“Diversifying is what will keep us strong,” Total’s senior vice president for strategy, growth and people, Thomas Rebeyrol said.
“Ten years ago renewables were a new world for us, but we want to be as successful as we’ve been with oil,” Rebyrol added. “It’s a change of gear, but we’ve done pretty well considering electricity provision was a state monopoly in much of Europe until relatively recently.”
Nonetheless, the statement confirms that natural gas will remain a key source of revenue for Total in the future. It forecasts a doubling of LNG sales between 2020 and 2030.
Total committed to reaching net-zero emissions by 2050 across its operations and products – covering Scope 1, 2 and 3 emissions – earlier this year. It has said it will move the target date forward if possible.
The company had been facing criticisms from green groups and heated questions from Climate Action 100+ – a coalition consisting of more than 450 investors with more than $40trn in assets under management.
While the net-zero target has been cautiously welcomed, Total, like most fossil fuel majors, is under pressure to go further.
Recent analysis from the Transition Pathway Initiative (TPI) found that Total’s commitments are aligned with the Paris Agreement’s 2C trajectory, but not with its 1.5C trajectory or net-zero. A separate study by Carbon Tracker concluded that Total’s commitments will enable it to shirk responsibility for all or some of their Scope 3 (indirect) emissions.
© Faversham House Ltd 2023 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.