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Developments in the green energy sector and beyond.
Last updated: 06 Jul 2020 8 min read
Oil and gas companies are paying lip service to climate commitments, a new study fears.
The investigation by think tank Carbon Tracker claims the highest polluters are failing to take responsibility for their emissions footprint, with some on track to deliver just a 3% cut in absolute emissions by 2050.
Carbon Tracker studied the climate targets of nine large oil and gas firms, their policies for hitting the targets, and the metrics for tracking progress. The analysis claims that some firms’ commitments allow them to sidestep their responsibilities for indirect, or scope 3, emissions, which can account for 85% to 95% of a firm’s overall carbon footprint. Others have targets for scope 1 and 2 emissions only.
Global governments need to seize the “once in a lifetime opportunity” to steer the planet on to a sustainable development path over the next year, otherwise meeting the goals of the Paris Agreement will be in jeopardy.
The International Energy Agency (IEA) is warning politicians that if they make the wrong calls now the world will be locked into a new generation of high-carbon infrastructure.
The IEA has published suggestions detailing how world leaders and their governments could help usher in $1trn a year of investment in clean technologies and infrastructure, with the aim of preventing a global depression and improving greenhouse emissions.
Since the onset of the coronavirus pandemic, global leaders have been urged to ensure their economic recovery plans are environmentally friendly, though only a handful have publicly committed to the goal so far. South Korea is transitioning state-run facilities to rely on renewable energy, and the EU is considering its set of coronavirus recovery initiatives.
Finance firms are being encouraged to better address biodiversity in their investments, in analysis conducted by the UN Environment Programme (UNEP) and Global Canopy .
To date, none of the world’s largest 75 asset managers has a dedicated biodiversity policy for either their operations or those of their clients. This exposes them to non-compliance of the upcoming Global Biodiversity Framework, which is the Paris-style agreement in place to prevent the planet’s sixth mass extinction.
Elsewhere, businesses are pledging to work with governments in an attempt to reverse nature loss, tying in with countries’ coronavirus recovery packages.
The move comes after a call to action from NGOs and trade bodies that was signed by 31 organisations including Forum for the Future, UN Global Compact, WWF and the Science Based Targets Network. The letter doubles down on the World Economic Forum’s research that states $44trn – more than half of global GDP – is exposed to risks from nature loss, and is now set to get worse post-pandemic.
A global study of farmers has shown that many are more concerned about the impact of climate change on their livelihoods than about the aftermath of the coronavirus pandemic.
Ipsos MORI and agri-business experts Syngenta polled 600 large-scale farmers in the US, France, China, Brazil, India and much of Africa in February. That poll found that 72% were worried about the impact of climate change on their crop yields, the health of their animals, and ability to do business.
Syngenta’s report adds that of 200 large-scale farmers in Europe, 46% were concerned about the post-coronavirus world, but 53% were still more concerned about climate change. According to the poll, 63% said climate change would have a greater impact on their business than coronavirus over the next five years.
Green activists are disappointed by the “underwhelming” pandemic recovery plan put forward by the EU. The European Commission unveiled its proposed €750bn recovery fund in May, allocating billions of euros to clean mobility, renewables, and a wave of renovation.
Ciarán Cuffe, an Irish MEP from the Green Party, said that while it had the potential to create more than two million new jobs and contribute to a clean economy, without a dedicated budget, he doubted these promises could be kept.
Julie Kjestrup, head of EU affairs at Danish multinational Danfoss, said the plan was “missing the ‘how tos’… it’s not clear how renovation can or will be financed”.
EU countries have agreed that the flagship fund designed to move the bloc away from fossil fuels should not finance nuclear or natural gas projects.
The European Commission is aiming to create a €40bn Just Transition Fund (JTF), which will be made up of €30bn from the coronavirus recovery fund and €10bn from its budget for 2021 – 27.
Ambassadors from the EU’s 27 member states have now agreed that the JTF “shall not support the decommissioning or the construction of nuclear power stations” nor “investment related to the production, processing, distribution, storage or combustion of fossil fuels”.
The aim of the JTF is to help countries move away from high-carbon industries, employees retrain and find new low-carbon jobs, and regions that rely on polluting sectors to build new, clean industries.
Prime minister Boris Johnson has promised to use green initiatives to boost the ailing economy. Continuing in the Keynesian spirit of chancellor Rishi Sunak’s first budget, Johnson’s key message was to “build, build, build – build back better, build back greener, build back faster”.
Accompanying the rhetoric was an extension to the completion deadline for projects initiated under the non-domestic Renewable Heat Incentive by 14 months, and by 12 months for the domestic. A third round of the RHI will open for applications in July 2020.
Another major development was government support of up to £100m for the development of Direct Air Capture emissions reduction technologies.
The financial regulator’s Climate Financial Risk Forum (CFRF) has published a guide to help firms handle climate-related financial risks . According to its authors, the guide will help firms of all sizes in such areas as disclosure of climate-related financial risks, effective risk management, scenario analysis, and opportunities for innovation in the interest of consumers.
Sheldon Mills, FCA co-chair of the CFRF, said: “Climate change represents an unprecedented challenge to the planet, and the financial services industry has a significant role to play if we are to meet the UK’s target of net zero by 2050. The CFRF is a positive example of collaboration between regulators and industry to find common ways to overcome barriers to meeting this challenge. The guide will be a helpful tool for firms in seeking to address the risks and potential opportunities presented by the transition to net zero.”
The Committee on Climate Change (CCC) has published its 2020 progress report to parliament . Much of its focus is important new advice on how the post-pandemic economic recovery can accelerate the transition to net zero and strengthen the UK’s resilience to climate change. Its six key principles include ensuring recovery does not lock in greenhouse emissions and better reducing emissions related to fiscal changes.
The report’s key authors state: “Strong domestic action will provide the basis for the UK government’s vital international leadership in the coming year as it takes on the presidency of the COP26 climate summit in 2021. The UK’s international credibility is on the line. The much-anticipated climate conference will be a major test of global cooperation as the world seeks to recover from Covid-19. With strong climate action taking place here at home, the UK will be well placed to guide that global response.”
One of its most dramatic policy recommendations is hastening the elimination of petrol and diesel cars and vans (including hybrids) to no later than 2032. Current policy is set at 2035, recently brought forward from 2040.
In a similar vein, the Green Alliance has published its own coronavirus recovery recommendations . Its plan is formed from five building blocks:
Substantial increases in electricity generated by solar and wind farms mean that renewables made up 47% of the UK’s electricity generation in the first three months of 2020, according to the Department for Business, Energy & Industrial Strategy . Total energy production climbed 1.8% compared with the first quarter of 2019, while use of coal declined 27% in the same period. Demand for gas also fell 4.6%.
In line with this trend, industry trade association Oil & Gas UK (OGUK) has set forth plans to halve emissions from production and exploration by 2030, with the country’s basin becoming net zero by the year 2050.
Deirdre Michie OBE, chief executive of OGUK, writes: “These targets are set against a 2018 baseline and address the totality of GHG [greenhouse gas] emissions arising from upstream E&P [exploration and production] activities on the UK continental shelf, including CO2, methane and other GHG emissions. Each year, we will publicly show progress against our commitments on a sector-wide basis.”
Sustainable Energy Update, Renewable Energy