Oil major BP (BP.N) has lobbied the EU to support natural gas, a move that exposes different views among investors and reflects a broader European dispute over the role of fossil fuels in. Transitioning to a lower-carbon world
The European Commission, which aims to achieve zero net greenhouse gas emissions by 2050, plans to exclude gas-fired power plants from a list of sustainable marketable new investments. But the decision was delayed last month after complaints from some countries and companies.
Britain’s BP was among those lobbying against the plan. In response to the Commission’s public consultations in December 2020, it said the new rules could threaten gas project financing and hinder a shift from more polluting coal.
BP called for an increase in emissions limits that gas plants must comply with so that they can be labeled green without the immediate installation of carbon capture and storage (CCS) technology, which is still considered expensive. Too for a wide range of uses.
Natural gas emits about half the carbon dioxide of coal when it is burned in power plants. But the gas infrastructure is also involved in the greenhouse gas methane emissions.
When asked about lobbying, BP said it strongly supports the EU’s climate goals. It added that natural gas made it possible to switch from coal.
Investors, however, gave mixed responses when asked if BP’s gas support was at odds with its pledge to support the Paris Agreement. As well as a commitment to bring carbon emissions from the tanks produced to zero net by 2050, the company has pledged to host lobbying activities to support its zero net carbon policy.
Natasha Landell-Mills The supervisory chief of asset manager Sarasin and Partners said BP lobbying raised questions about obligations.
“If capital expenditures Their (capital expenditures) focus on a complete reduction of carbon by 2050, you would expect to see lobbying align with this goal, usually facts that seem to be pushing the other way show. Saw the problem, “she added.
Others, however, point to the question of what it means to be consistent with the Paris Agreement in practice.
John Streur, CEO of Calvert Research and Management, US Asset Manager, said: “It’s not like the standard-setters have said ‘This is a definition that corresponds to Paris, broken down by industry,’ ‘said John Streur, CEO of Calvert Research and Management, US asset manager.
Another institutional investor, speaking on terms of anonymity, said he saw no problems with BP’s response and had no blueprint for what it means to Paris, adding it was not a good time to. “Hold your head out”
The European Commission originally said gas plants would have to emit less than 100 grams of carbon dioxide per kilowatt-hour (CO2e / kilowatt-hour) to be labeled green, a level that even CCS use would make it difficult. Will be achieved according to BP information
In a December proposal to the Commission, BP urged the EU to set higher emissions limits to encourage power producers to shift more gas capacity from coal plants.
“Natural gas should have a specific threshold, higher than 100g CO2e / kWh at present, to reflect its role in facilitating a reasonable and fair energy conversion through coal-fired power generation and heating,” he said. Expendable energy to complement renewable energy and its presentations An alternative fuel for transportation, “said.
BP is far from just supporting gas.
At least nine EU countries, including Poland, Hungary and the Czech Republic, have called on the Commission to make gas plants more sustainable, according to documents released by Reuters.Other governments, including Denmark, Spain and Ireland, have called for Brussels to exclude fuel.
European oil and gas producer Eni criticized the 100 g / kWH threshold too low in December, while Total (TOTF.PA) and Repsol (REP.MC) signed an open letter from several energy companies in support. Gas as Refers to replacing coal in the energy mix.
“Any tons that we don’t release today are more valuable in terms of avoiding global warming and the tons that we intend to avoid in 2040,” said Mario Mehren, Chief Executive Officer of Winter. Said Chauldea, who signed the letter.
The Paris Agreement aims to limit global warming to 2 degrees Celsius above pre-industrial levels and aim at 1.5 degrees.
The EU aims to reduce net greenhouse gas emissions by 55% by 2030 from 1990 levels and eliminate by 2050.
The role of gas depends on factors such as the amount of emissions that can be captured and stored in the future and how to fix methane leaks from gas infrastructure, Joeri Rogelj, lead author of the report, the Intergovernmental Panel on Gas Infrastructure. Climate Change (IPCC) and Director of Research at Grantham Institute at Imperial College London.
“In that context, non-stored and non-carbonized gas is not part of a significant sustainable investment,” he added.
Sandrine Dixson-Declève, co-chair of the Club of Rome think-tank and one of the EU’s expert advisors on sustainable finance taxonomy, said the rules needed to reflect climate science.
“No one denies that gas can help change that. But that doesn’t mean it’s in accordance with the Paris Agreement. ”
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