Mon, July 22, 2024

Shell, Total and Green Transformation

Oil industry and emissions

Oil and gas companies are working to reduce greenhouse emissions. One of the major factors why the companies are willing to work harder to deal with such problems is the pressure from the investors. Several oil and gas giants such as Shell, Total and Repsol are the leading companies when it comes to green transformation.

According to the report released on January 13. This report examined integrated oil companies. Such companies are involved in every aspect of green production. The path to green transformation is full of obstacles. However, oil, as well as gas companies, should to go green; otherwise, they will become less competitive on the market.

The regulation will help to achieve this goal, but it won’t be enough to solve all the problems. For example, current carbon taxes are ineffective as they cover all small part of global oil production or consumption.

In this situation, investors should apply more pressure on the companies to reduce greenhouse emissions. This way, it will be easier to tackle climate change as it will take time to reach the global governmental consensus on regulation.

It is worth mentioning that more than 50% of oil and gas companies take climate change into account when it comes to business decisions. Also, they have strategies on how to reduce emissions based on the information provided by the Transition Pathway Initiative. This group is gathering and analyzing the information about the corporations and their plans regarding the transition to a low-carbon economy.

However, multinational corporations should work harder to solve the issues connected with green transformation. Recently, the International Energy Agency released a report that once underlined the importance of social acceptability and profitability.

Green transformation and main challenges

Oil companies and green transformation

There are several challenges on the path to green transformation. Oil and gas companies emit greenhouse gases through direct operations. For example, refineries emit gases whey they burn fuel. Also, when companies are buying electricity from others to run their facilities, this is another example.

Moreover, another source is the combustion of the products they sell to clients. Also, when a customer goes to the filling station, this is a severe challenge for the companies. This category, known as scope 3, represents about 90% of integrated oil companies’ emissions.

As mentioned-above that’s an issue because companies can’t do much to tackle this problem,

It is important to note that Shell, Total, and Repsol achieved better results than others. They are the only integrated oil companies that decided to include scope three emissions in their reduction costs.

The three companies, along with Norway’s Equinor, are industry leaders when it comes to transition to renewable energy generation. Moreover, those investments represent the most effective way to reduce emissions following by producing more natural gas.

Oil and gas companies continue to face pressure to address climate change. According to the International Energy Agency industry allocated less than 1% of its annual capital spending toward low-carbon projects.

The industry has the potential to take measures to reduce emissions by allocating funds for various projects.

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