ADIPEC puts focus on energy companies' value chain emissions
This year’s summit in Abu Dhabi places increased focus on energy companies’ climate commitments, with top executives talking about their scope emissions; just two months before UAE hosts COP28
The significance of value chain emissions in the energy sector received attention from top executives at ADIPEC in Abu Dhabi this week. Hala Gorani moderated a talk titled “Addressing the invisible”, featuring leaders of TAQA, Technip Energies, OMV Petrom, and others.
One company’s scope 3
When asked how long it would take for new guidelines, that will reduce value chain emissions, to be implemented, TAQA Group CEO, Khalid Mohammed Nouh, volunteered his thoughts:
“The issue is that even after standardizing, one company’s scope 3 emissions are another company’s scope 1 emissions.
“Almost 90% of any company’s emissions are going to be scope 3 so there has to be an incentivized scheme across the entire value chain for everyone to be aligned.”
Christina Verchere, CEO of OMV Petrom, responding to the moderator’s question about incentives, said that incentives need to come from many places.
“Whether you say incentive or pressure,” she said.
A listed company posts performance reports every year and “that is what drives you [the company] to get the performance that you need. There’s nothing worse than companies putting targets and missing them.”
According to Vitol CEO, Russell Hardy, the biggest challenge on the decarbonization journey, for his company, is that shipping emissions are a challenge as most of Vitol’s emissions are Scope 1 and Scope 2. “[Soon], European companies will be required to disclose specific information about their business and emissions… Which will help to create a baseline and drive improvements from that baseline…. The biggest challenge is the international challenge, creating a common goal across businesses across the world.”
Incentives need help
Matthew Harwood, Climate Investment’s Chief Strategy Officer, added that “the biggest hurdle is scaling up the technology, getting it financed and getting it in place where it’s needed.”
Citing an IEA report that “75% of technologies for the abatement of all greenhouse gases are there already,” Harwood said that, “this is less about finding a technology and more about deploying it at scale.
“These incentives are going to need help on permitting.
“The essential part of COP will be figuring out how we can transfer finances to the developing world to help them with their energy transition. Personally, I think carbon markets will have a key role to play.”
Samir Karoum, Technip Energies’ Chief Strategy and Sustainability Officer, offered his thoughts: “It took wind and solar 20 years to reach a cost that is competitive, and we don’t have twenty years.” Pointing out that 2050 is less than 30 years away, he said, “To reach the net-zero 2050 target, we need to have a milestone in 10-15 years.”
TAQA will be there
In regard to identifying each stage of the chain, Nouh said that it is “quite difficult” to quantify anything in Scope 3 even today because “reporting is not there yet… If we can measure it, we can manage it.”
He referred to next week’s MENA Climate Week in Riyadh, where Gulf leaders, expected to be at COP28, will meet to discuss their progress with regard to the climate commitments they have made.
“TAQA will be a part of it,” he said.
Energy & Utilities has reported on several projects TAQA is involved in, including investment in a Saudi Energy Park, acqusition of a major wastewater manager, and its part ownership of the Al Dhafra Solar IPP project.
David Haziri contributed reporting
Photo credit: Adipec
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