We are firmly committed to the ambition expressed in the Paris Agreement to limit the global average temperature of the planet by the end of this century to 2°C with respect to preindustrial levels. As signatories of the Paris Pledge for Action document, Repsol supports said Agreement and strives to be an active part of the solution to climate change.
There are many possible ways to transition into a low-emissions future. At Repsol we have identified three core elements: improved energy efficiency and energy savings; the reduction in emissions from power generation, where natural gas will be a key player), and the deployment of low-emission technologies in final sectors.
We establish our strategic decisions and lines of action at the highest executive level, with the Corporate Executive Committee as the body directly responsible for managing climate change.
Our climate change strategy is based on five pillars: carbon pricing; energy efficiency; the key role of natural gas; Carbon Capture, Utilization & Storage (CCUS); and renewable energy sources.
CO2 emissions reduction objectives have a weight of between 5% and 20% in businesses' objectives. The Company's performance in the fight against climate change directly affects the variable remuneration of employees.
One of our objectives is to reduce CO2 equivalent emissions by 1.9 million metric tons between 2014 and 2020. In 2017 we reduced our emissions by 216,000 metric tons of CO2 equivalent, thereby reaching the 1.4 million metric ton mark, almost 74% of the objective established for the entire period.
Carbon pricing is an essential element in the transition to a low-emissions future. In order to make investment decisions for new projects, at Repsol we have established an internal carbon price of $25/t CO2, with the objective of increasing this to $40/t CO2 in 2025.
Our Company is also committed to efficiency as the main driver of emissions reduction, in order to reduce the energy and carbon intensity of its operations. To this end, we have defined specific objectives and plans including, among others, energy integration projects of units, process optimization, and continuous improvement in the efficient operation of the facilities.
CO2e (Mt) reduction emissions
Medium-and long-term strategy
At Repsol, we constantly analyze the different energy supply and demand models to understand how the industry can address future challenges in terms of climate change mitigation and energy supply.
Additionally, we are developing our own scenarios that are compatible with a 2°C future and, more specifically, with the International Energy Agency's Sustainable Development Scenario (SDS).
emissions reduced in 2017
We are addressing this challenge by participating in different international associations such as The Global Oil & Gas Industry Association for Environmental and Social Issues (IPIECA) and initiatives such as Oil & Gas Climate Initiative (OGCI). We are exploring these models and long term scenarios, in conjunction with other companies in the sector.
We believe that these new scenarios offer a significant opportunity for innovation and investment in low greenhouse gas (GHG) emission solutions.
We foresee an increase in the demand for natural gas over the next few years, compared with the demand for coal. Natural gas produces approximately half as many emissions as coal. Using natural gas instead of coal as a fuel is a great opportunity to reduce CO2 emissions on a huge scale, at a lower cost for society. It really is the most efficient way to promote a structured transition to a low-emissions future. Currently, the percentage of gas has risen to make up 63% of our production assets and 74% of our reserves.
Another part of our strategy is carbon capture, storage and use (CCSU) technology. At Repsol, we don't just support the deployment of these technologies, but also strive to ensure that the projects are technically and economically viable, sustainable, and socially acceptable.
We are also continuously monitoring the latest trends and technologies developed in the field of renewable energy sources, investing in sustainable mobility and contributing to the reduction of emissions through the development of biofuels and advanced fuels.
Through the Oil & Gas Climate Initiative-Climate Investments (OGCI-CI) fund, Repsol and other large industry companies are investing in low-emission projects and technologies. The planned investment is $1 billion over 10 years.
Likewise, our Energy Ventures and Technology units are investing in different areas of knowledge, such as biofuels, graphene and electric mobility, among others.