Energy and climate

Galp supports the pursuit of a global and effective agreement. We will thus continue to contribute constructively to the development of appropriate measures to overcome the challenges of energy and climate, seeking a sustainable commitment and supporting the adoption of a carbon-reduction strategy based on a single market, one that is cost-effective and sustainable in the long term, globally shared and transparent to society.

Carlos Costa Pina, Chief Sustainability Officer, Chief Risk Officer and Executive Director

We are committed to contributing to the energy needs of the future in an efficient and responsible manner, responding to the challenges of energy demand and climate change in the current global policies context. To that end, we are focused on:

• Seeking a portfolio that meets the challenges of a low-carbon economy by promoting energy efficiency, minimising the intensity of GHG emissions, as well as an adaptability to the effects of climate change;
• Integrating the risks and opportunities connected to climate change into the Company's strategic formulation processes, overseen by the Board of Directors (BD) and the Executive Committee (EC) through the Sustainability Committee and the Risk Committee;
• Ensuring the sustainability and resilience of our E&P portfolio, which should be competitive and profitable in any long-term oil and carbon pricing scenario;
• Developing an efficient and competitive downstream business, supported by innovative and differentiating solutions that promote the transition into a low-carbon economy;
•  Developing new solutions and business opportunities supported by low-carbon energy sources, both in our operations and in our customers and partners, responding to the challenges posed to their industry;
• Solutions in mobility, decentralised energy production or domotics that influence the energy sector;
• Continuously reducing the carbon intensity of our activities and monitoring our environmental footprint.

To achieve this commitment, we have the following objectives and goals:

• Investment in low-carbon and new business models expected to account for 5 % of total capex by 2020, and 5%-15% from 2020 onwards.
   
• From 2021 onward, we are committed to acquiring of 100% renewable electricity in Portugal, expecting to reduce our total Scope 2* emissions to close to zero per cent.

*(emissions from purchased or acquired electricity, steam, heat and cooling)

• In Refining:
  • reach the first Solomon reference quartile of Western Europe in energy efficiency and increase the refining system’s integration by the end of the decade;
  • by 2020, we will invest c. € 45.2 m in eco-efficiency projects, avoiding the emission of more than 120 kt CO2e;
  • by 2022, we will cut the carbon intensity 25% in Sines refinery and 15% in Matosinhos refinery, based on 2013;

    Goals for 2018	EII (Energy Intensity)	Kg CO2/CWT
    Sines refinery	92.7	31.3
    Matosinhos refinery	81.6	29.1

• In the marketing of oil products business, we made the commitment of reducing consumption resulting from the purchase of electricity, reflected in the reduction of indirect CO₂ emissions.

We have implemented the following by 2017:

• We have produced low carbon intensity energy and have diversified our portfolio;
• We have incorporated a carbon price of $40/ton in the appraisal of investment projects, testing their long-term resilience;
• We have adopted non-financial reporting practices related to carbon management;
• We have joined the “Zero Routine Flaring by 2030” initiative of the World Bank; We have joined the Take Action | We Mean Business platform in partnership with the United Nations Framework Convention on Climate Change (UNFCC);
• All our offshore operations in Brazil were equipped with CO₂ separation and re-injection systems;
• We have also implemented technological solutions and offer integrated energy efficiency services that benefit our customers, reducing costs and emissions.
• Since 2015, the Matosinhos refinery has maintained its position in the Solomon reference quartile of Western Europe in energy efficiency, maintaining its leading position in Iberia;
• At the Sines refinery, we reduced the hydrocracker's total electricity consumption by 11% by implementing an innovative solution (equivalent to 2.5 MW), which corresponds to 857 kg of CO₂ equivalent avoided;
• We have natural gas cogeneration units;
• We produce raw materials for biofuels (Brazil);
• We produce 2nd generation biofuels (Enerfuel plant);
• Our refining system (Sines and Matosinhos) is certified in Energy (ISO 50001).

We plan to implement the following between 2018-2022:

• Develop the natural gas production project in Mozambique, contributing to a gas increase in our production portfolio;
• Increase our presence in energy generation from renewable sources that are competitive, particularly within a context of lower carbon intensity;
• Endorse the Financial Stability Board's (FASB) Task Force on Climate-related Financial Disclosure (TCFD) to transparently disclose the financial risks connected to climate change;
• Develop solutions and initiatives that are focused on an efficient use of energy and eco-efficiency, at our filling stations and with partners, and expand the electricity grid, CNG and LPG Auto;
• Develop biofuel production as a contribution to a low-carbon economy (e.g. 2nd generation biodiesel through HVO co-processing technology and residual raw materials, biomethane, biorefineries);
• Continue to implement an energy efficiency programme in the Refining & Marketing segment;
• Review the “Guide for the development of climate change adaptation plans - Risks for critical infrastructures”;
• Track the development of the “Roadmap to Carbon Neutrality by 2050 (RCN2050), for Portugal” through participation in the BCSD Portugal working group.