Reduce and mitigate our GHG emissions
As part of its progress towards a low carbon future, the Company is focused on progressively reducing emissions from its operations and decarbonising its portfolio.
2030 targets
Galp has in place an ambitious but pragmatic energy transition strategy. The carbon intensity performance of Galp’s current portfolio is already one of the lowest in the sector. Our upstream portfolio has a carbon intensity close to 50% lower than the industry average, according to International Association of Oil&Gas Producers (IOGP). Adding to this, the integration of renewables at Galp is currently over four times superior to the average of the peers, in relative terms based on hydrocarbons production.
With a pragmatic and realistic approach to the energy sector and a significant emission reduction plan already underway, Galp has the ambition to reduce its absolute operating emissions by 40% until 20301.
This target is based on the development of already identified projects and reflects the Company’s current focus on reducing its carbon footprint, demonstrated through recent investment decisions on key projects like the first 100 MW electrolysers for green hydrogen production. Additionally, substantial investments in operational energy efficiency, electrification, and a robust commitment to renewable electricity generation will ensure the right direction towards further reducing our emissions and decarbonise our portfolio throughout the decade.
In addition, Galp defined two carbon intensity reduction targets which reflect its progress towards a lower carbon future, of the energy that we produce and of the energy that we sell to our customers, also with reference to 2017.
1 These targets consider 2017 as a baseline as it marks the start of the diversification of our portfolio and commitment to the development of a transition strategy.
Carbon intensity methodologies and benchmarking
Galp acknowledges that communicating on carbon metrics and methodologies raises confidence and trust from stakeholders. Towards this goal, Galp believes there is a clear need to develop a common approach for the O&G sector.
Galp’s carbon intensity use independent metrics that also include the exposure to indirect value chain emissions (scope 3). These are emissions over which Galp has limited direct control and are complex to manage. Furthermore, the current methodologies for measurement of these emissions consider diverse approaches for intensities’ assessment and makes benchmarking extremely difficult, aspects which should be carefully considered when reflecting on our way forward or supporting effective portfolio decision-making processes.
Considering our portfolio options and the opportunities and challenges resulting from the energy market’s dynamics across the wide and diverse activities included in our value chains, Galp may review the applicability of medium-term carbon intensity targets, which extend beyond our direct operations.
Nonetheless, the trajectory remains clear, as the integration of low carbon energies and the increased renewable power generation will be fundamental to preparing Galp to address future options and continue to decarbonise its portfolio and the energy it supplies, maintaining an alignment with society and EU targets.
Learn more about our carbon intensity metrics.
2050 net zero ambition in line with society
The current short and mid-term ambitions are the first and critical steps towards the ambition to be net zero by 2050, in line with society demand evolution. As the energy transition accelerates and society moves towards a lower carbon future, Galp will adapt its businesses accordingly and our investments and portfolio will mirror this progress. However, for longer time horizons, the level of uncertainty of the relevant variables is so high that it is not feasible to make realistic projections in terms of specific projects and related investments. This is especially pertinent given that it may not be technically and/or economically feasible at present to develop some of the low carbon solutions and technologies that will become available in the future.
Our energy mix will continue to change over time and Galp will remain committed to supplying affordable, reliable and sustainable energy to its customers.
Methane
The Company’s methane emissions have a relatively low weight in its operational emissions (<1% of total scope 1 and 2 emissions in 2023) and are mostly associated with non-routine flaring in non-operated upstream assets.
Notwithstanding this, Galp aims to reduce methane emissions from its operated assets, which represent 23% of its overall methane emissions, in line with industry expectations.
All our carbon reduction ambitions are expressed on a CO2e basis which incorporates the full impact of methane emissions. Lastly, all the upstream operators of Galp’s upstream production are signatories to the OGCI Methane Reduction Initiative and the Oil and Gas Methane Partnership (OGMP) 2.0.
Acting on methane emissions
The Sines refinery is the asset operated by Galp where methane emissions are most relevant. As such, several measures have been put in place to mitigate these emissions over the years. The refinery has installed a flare recovery unit in one of its flares to reduce flaring and associated methane emissions, as well as a vapour recovery unit to minimise the emissions of diffuse volatile organic compounds (VOC) including methane from loading and unloading hydrocarbons.Fugitive and diffuse emissions are also monitored and addressed by its annual LDAR (Leak Detection and Repair) Program. The refinery is developing a VOC management plan for the integrated management of all fugitive and diffuse emission reduction and monitoring initiatives of to further minimise operating VOC emissions.
2023 performance
During 2023, the Sines refinery was able to resume its normal energy consumption profile, and registered planned shutdowns to perform recurrent unit turnarounds, which led to a significant reduction of its operating emissions.
The commissioning of the Coral South FLNG concluded during the second half of 2023, and the asset is now operating in plateau conditions.
Overall, Galp’s operating emissions (equity) were 13% lower than in the previous year and 30% lower in relation to the 2017 baseline.
The carbon intensity of the produced energy reduced 19% in relation to the 2017 baseline and 6% year-on-year, while the carbon intensity of the energy sold downstream decreased 4% from the baseline and 1% from the previous year. These results reflect the aforementioned decrease in absolute operating emissions, as well as increases in the production and sales of low-carbon energy, like renewable electricity and biofuels.
Galp’s Carbon Footprint
Each year, Galp’s carbon footprint (operational control) is compiled, based on internationally recognised methodologies and recommendations, and is monitored and verified by a third party.
In 2023, Galp began defining a methodology to calculate and disclose the carbon footprint of its Renewables and New Businesses operations. The aim was to align the reporting of this business unit with that of the remaining businesses and continue to improve our emissions-related disclosure by extending it to the least carbon intensive part of our activities.
Learn more about our carbon metrics and footprint.
Moving towards low carbon solutions
Avoided emissions
Galp estimates the impact of several of its low carbon solutions by publishing a yearly estimate of the emissions avoided by their implementation. This estimate is calculated based on a reference scenario where these solutions and products would not have been implemented during the year they were sold or executed. In 2023, Galp avoided the emission of approximately 1,500 ktonCO2e through the integration and sales of biofuels for transportation purposes, the delivery of electricity for electric mobility, the production and sale of renewable electricity and the supply of decentralised energy production and energy efficiency services.
Tackling emissions in our businesses
Upstream
Galp’s Upstream portfolio is characterized by its high efficiency and low carbon intensity. At c.9 kgCO2e/boe1, it is close to half of the industry’s average of c. 18 kgCO2e/boe (IOGP average of 2022). This reflects the commitment to sustainability and energy efficiency in project design and operations. Our journey starts in project evaluation, where we fully incorporate the amount of carbon dioxide in the field into our investment decisions, focusing on developing assets with low carbon intensity.
- Newer projects, such as the Bacalhau field development, located in the Brazilian Santos basin, are characterized by low field lifetime emissions. The Bacalhau FPSO, currently in construction and forecast to come online by 2025, will feature a combined cycle gas turbine system to increase the efficiency of the power system and reduce associated emissions. Combined with an optimised gas system, this will allow greater energy efficiency within this asset and reductions in emissions from power generation and non-routine flaring. The result will be a world class lifetime emission intensity of c.9 kg CO2e/boe.
- The Company maintains a focus on the continuous improvement of the efficiency of its non-operated assets in production. It works with operators on identifying and implementing further emission reduction initiatives, such as improving fugitive emissions inventories (including methane), commissioning flare gas recovery systems and also identifying other initiatives that can lead to higher energy efficiency and lower emissions.
Galp’s commitment to environmental sustainability is demonstrated by its commitment to the World Bank's Zero Routine Flaring by 2030 initiative. This aims to end routine flaring hydrocarbon production projects, which contribute significantly to greenhouse gas emissions. Currently, all the upstream projects that Galp is involved in operate without routine flaring.
1 Galp's upstream carbon intensity follows the IOGP recommendations, which includes emissions from energy usage and flaring and excludes emissions from processes considered as midstream in the Coral FLNG.
Industrial & Midstream
- Efficiency and emission reductions at Sines
In 2023, the Sines Refinery continued to focus on improving the efficiency and integrity of its operations. During the planned turnaround, several energy efficiency projects were implemented. These included the conclusion of the replacement and upgrade of the FCC’s recovery boiler, and of several exchangers - which were replaced by more advanced technology with higher thermal transfer - and of reactors in the platforming unit. These projects are expected to reduce emissions by c.70 kton CO2e/year when fully online.
Throughout the year, further energy efficiency investments were identified and approved. These are scheduled for implementation between 2024-2025 and include pre-flash gas re-routing and electrification projects targeting an associated emissions reduction of c.40 kton CO2e.
Furthermore, in 2023 a site-wide energy assessment was carried out to evaluate and identify additional opportunities to improve energy efficiency to complement the refinery’s decarbonisation roadmap.
Progress in the digitalisation of the operations was also made, with the ELLA (Energy Lean & Live Advisor) tool supporting the management of utilities allowing for more versatility, efficiency and robustness in their usage.
In 2023, Galp continued to grow its HVO production at the Sines Refinery by co-processing, with an output of 108 kton. This is in addition to the c. 25 kton of second-generation FAME biodiesel produced at Enerfuel.
During the year c.362,000 m3 of biofuels were integrated into diesel (biodiesel and HVO) and gasoline (bioethanol) sold by the Company in Iberia. This includes the c. 25 kton of second-generation FAME biodiesel produced by Enerfuel. It translates into a significant reduction of approximately 1,000 ktons of carbon dioxide emissions over the product's lifetime, compared to its fossil fuel equivalent.
Investing in Sines’ low carbon future
The company is actively increasing the amount of renewable energy used in its operations and pursuing the development of low-carbon renewable fuels to power all forms of transportation. In 2023, Galp took a FID on its first large scale 100MW electrolyser for green hydrogen production. This large-scale project will allow the replacement of c.20% of the existing natural gas-based hydrogen production in the Sines refinery and may lead to a scope 1 and 2 greenhouse gas emissions reduction of c.110 ktpa. Galp also sanctioned investment in a 270 ktpa capacity HVO unit capable of producing biodiesel and SAFs, in partnership with Mitsui. The unit will use waste residues to produce renewable diesel (HVO) and SAF. This will allow to avoid c.800 ktpa of greenhouse gas emissions (scope 3, CO2e), when compared to its fossil fuel alternatives. These projects will be crucial for the decarbonisation of both the Sines refinery and of the company’s portfolio and will enable it to scale-up its low carbon fuel production to provide sustainable fuels for all modes of transport.
In late 2022, Galp signed an agreement with NextDecade to purchase 1 mtpa LNG to be from its Rio Grande LNG project, in Texas for 20 years, starting from 2027. The facility is currently under construction and will include Carbon Capture and Storage solutions, capable of substantially reducing the life cycle emissions of LNG. This gives Galp the option of purchasing LNG volumes whose liquefaction emissions have been captured.
- Carbon Capture Storage & Utilisation
Galp is exploring a range of long-term pathways and options to mitigate, reduce and utilise CO2 beyond 2030. Although it is difficult, at this stage, to predict which technology or end-use the Company will prioritise, Galp is eager to transform this challenge into an opportunity. To this end, it is investigating storage options or ways to directly use CO2 in industries such as food and synthetic fuel production, particularly when paired with green hydrogen.
Carbon offsets are not part of Galps shorter-term (2030) decarbonisation targets. They may, however, provide a useful tool for achieving Net Zero emissions by 2050 in line with globally recognised target setting standards.
Carbon offsets can also be important for our customers, who are increasingly concerned about their impact on climate and might therefore be interested in having Galp help them to offset the emissions from their fuel consumption until such time as they are replaced by viable low carbon intensity alternatives. To address these needs, Galp is implementing solutions that integrate offsets into its commercial offer. It is building capabilities and standards to manage carbon offsets and credits, from project development to trading, according to the best available recommendations to guarantee project quality and process reliability.
Learn more abou Galp's Carbon Offsets
Commercial
Galp pioneered the supply of low-carbon fuels in Portugal in 2022 by providing SAF for aviation and HVO for maritime transport. In 2023, Galp took another important step towards decarbonising heavy road transport with the launch and commercialisation of “Gasóleo Renovável 100%”(renewable diesel). This is produced from residual feedstocks and can be used in combustion engines and diesel generators without the need for engine modifications. It allows a reduction of up to 90% of life cycle emissions compared to a fossil equivalent.
Galp also expanded its offer of sustainable products to lubricants with the Galp Bio Lubricants line, a suite of biodegradable, vegetable oil-based lubricants complying with a large spectrum of specifications, including Ecolabel. The advantages of biobased lubricants include high biodegradability, superior lubricity, good thermal properties, base stock renewability and an environmentally friendly nature.
Galp Electric continued the accelerated growth of its public and private charging points network. These totalled more than 4,800 charging stations in Portugal and Spain, c. 25% of which are fast and ultra-fast charging stations. Sales of electricity for mobility increased to a total of 17 GWh and correspond to c. 13 ktons of avoided CO2 emissions compared to the same energy used on an ICE (internal combustion engine) vehicle, on a life-cycle basis.
EV powering at IKEA in Portugal
Galp partnered with IKEA to install c.280 charging points at IKEA stores around Portugal. This new infrastructure guarantees that 210 vehicles can charge a range of 100 kilometres simultaneously per hour in IKEA car parks. The Company continued to forge important collaborations that allow it to expand its public charging network and enable a reduction of emissions from partners.
- Galp decentralised solar solutions
Galp provides decentralised solar power production and storage solutions to B2B and B2C customers, in the residential, commercial, and industrial sectors using advanced technology to provide fit for purpose solutions and optimal results. In 2023, the Company added more than 6,000 installations in Portugal and Spain, surpassing a total of 10,000 installations in Iberia, with a total of c. 20 MW of solar panels. It also installed more than 700 batteries in its installations. This helps customers to improve self-sufficiency by combining power generation and storage as well as delivering extra yearly savings. The total electricity production from the c. 50 MW of equipment installed since 2020 is estimated to be c. 55.9 GWh and is thought to have avoided c. 5 kton CO2e during 2023, in comparison to the same amount of electricity purchased from the grid.
Galp’s innovative Software as a Service (SaaS) platform for managing ICE and EV fleets, charging infrastructure and their users continued growing. By 2023 it counted more than 2,700 vehicles and helped customers reduce costs while simultaneously avoiding c.1.5 kton CO2e emissions in comparison to normal, non-optimised operating conditions.
Renewables and New Businesses
Renewable electricity is a key driver of Galp's low-carbon energy growth. The Company started production in its first solar PV park in Portugal, at Alcoutim, and increased its installed capacity to 1.4 GWp in operation and generated c.2.3 TWh during 2023. This translates into c. 270 ktCO2e of avoided emissions compared to the production of an equivalent amount of electricity in the location where it was generated.
Aware of potential for generating offshore wind energy in Portugal, Galp explored opportunities for devoloping offshore wind capacity.
Through its Corporate Venture Capital activities, Galp invested $5 m in Verdagy, a US company pionnering the development of a type of scalable electrolysis technology for industrial applications targeting lower cost and less dependence on critical raw materials.
The Aurora JV (joint venture) with Northvolt is working towards taking the final investment decision on building Europe’s largest and most sustainable lithium conversion plant in Portugal.
Although the production of lithium hydroxide may lead to a small increase in Galp’s operating emissions, this material will be critical for battery manufacturing. It has the capacity to produce c. 50 GWh of batteries per year (sufficient for c. 700,000 electric vehicles). This would contribute significantly to reducing emissions in the transport sector. To ensure that the impact of this activity is mitigated, the JV is strongly focused on guaranteeing the sustainability of its activity and is defining roadmaps towards emission reductions from its operations and the life cycle of its products.
Corporate centre
Galp’s new office in the Allo building is currently pursuing LEED and WELL Platinum certifications. The new office reflects the Company’s commitment to sustainable energy and practices as it is designed to address the challenges of hybrid work while prioritising user comfort. The offices feature sustainable energy initiatives and resource management practices such as efficient lighting and equipment, on-site renewable electricity generation, electric vehicle charging, water efficient equipment, waste management, etc.
The new building will also help to enable the full electrification of our light duty vehicle fleet, aimed for 2028, and actively promotes other forms of sustainable mobility. It includes:
- more than 130 electric and hybrid vehicle charging points to serve the Company’s fleet which now includes 27% fully electric and hybrid vehicles.
- more than 70 racks with dedicated chargers for parking and charging of light electric vehicles such as electric scooters and bicycles.