Total plans to achieve renewable energy business 20% of total business by 2030
In the context of global low-carbonization, energy transition, and the prospect of potential for renewable energy development, the international oil giants have adjusted their development strategies in order to obtain the initiative for future development. Among them, Total is a bright spot. It develops a low-carbon development roadmap, closely integrates corporate social responsibility, environmental issues and corporate strategy, and promotes low-carbon business from organizational structure, development strategy, and research and development support. Some achievements have been made in solar energy, energy storage and biofuels.
Total said that although oil demand will increase in the next 5 to 10 years, the increase will decline. On the one hand, the company will continue to invest in natural gas and on the other hand will increase its investment in renewable energy. It is estimated that by 2030, the company's renewable energy business will account for 20% of the total business.
Integration of strategy and environmental responsibility
The Paris Agreement came into force and became a new starting point for curbing global warming. Total believes that since oil companies have a certain responsibility for global climate change, they must also become important participants in solving this problem. Therefore, environmental responsibility should be integrated into the company's development strategy, reflected in the company's organizational structure, strategic objectives and research and development support.
In 2016, Total made major adjustments to its organizational structure. First, the Ministry of Strategy and Climate was set up, which was affiliated with the strategic and innovative divisions at the headquarters level, and was responsible for the fit of corporate strategy and environmental issues; followed by the three main business segments: exploration and production, refining and chemical, marketing and service. In addition, the Natural Gas, Renewable Energy, and Power Sector has been established to expand the midstream, downstream, and renewable energy businesses and improve energy efficiency.
After the integration of strategy and environment, Total aims to meet the needs of low-carbon transformation and development. The goal is to achieve a low-carbon business share of 20% by 2035 and be profitable. Thus, Total developed the company's low-carbon development path: First, to improve energy efficiency. Continue to reduce greenhouse gas emissions from production facilities and provide customers with solutions, products and services that use high-efficiency energy. The second is the development of renewable energy. In the next 20 years, the company will expand its power trading business and energy reserves, become a leader in the field of bioenergy (especially biofuels), and look for potential development opportunities in other areas of renewable energy. The third is to reduce the carbon intensity of existing production structures. Gradually withdraw from the coal business; strengthen the natural gas development strategy and strictly control methane emissions; innovate and promote carbon dioxide capture, utilization and storage technologies, and support carbon pricing mechanisms.
Low-carbon business links
In recent years, Total has continuously increased the development of natural gas business. At present, natural gas production accounts for nearly 50% of the company's oil and gas production, and it is planned to reach 60% by 2035. In the past decade, Total's natural gas liquefaction capacity has doubled to become the world's second largest LNG operator, with interests in 11 LNG plants and 5 LNG stations. The company plans to increase its existing LNG sales from 11 million tons/year to 20 million tons/year by 2020. In the past two years, Total has further increased the development of the natural gas business through acquisitions.
As early as in 1983, Total began to get involved in solar power business. Its development goal is to rank among the top three in the global solar energy field. Total’s biggest move was the acquisition of a 60% stake in Sun Power, the world’s second-largest solar power company, for $1.4 billion in 2011. So far, Sun Power has become the core force of Total Photovoltaic Power Generation, and its solar panel energy conversion efficiency is as high as 24.2%. In July last year, Total acquired the world’s leading high-tech industrial battery design and development company, Saft Company, for US$1.1 billion, which complements the existing solar energy business.
To promote the development of bio-energy business, in 2010, Total became a partner of American biotechnology company Amyris. In 2015, Total decided to transform the French La Mède refinery into a biofuel plant and put into operation in 2018. By that time, it could produce 500,000 tons of biodiesel, 25,000 tons of bio-naphtha and 60,000 tons of aviation each year. Fuel and so on.
For the existing business, Total controls carbon emissions by reducing emissions and increasing energy efficiency, and implements a carbon pricing mechanism of $30 to $40/ton carbon dioxide equivalent within the company when evaluating investment projects in combination with oil price forecasts or actual oil prices. . Beginning in 2010, Total's new project is no longer venting to burning natural gas. In 2016, Total's business scope of greenhouse gas emissions was 39 million tons of carbon dioxide equivalent, which was 23% lower than in 2010. It is planned that the combustion volume in 2020 will be reduced by 80% compared with 2010, and by 2030, it will completely cease to burn.
Carbon dioxide capture, utilization, and storage technologies are key to implementing a global two-degree-degree temperature control program. From 2010 to 2013, Total launched carbon dioxide capture and storage demonstration projects in France and accumulated a wealth of experience. In 2017, Total participated in the Monstad Carbon Capture Technology Center project in Norway. Total's financial investment in carbon capture and storage technology is increasing. R&D expenses have tripled in the past two years, and will account for about 10% of the company's research and development expenses in the future.
Enlightenment to China's oil companies
Total integrates environmental responsibility and low-carbon development into the company's development strategy, realizes the clean and low-carbon development of traditional oil and gas operations through technological investment and innovation, and carefully selects and treats alternative energy development fields in an investment or revenue (and) manner. The way of purchase completes technology accumulation and transformation and development.
Under the new situation, Total maintains a high degree of sensitivity to changes in the global energy environment, integrates corporate environmental responsibility with corporate development strategies, conforms to low-carbon development trends in energy, and formulates the company’s low-carbon development strategy to ensure the sustainable development of the company in the future. This will also have a certain enlightening effect on the low carbon transformation and development of China National Petroleum Corporation.
Oil companies need to change their roles, change themselves from passive to active, actively develop and apply low-carbon technologies, actively participate in carbon trading and carbon pricing activities, and become active carbon managers, transforming themselves from environmental responsibility to environmental issues. Leaders and leaders.
For a long time to come, oil and natural gas will still occupy an important position in the energy consumption structure. Reducing methane emissions, implementing carbon capture and utilization, reducing production energy consumption, and increasing production efficiency are the top priorities of traditional oil and gas operations. The company can take advantage of digital, networked, and intelligent technology innovation, as well as the innovation of production models and business models, to achieve the transformation and development of traditional business production methods.
Under the influence of national policies, international oil prices, and corporate strategic adjustments, international oil companies have experienced repeated processes such as entry, exit, and entry in the areas of alternative energy development such as solar energy, wind energy, geothermal energy, and biofuels, and have focused on development. . China's oil companies need to choose to intervene in related industries or occupy technical highlands on the basis of their own business development and actual national conditions, to avoid the development of "one-of-the-life" or "all-in-one" style.
For an industry that has a century of history and a very mature industry, such as energy, the cost of transformation and development is huge. You can choose to cooperate with a third party, invest in a startup that is determined to innovate, and use its own professional knowledge and resource network to help it develop and gain business opportunities. And potential, and control business development costs and risks.
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