The energy industry plays a relevant role in driving decarbonization across all sectors, betting on technological innovation and designing a just transition for all. This is a task in which people and their actions are once again fundamental.
Jesús Chillón, Country Manager of Repsol in Colombia
In 2015, the world collectively recognized, for the first time, the need to combat climate change with the adoption of the Paris Agreement. This historic milestone brought together nations from around the world to limit global warming to below 2 degrees Celsius above pre-industrial levels, along with the aspiration to limit the increase to 1.5°C. This Agreement entails the commitment to reduce greenhouse gas emissions, improve resilience to climate impacts, and mobilize financial resources for climate action. Once the goal was established, the great challenge we face as a global society is to make a fundamental change in the energy matrix by promoting the development of all solutions that can contribute to decarbonization, leaving no energy source behind.
This is what is known as ‘the energy transition’, which encompasses a wide range of strategies, such as the development of renewable energies, the electrification of sectors like transportation, greater energy efficiency, and the development of innovative technologies. To achieve such decarbonization, we must advance in a series of key factors: innovation, appropriate political frameworks, technological neutrality, substantial investment in renewable generation, the electrification of various sectors, and an energy transition that includes principles of efficiency, sustainability, and justice.
Today, there are numerous projects and initiatives around the world that have set the goal of achieving net-zero emissions by 2050. This includes large-scale wind and solar farms, the incorporation of infrastructure for electric vehicles, carbon capture and storage plans, investments in sustainable agriculture, as well as the implementation of energy efficiency projects in existing resources. While significant progress has been made in this regard, our progress towards zero emissions is uneven and insufficient. Many nations have set ambitious targets, and the renewable energy sector is growing at a remarkable pace. However, emissions continue to rise in many areas, so we must redouble our efforts to achieve these goals.
In this regard, the war in Ukraine resulted in, apart from much pain and suffering, a deep energy crisis. Sanctions on Russia and cuts in gas supply from this country raised doubts about Europe's ability to supply hydrocarbons, which drove up energy prices, metals, and agricultural commodities. The consequences were immediate, and throughout 2022 there was a sharp increase in inflation and a slowdown in economic activity. Therefore, it is important to learn that while emission reductions are necessary, the energy security of countries is fundamental for economic development.
The success of the global challenge of the energy transition will depend on the commitment and continuous investment of governments, companies, and individuals. It is essential for this transition to bear fruit that we adopt a comprehensive and multifaceted approach. There is no problem we cannot solve together, and very few that we can solve by ourselves. This implies strong international cooperation, clear supportive policies, substantial investments in clean energy technology, and active participation from the private sector. Social and economic disparities that may arise during the transition must also be addressed, ensuring that no one is left behind. This last aspect is what is known as ‘just energy transition’.
A just transition is essential to ensure that the burdens and benefits of this transformation are equitably distributed in society. Therefore, it is important that we work collectively to create a framework in which this change can take place. To do this, we must prioritize social equity, protect vulnerable communities, provide training and job opportunities for people who depend on fossil fuels, and ensure affordable access to clean energy. Only through immense collaborative effort, involving governments, industries, and civil society, can this framework be successfully developed and implemented.
The success of the global challenge of the energy transition will depend on the commitment and continuous investment of governments, companies, and individuals. It is essential for this transition to bear fruit that we adopt a comprehensive and multifaceted approach.
At Repsol, we have been working for a long time to decarbonize the energy we supply, without making it less affordable or reliable. We were the first oil and gas company to support the Kyoto Protocol in 2003 and the first energy company to commit to society and stakeholders to be net-zero emissions by 2050 (including Scope 3 emissions, that is, those derived from the use of our products). Our commitment is firm to contribute to two global challenges: providing universal access to sustainable, affordable, and safe energy, while making it compatible with climate change mitigation.
1. This commitment is taking us on a transformative path, full of challenges, but very exciting. If in 2018 we were a classic oil company, focused on maximizing production and growing the portfolio, five years later, we have transformed into a multi-energy company that produces clean energy in Spain, Chile, Italy, and the United States, and is on track to expand its renewable generation capacity to 20 GW by 2030. Our exploration and production business has completely transformed, focusing on operational efficiency, short-cycle projects and attractive returns, optimizing the portfolio (from 34 countries we have reduced to 14) and generating the cash required to undertake this green transformation.
2. A just transition is essential to ensure that the burdens and benefits of this transformation are distributed equitably in society.
mind in society.
4. Our refineries are becoming multi-energy hubs focused on efficiency, the production of ecofuels and synthetic fuels (and it should be noted that for every percentage point of ecofuels we incorporate into our fuels, 800,000 tons of CO2 are avoided in transportation) and the production of green hydrogen (on track for an installed capacity of 1.9 GWeq by 2030). Finally, our service stations are transforming into multi-supply points for low-emission fuels and electricity (expanding the network with over 1,500 installed charging points), as well as circular economy centers where used cooking oil is collected to process and transform it into low-emission fuels.
5. In conclusion, the path to net-zero emissions is a complex journey in a very challenging global historical context. The lesson we have learned at Repsol is that it is necessary to undertake it as soon as possible, as we hope that the green transformation we are immersed in can inspire others. The energy industry plays a relevant role in driving decarbonization across all sectors, betting on technological innovation, and designing a just transition for all. A task in which, as always, people and their actions are fundamental.
6. Together, we can build a sustainable and prosperous future for generations to come.
Colombian Association of Oil and Gas