Italy Gas Pipeline Operator Sets Ambitious Zero-Emissions Goal
(Bloomberg) -- Italian gas pipeline operator Snam SpA set an ambitious net zero-emissions target for 2040 and raised guidance as it continues to invest in green energy and joint hydrogen projects.
In a 2020-2024 strategic plan announced Wednesday, Europe’s largest gas pipeline company announced a 7.4 billion-euro ($8.8 billion) investment plan for development and energy transition, 1 billion euros more than in the previous plan.
Snam plans to double investments in new activities for energy transition, totaling 720 million euros by 2024. The company said 600,000 tons of carbon dioxide equivalent will be avoided in the plan due to energy transition activities.
Read more: Snam to Invest About EU7.4b in 2020-2024 as Part of New Plan
Oil and gas companies are setting net-zero targets to cover so-called Scope 1 and 2 emissions from production of energy. Snam’s new plan calls for reaching net zero emissions within 20 years by cutting direct and indirect carbon dioxide emissions driven by a Scope 1 and Scope 2 reduction target of 50% by 2030.The company also announced a commitment to cut Scope 3 emissions, which come from end-use of products.
“We have started work with suppliers and customers and we could compensate those emissions that we or our costumers are unable to eliminate with new businesses like Arbolia,” Chief Executive Officer Marco Alvera said Wednesday, referring to a tree-planting start-up with state lender Cassa Depositi e Prestiti SpA.
European oil majors Royal Dutch Shell PLC, Total SE, BP PLC, Eni SpA, Repsol SA and Equinor ASA are expected to reduce Scope 1 and 2 emissions by 265 million tons of carbon dioxide by 2050, according to Bloomberg NEF.
Alvera is also pushing into the hydrogen business through deals with technology companies via equity investments. The company said 50% of investments in the new plan are dedicated to hydrogen-ready infrastructure.
The company doesn’t foresee widespread consolidation in utilities but expects “a greater degree of collaboration,” Alvera said Wednesday in a Bloomberg Television interview. “We have bought small and medium-sized enterprises that are giving us value and we put them in collaboration with each other,” he said during a press conference for the strategic plan.
The European Union has put hydrogen at the heart of measures to cut greenhouse gases and reach climate-neutrality by 2050. Hydrogen, if made with renewable sources, could replace coal, oil, and eventually natural gas, and help eliminate about a third of emissions from industries like steel and cement by mid-century, according to Bloomberg NEF.
Goldman Sachs Group Inc. estimates that the hydrogen market could be worth 10 trillion euros by 2050 globally for utilities alone.
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