Improving the carbon intensity of our current production mix

Mouillage du cargo Seri Balhaf avant chargement du gaz naturel liquéfié. Balhaf, au Yémen Mouillage du cargo Seri Balhaf avant chargement du gaz naturel liquéfié. Balhaf, au Yémen

To combat climate change without curbing economic and social development, the carbon intensity of the fossil fuel mix must be reduced. At Total, this is one of the three key focuses of our climate strategy. As an energy source that is more cost-effective and above all produces less carbon emissions than other fossil fuels, natural gas is one of the keys to the energy transition.

Why it matters

To limit the scale of global warming, temperatures must be prevented from rising by more than 2°C above pre-industrial levels by 2100. The principal cause of climate change is the release of greenhouse gases, coming partly from the burning of fossil fuels (coal, oil and gas).

Under the 2°C scenario set out by the International Energy Agency (IEA), oil and gas will continue to cover about half of energy needs worldwide by 2035. In order to meet the demand for energy while combating climate change, the share of coal in the fossil fuel mix1 must be reduced.

As the world’s fourth largest oil and gas company, we have a responsibility to be part of the effort to take on this dual challenge. That is why we have set ourselves the goal of becoming the leader of responsible oil and gas by reducing the carbon intensity of our own fossil fuel mix to a minimum. Steps to promote natural gas and increase its share in our output will spearhead this strategy.

1 The term energy mix refers to how final energy consumption breaks down by primary energy source.

Developing an assertive strategy in gas

60%
Share of natural gas in our hydrocarbon mix by 2035

Not only is natural gas an easily accessible and abundant energy source offering a perfect fit with renewables, but it is also far and away the least polluting fossil fuel. When used to generate power, it releases almost half as much CO2 as coal. It is for this reason that we ceased all coal production in August 2015.

We are the global benchmark in natural gas, operating along the entire natural gas chain on five continents. Over the past ten years, we have invested heavily in this area while working to reduce technical and logistical costs to make natural gas a more competitive option. Today, this energy source already accounts for nearly half of our production mix, making Total the world’s second-largest private gas operator. We are also investing downstream in the gas value chain so as to keep pace with growing demand and carry gas all the way to residential end users. With our 2016 acquisition of Lampiris, we now market gas and power to one million European consumers. And through our 2017 acquisition of PitPoint, we are the leading provider of natural gas vehicle fuel in Europe.

To maintain the advantage that gas offers over coal, however, we need to ensure that methane emissions are limited to a strict minimum, as methane’s global warming potential is much higher than that of CO2. We are continuing our efforts to reduce our methane emissions from the production and transportation of gas, which represent today less than 0.5% of our marketed operated production. We are also firmly committed to our partnership with the Climate & Clean Air Coalition, an association supported by the United Nations that aims to improve methane emission measurement and reduction methods across the industry.
 

Developing carbon capture, utilization and storage technologies

10%
of our R&D budget will be allocated to carbon capture, utilization and storage (CCUS)

Another way to limit CO2 emissions in the atmosphere involves capturing the CO2 at the source and storing it underground or reusing it. This technology is called carbon capture, utilization and storage (CCUS).

We play an active role in developing this technology both independently and through partnerships, with the aim of evaluating its real potential in the fight against climate change and making it effective, safe and feasible on a large scale. A pioneer in this area, we invested heavily in the Lacq Pilot Project and contribute to other initiatives elsewhere in the world, in particular in Norway.

Carbon capture and storage: a Climate change answer

Encouraging global initiatives

A collective response is needed to meet the challenges of the 2°C scenario. Implementing carbon pricing, eliminating routine flaring and managing methane emissions will require public and private sector participation. To speed up progress, Total is actively involved in these areas, through international organizations and initiatives.

Oil & Gas Climate Initiative
We are a founding member of the Oil & Gas Climate Initiative (OGCI), which has brought ten national and international oil and gas companies together to address climate issues since September 2014. The goal is to identify best practices and strengthen the industry’s positioning as an active player in the fight against climate change. The OGCI focuses its efforts in particular on raising awareness about methane emissions and developing economically viable carbon capture and storage technology. In November 2016, the OGCI announced the creation of a $1 billion fund to finance projects and technologies with the potential to significantly reduce emissions.
 
For more information about the OGCI, take a look at our infographic.
Business Leadership Criteria on Carbon Pricing

Since November 2014, we have supported the U.N. Global Compact’s Business Leadership Criteria on Carbon Pricing initiative, which aims to encourage industry to incorporate carbon pricing into its investment decisions and promote this practice. Since 2008, we have applied a carbon price per metric ton of CO2 released. As a result, we factor in a carbon price of $30 to $40 per metric ton of CO2 released for all our new investment projects today.

Paying for Carbon

Alongside five other companies, we played a key role in May 2015 in the launch of Paying for Carbon, a call to governments to introduce a carbon pricing mechanism to discourage high carbon operations.

World Bank Carbon Pricing Leadership Coalition

Since March 2016, Total has been an active member of the Carbon Pricing Leadership Coalition (CPLC), whose objective is to encourage governments, civil society and industry to share experience and work toward the implementation of carbon pricing.

Zero Routine Flaring by 2030

In November 2014, we were the first oil and gas company to join the World Bank’s Zero Routine Flaring by 2030 initiative, which aims to support the drive to eliminate flaring of associated gas at oil production sites. In an effort to meet this challenge, we have set ourselves a target of reducing routine flaring by 80% over the 2010-2020 period.

Climate & Clean Air Coalition

In November 2014, we were the first energy company to join the Climate & Clean Air Coalition (CCAC), a partnership between governments and industry to improve the methods for measuring and controlling methane emissions from natural gas production.

Task Force on Climate-related Financial Disclosures (TCFD)
Total supports the voluntary recommendations of the industry-led Financial Stability Board (FSB) Task Force on Climate-related Financial Disclosures (TCFD).
 
"Climate change has to be and is integrated into Total’s strategy. Transparency on climate and long-term issues through adequate reporting and disclosure is key for investors and other stakeholders; that’s why Total decided in 2016 to publish on a voluntary basis its first dedicated annual “Climate Report” and we encourage other companies to do so. I have signed a letter supporting and commenting the initiative and look forward to Total working with the Task Force on the most efficient ways to implement its recommendations so that investors obtain comparable data while businesses remain responsible for defining which information about climate-related risks and opportunities is material and should be disclosed in financial fillings and which additional information they choose to report on a voluntary basis.” 
 
Patrick Pouyanné, Chairman of the Board and Chief Executive Officer.

 

Advocating Carbon Pricing

Clear economic signals over the medium to long term are vital to reduce greenhouse gas emissions. Since 2008, we have encouraged the development of carbon pricing mechanisms in the major economic regions.

A price of between $30 and $40 per metric ton of CO2 would be enough to:

  • Promote the switch from coal to gas, which emits half as much COin power generation
  • Steer investment toward the technologies required to reduce emissions, such as carbon capture, utilization and storage.

For example, we support the immediate adoption of a floor price of approximately €20 per metric ton of CO2. This would strengthen the European Union emissions market and accelerate the switch from coal to natural gas in power generation.