Eni scales up renewables but net carbon intensity largely unchanged

Italian oil and gas company Eni has committed heavily to renewable power production as part of its decarbonization efforts.

The group has a strong hydrocarbon presence in the U.S., with a portfolio of upstream and downstream assets, but is shifting away from oil towards gas, as well as rolling out a substantial alternative energy infrastructure.

Despite building up its clean energy profile in recent years, overall net carbon intensity across the group remains largely unchanged, as Evaluate Energy data shows.

Source: Evaluate Energy Single Company Emissions Dashboard

Net carbon intensity has fallen fractionally since 2018, by about three per cent, though the company hopes this will become a 15 per cent drop by 2030, led mainly by improvements within its upstream business.

Overall, Scope 1, 2 and 3 emissions have fallen more significantly, with a 17 per cent reduction in 2022, compared to 2018 levels.

Total energy production from renewable sources – notably wind and solar – is rising fast, reaching 2,552 gigawatt hours (GWh) in 2022, up from just 12 GWh in 2018.

It is an area that has seen especially strong growth since 2020, momentum that the company hopes to continue to build as part of its 2050 carbon neutral plan.

Eni aims to grow renewables capacity to more than 15 gigawatts (GW) by 2030, pointing to a huge expansion in the decade ahead.

Source: Eni

In 2021, Eni set up its Plenitude unit to drive its clean energy mission, which also manages the sale and marketing of gas and electricity for households and businesses, and the management of charging points for electric vehicles.

Its most recent acquisition — via Plenitude’s GreenIT joint venture — will see the development of four more renewables projects in Italy with a capacity of up to 200 megawatts (MW).

These will use agri-voltaic technology, which involves installing raised structures to achieve synergy between agriculture and the production of renewable energy.

Gas focus

Oil and gas, however, remains integral to the group’s global portfolio, with total daily hydrocarbon production of 1.6 million boe/d in 2022, though increasingly skewed towards gas.

Eni sees natural gas as a critical bridge energy source during the energy transition and is focused on increasing its share of production to 60 per cent of hydrocarbons output by 2030, and over 90 per cent in 2050.

This includes growth in its LNG activities with contracted volumes expected to rise to over 18 million tonnes in 2026, more than double that of 2022.

This rationale has steered recent M&A activity, including its US$5-billion acquisition with Var Energi of Neptune Energy in June, and the US$300 million disposal of oil assets in the Congo to French independent, Perenco, though it retains its gas holdings in the West African country.

Neptune Energy operates fields across the U.K., Norway, Germany, Algeria, the Netherlands and Indonesia, but with a heavy emphasis on gas, comprising 77 per cent of its overall production.

Source: Presentation “Eni to acquire Neptune Energy” June 2023.  For more on Evaluate Energy Documents, watch a short video here or click here for more information. 

Eni’s CEO, Claudio Descalzi, says the acquisition supports the objective of reaching net zero emissions (Scope 1 & 2) from the group’s upstream operations by 2030.

The acquisition ticks other boxes, too, with Neptune advancing various carbon capture and storage (CCS) schemes in Norway, the Netherlands and the U.K., another dimension to Eni’s decarbonization drive.

It aims to develop hubs for the storage of CO2 from hard-to-abate emissions generated by Eni’s and third-party facilities and is targeting a gross capacity of 30Mtpa by 2030.

Ongoing innovation

Other threads in Eni’s sustainability drive include bioenergy through the development of biomethane and biofuels.

It also expects to see a progressive increase in the production of new energy carriers, such as hydrogen.

In the U.S., it recently signed a new co-operation pact with Commonwealth Fusion Systems (CFS) — a spin-out of the Massachusetts Institute of Technology (MIT) — to accelerate the industrialization of fusion energy.

CFS, in which Eni is a strategic shareholder, is working to have a first pilot reactor capable of generating energy from fusion operational as early as 2025, with a view to the first grid-connected industrial plant planned for early next decade.

At the same time, the company is continuing to invest in reducing methane emissions from production and embedding other innovative mitigation measures on its latest oil and gas projects.

That includes the offshore Baleine deposit in Côte d’Ivoire, which Eni believes will be Africa’s first Scope 1 and 2 net zero development.

Emissions will be compensated through several initiatives, including projects to preserve, restore and manage forests and savannas, as well as the distribution of energy-efficient cookstoves, produced locally, which the company says will improve the livelihoods of 800,000 people.

First production from Baleine, which holds 2.5 billion bbls of oil and 100 billion cubic metres of associated gas, is expected in mid-2023.