By Jeph Ajobaju, Chief Copy Editor
Total, the multinational French oil firm, has rebranded as TotalEnergies to focus on renewable energy sources amid global agitation for green energy in place of fossil fuels that stoke up climate damage.
Its shareholders voted overwhelmingly in favour of the move and approved its environmental goals.
“We want to become a sort of green energy major,” said chief executive Patrick Pouyanné, as reported by the BBC.
Pressure from IEA
The decision was in part a reaction to the pressure being mounted by the International Energy Agency (IEA) for oil producers to stop drilling immediately in order to save the planet.
The IEA is well respected by governments and its report taken seriously.
The IEA – founded by rich industrial nations after oil shocks in the 1970s to promote secure and affordable energy supplies – says the world needs to stop drilling for oil and gas right now to prevent a climate catastrophe, per CNN reporting.
To reach net zero carbon emissions by 2050, the influential group said in a report that investment in new fossil fuel supply projects must stop immediately, and no new coal-fired plants should be approved.
The dramatic recommendations are part of a detailed strategy the IEA says would result in the world achieving the Paris climate agreement goal of limiting global warming to 1.5 degrees Celsius above preindustrial levels.
Why 1.5 degrees? Experts have repeatedly warned that exceeding the threshold will contribute to more extreme weather, greater sea level rise, wildfires, floods and food shortages for millions of people.
To prevent that, the IEA says these milestones must be hit:
· Immediate stop to new gas and oil projects.
· No new sales of fossil fuel boilers starting in 2025.
· Electric vehicles make up more than 60per cent of car sales by 2030.
· No sales of new internal combustion engine passenger cars by 2035.
· The global electricity sector reaches net-zero emissions by 2040.
· 70 per cent of electricity generation from solar and wind by 2050.
Energy firms feeling the heat
The BBC reports that big energy firms are coming under increasing pressure to adjust to a lower-carbon world.
On June 26, a small hedge fund investor succeeded in ousting two board members at Exxon in the United States, in a bid to alter the firm’s direction on climate change.
And a court in the Netherlands ordered Royal Dutch Shell to cut its emissions more quickly than the Anglo-Dutch oil firm had planned.
Total, the world’s fourth-largest privately-owned oil and gas producer, is aiming to reach carbon neutrality by 2050, in part by investing in more solar and wind power projects.
While several small investors opposed the company’s plans at the annual general meeting, arguing they did not go far enough, the resolution was passed with more than 90 per cent of the vote.
European energy firms have moved more quickly than their US counterparts to begin the transition away from fossil fuels, said Mike Coffin, senior analyst in oil and gas at financial think tank Carbon Tracker.
“Total we see in the upper tier, ranking alongside BP, but below Eni,” he said. “They don’t fulfil all our hallmarks of Paris [climate treaty] compliance, but above Shell and certainly above the North American companies.”
In February, announcing the planned rebranding, Pouyanné said the new name would symbolise Total’s “new commitment to be a leader in a world with more energies and fewer emissions”.
He said the company would have to go through “a genuine transformation” to meet its net zero target by 2050.
Climate targets
The IEA surprised the energy market earlier this month with a report suggesting fossil fuel production needed to slow down much more quickly than firms were planning for.
The IEA said there could be no new investment in fossil fuel projects after this year, if the world wanted to reach net zero carbon emissions by the middle of the century.
Carbon Tracker says global energy firms and state-owned producers have fossil fuel reserves on their books that will have to be left unexploited, if the world is to have any chance of meeting its carbon emissions targets.
Hedge funds, as well as large investors like Blackrock and pension funds, were beginning to recognise that failing to adjust plans in the light of climate targets represented a financial risk to companies they invest in, Coffin said.
“From an environmental perspective, we want these fossil fuels to stay in the ground – they’re unburnable carbon,” he said.
“From an investment perspective, you don’t want to sanction them because you’re wasting your capital. You won’t see the historic returns we’ve seen from oil and gas because of the slowdown in demand.”
