Snam Scales up Spending, Makes Net Zero Pledge (Update)
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Italy's Snam plans to invest €7.4bn ($8.8bn) in its operations between 2020 and 2024, up from a €6.5bn spending plan in 2019-2023, it announced on November 25. The gas pipeline operator – Europe's biggest – also pledged to become carbon neutral by 2040, although the target does not cover Scope 3 emissions.
Snam will devote €720mn to its energy transition business by 2024, it said, which is almost double the amount allocated in its previous five-year plan. Some €220mn will go towards developing at least 64 MW of biomethane infrastructure, €200mn towards energy efficiency and €150mn towards projects to convert trains to run on hydrogen and install hydrogen fuel cells in the Snam network.
A further €150mn will be spent in the mobility sector, on expanding distribution infrastructure in order to increase the use of LNG and hydrogen as fuels.
"The 2020-2024 plan opens a new phase in the history of Snam, which in the climate challenge is ideally positioned to play an important role in the energy transition, with a long-term vision consistent with its purpose and European objectives," Snam CEO Marco Alvera said in a statement. "Snam will be one of the first energy companies to reach carbon neutrality in 2040 and provide a wide contribution to the decarbonisation of the system through the development of green gases and, in particular, hydrogen."
Snam is targeting a 50% reduction in Scope 1 and 2 CO2 emissions by 2030, versus the level in 2018. Its previous goal was a 40% reduction compared with the level in 2016. Over half of the cut will be achieved through developing turbines that run partly on hydrogen to power its grid compressor stations. Reductions in methane emissions will account for much of the remainder, Snam said.
Snam said it was also strengthening collaboration with subsidiaries and had begun joint projects with suppliers to reduce its Scope 3 emissions, which it does not have direct control over. Other companies in the oil and gas industry have gone further, such as Norway's Equinor and Spain's Repsol, by including Scope 3 emissions in their net-zero targets.
Electric compressors the way ahead: CEO
CEO Marco Alvero said in a video clip on LinkedIn that among the practical measures Snam would take to reduce emissions was investment in electric turbines instead of compressed natural gas to run its turbines. He said this would also help with market coupling.
Investment in reducing gas leakages would also proceed, he said. And Snam will continue investing in new businesses including mobility and efficiency. Also he said sustainable finance principles would further the development of clean gases, notably biomethane and hydrogen, which will be one of the pillars of decarbonisation.
He said there were some 13 projects that made up its environmental, social and governance objectives, and that ESG itself took about 40% of the board's time.