A broad energy company setting itself on the path to carbon neutrality.
With more than 100,000 employees and operations in over 130 countries, Total is one of the world’s “supermajor” energy companies. Founded in 1924 by the French government, the group’s current form owes much to its mergers in 1999-2000 with two other European oil majors at that time: France’s Elf Aquitaine and Belgium’s Petrofina. Today, Total is a broad energy company that produces and markets fuels, natural gas and low-carbon electricity.
Total says that its ambition is “to become the responsible energy major” – and on May 5 this year, the company made a significant step toward turning that motto into a reality. Just as the global energy industry was reeling from the double shock of the coronavirus crisis and an escalating price war, Total Chairman Patrick Pouyanné announced the company’s new climate ambition to get to net-zero emissions, together with society, by 2050.
Total aims to be as clear as possible about the nature of its commitment. It breaks the pledge down into three steps. First, it wants to achieve net-zero emissions across its worldwide operations by 2050 or sooner. In technical terms, that means eliminating or offsetting the organization’s entire scope 1 and scope 2 emissions by the middle of the century. Second, it wants to tackle the emissions produced by customers when they consume the energy products it sells. Its target for these scope 3 emissions is to reach net-zero by the same date for products sold in Europe, in line with the EU net-zero emissions targets. Total also announced it will make similar carbon neutrality commitments in all countries or regions willing to set similar targets at governmental levels. Finally, it’s aiming for a 60% reduction in the overall carbon intensity of its global product portfolio by 2050, capping emissions at 27.5 grams of carbon per megajoule of energy produced.
A head start
Net-zero emissions commitments from big companies with an oil and gas portfolio are still a rarity, but Total’s announcement didn’t come out of the blue. It has a track record in low-carbon activity, including a significant focus on gas and a sizeable renewable energy business.
In 2016, Total cemented its ambitions to be a major player in the energy transition by establishing Gas, Renewables and Power (GRP) as a separate entity within its organization. As Senior Vice President of the Renewables division, Julien Pouget oversees one of the key segments of that branch.
“Total’s low-carbon businesses,” says Pouget, “support the company’s emissions reduction ambitions in two ways. One part of the business is helping to reduce the carbon footprint of our own sites and those of our partners. We do that with a wide range of solutions, including on-site renewable electricity generation, natural carbon sinks, biogas, and tomorrow, hydrogen, as well as research into carbon capture and storage and other innovative technologies.”
The second part of the strategy involves the development of zero-carbon electricity for sale to customers. “Since the creation of the GRP branch, Total has made a significant step change in its renewable energy production. Our capacities have grown exponentially in the last four or five years,” says Pouget. Back in 2016, he notes, Total’s renewables portfolio had a total capacity of about 300 megawatts. By the end of 2019 it was 10 times larger, with 3 gigawatts of gross capacity of renewable power generation. This year, the creation of a 50/50 joint venture with India’s Adani Green Energy Limited (AGEL), part of the Adani Group, added another 2 gigawatts of solar generation capacity, and the company currently has more than 3 gigawatts of projects under construction. By 2025, Total aims to have 35 gigawatts of gross renewable capacity.
The company is interested in all types of renewable energy and has developed strong positions in solar and wind power. Total runs large-scale solar power plants all over the world, and supplies rooftop-distributed power systems to businesses and homeowners. It also has a significant footprint in the wind power segment, inducing most recent investments in the offshore wind and floating offshore wind developments.
Is it odd that a company with extensive experience in offshore oil and gas production should hold back from offshore wind for so long, given the similarities between the technical and operational challenges of the two sectors? Pouget offers a counterargument. “I think maybe that it was because we have so much offshore experience that we were cautious about offshore wind,” he says. “We know exactly how difficult it is and we wanted to be sure that technology was mature, proven, and could generate electricity at an affordable price.
“Today, renewables are more and more competitive compared to other sources of electricity. We want to invest where it’s profitable to do so, and the falling cost of renewable technologies means there are lots of viable projects.” In the company’s rooftop solar business, for example, it often installs panels on customer premises at its own cost, then sells the resulting clean power to those customers at a lower price than they pay their regular utility. For large projects, meanwhile, investment decisions are less and less dependent on government subsidies. “Despite renewables getting progressively to ‘grid parity’ or even better, it remains important for these projects to secure a stable long-term price for the power generated.” To achieve the ambition to be a major renewable energy player, “We need to be technology-agnostic,” says Pouget. “Wind and solar power are complementary; they usually produce at different times. Our future power systems will depend on a mix of different intermittent sources, together with battery storage.”
Total has already made a move into the battery storage market with the 2016 purchase of Saft, a French industrial battery maker. Saft batteries are found in a host of applications, from satellites, aircrafts and high-speed trains to backup power systems for industrial sites. The company also supplies very large battery storage systems used to improve the performance and stability of electricity networks. Such assets are becoming another element of Total’s renewables portfolio. In Mardyck, close to Dunkirk, for example, it’s currently building the largest battery storage system in France. When the new facility opens this year, it will be capable of supplying 25 megawatts of electricity to the grid.
Cleaning up at the pump
Growing its renewables business will help Total reduce the overall carbon intensity of its activities, but the company will not achieve its net-zero ambitions unless its customers make radical changes to their energy consumption habits. Philippe Montantême, Senior Vice President, Strategy Marketing Research in the company’s Marketing & Services segment, has a role that puts him at the frontline of that shift.
At Total, Marketing & Services encompasses all the organization’s end customer-facing activities, including around 15,600 filling stations worldwide and sales entities supplying gas and heating oils to homes and businesses. “Marketing & Services activities account for a significant part of the company’s revenues, but also of its carbon emissions. So we have an important part to play in this transition,” says Montantême. He adds that the division has already made significant steps along the road to emissions reduction, including developing fuels and lubricants that improve the energy efficiency of vehicles or the massive deployment of solar panels on the rooftops of its service stations and industrial sites around the world.
Total is now positioning itself as a retailer of low and zero-carbon energy sources, too. It is, for example, a major player in the supply of gaseous transport fuels in Europe and the U.S. Montantême points out that 30% to 50% of the gas it sells for transport applications is biogas, produced from renewable sources. The company has also moved into electric vehicle (EV) charging. In 2018, it acquired the largest French EV charging operator, now Total EV Charge, and plans to grow its network to 150,000 charging points in Europe by 2025.
“All these changes are about laying the right foundations for a zero-net-carbon future,” says Montantême, but the speed of the transition will ultimately be determined by the customers’ choices. “We can only move as fast as the market,” he says. “We want to be ready to react but we have to move in step with society.”
Right now, both society and the energy industry are contending with other challenges. Could the coronavirus crisis derail Total’s net-zero plans? “Definitely not,” says Montantême. “In our business, we must plan for the short, medium and long term. Today, we have what we hope will be a short-term health crisis, and we may have to deal with a medium-term outlook of low energy prices and a difficult economy. But, in the long term, society still has to address the challenge of climate change and we are determined to play our part.” — Jonathan Ward
Published: October 2020
Images: Michel Labelle/Total; Total; Caslot Jean-Charles/Total