As the annual U.N. Climate Conference gets underway this week in Madrid, Spanish oil giant Repsol announced it will eliminate all greenhouse gas emissions from its own operations and most of its products by 2050.
Calling the strategy an industry first, Repsol said in a statement released on Dec. 2 that it wanted to “lead the energy transition in line with the objectives of the Paris Agreement.”
The Paris Agreement targets aim to limit planetary warming to less than 2 degrees Celsius compared with preindustrial levels.
Acknowledging the declining value of oil and gas assets in a post-carbon emissions world, the company said aligning its business model with the climate goals will result in a €4.8 billion ($5.3 billion) accounting charge.
The new model, according to the statement, will prioritize value over production growth.
“We are convinced that we must set more ambitious objectives to fight climate change,” Chief Executive Officer Josu Jon Imaz said. “We believe now it is the right time for Repsol. We do it with the utmost confidence.”
Oil and gas companies have come under increasing pressure to reduce carbon emissions, with recent announcements setting a new bar for slashing greenhouse gas pollution generated by fossil fuels.
Prior to the Dec. 2 announcement, Repsol had already pledged to reduce carbon dioxide emissions by 2.1 million metric tons by 2020 from 2016 levels. The new strategy doubles down on the transition to clean energy.
Repsol’s board of directors approved new investments in two solar projects and one wind project with a combined capacity of 1,600 megawatts, boosting the company’s total renewables portfolio by 40%.
These facilities will help the company meet a goal of reducing a measure called the carbon intensity indicator by 10% in 2025, based on a 2016 baseline.
The reduction will increase to 20% by 2030, 40% by 2040 and net-zero carbon dioxide emissions by 2050, according to the statement.
Further demonstrating its commitment to the zero emissions target, Repsol will link at least 40% of the long-term variable pay of its managers and leaders, including the CEO and senior executives, to objectives that lead the company to comply with the Paris Agreement.
During this week’s Madrid climate conference, delegates from nearly 200 countries are expected to hash out details of the 2015 Paris accord, including carbon-trading systems and compensation for poor countries with rising sea levels.
The Trump administration, which has initiated the process to withdraw the United States from the Paris Agreement, will not be in attendance. Instead, Speaker of the House Nancy Pelosi is bringing a 15-member congressional delegation.