How the energy industry is enabling hard-to-abate sectors to accelerate decarbonisation

With a history of bringing to market cutting edge technology, delivering some of the most challenging engineering projects and managing complex supply chains, the oil and gas sector has all the pre-requisites to support a just energy transition which also delivers sustainable global growth.

Enabling other sectors to decarbonise

Oil and gas companies are leading the development of key energy transition technologies such as CCUS – where of the 15 large scale projects in operation, 11 are oil and gas based – and hydrogen, which can be most efficiently produced from gas and also make use of existing gas pipelines and infrastructure.

Importantly, CCUS and hydrogen are not only helping oil and gas companies to decarbonise, but are also vital for lowering the emissions of ‘hard-to-abate’ (HTA) sectors such as aviation, long-haul transport, shipping, cement, plastics and steel, which cannot be done through electrification alone, and are key drivers of the global economy. As well as leading on the development of these technologies, oil and gas companies are also supporting companies in these HTA sectors to use them in their operations and projects.

Enhancing energy efficiency

While technologies such as CCUS and hydrogen get the most headlines, an often overlooked – and key – energy transition lever is energy efficiency. Analysis from the IEA demonstrates that up to 40% of the emissions abatement required by the Paris Agreement could be delivered by energy efficiency. And energy efficiency not only reduces emissions, it can also drive down operational costs. Our energy efficiency compendium shares technologies and practices which can be used by upstream and downstream oil and gas companies, giving advice on implementation and the business case for adopting the suggested measures.

Supporting the sustainable up scale of renewables

Over the last few decades oil and gas companies have been increasingly using, investing in and producing energy through technologies such as wind and solar.

While the upscaling of renewables is necessary if we are to meet the goals of the Paris Agreement, it needs to take into account environmental and social risks associated with their development and use. The oil and gas industry has vast experience in developing large energy projects that are environmentally and socially responsible that it can share with the renewables sector. You can find examples of good practice developed by Ipieca members which can be used by renewables companies.

As renewables have ramped up, so has the demand for minerals such as copper, lithium and zinc needed by these projects. The oil and gas sector is well placed to support the development of the supply chains of these minerals in a way that respects human rights, supports local communities and protects the surrounding environment – something Ipieca covered in a recent webinar series.

The UN Sustainable Development Goals

The world’s plan of action for overcoming poverty while protecting the planet and ensuring all people enjoy peace and prosperity, the Sustainable Development Goals (SDGs) provide a framework to support economic growth accompanied by social fairness and environmental sustainability. The Ipieca-UN Development Programme-International Finance Corporation SDG Atlas demonstrated that oil and gas companies can contribute to every one of the 17 SDGs, while the Ipieca-WBCSD SDG Roadmap provides suggested actions to contribute to the SDGs, with the hope that by developing shared sector pathways, we can accelerate SDG action.

Collaborative transformation

Multiple science-based pathways to net zero show that those that also achieve the ambitions of the SDGs require all energy sources, including oil and gas, for the foreseeable future.

Collective action involving all parties and solutions will be essential to developing the new value chains and products necessary to deliver the aims of the Paris Agreement while also ensuring sustainable social and economic development of communities and countries around the world.

As we move towards a net-zero future, Ipieca will continue to work with its members to raise awareness of technologies and good practices that can support the industry continue to provide the energy the world needs, while contributing to a transition that delivers for people and the planet.