The Group's strategy incorporates the challenges of climate change and adopts the International Energy Agency’s (IEA) Sustainable Development Scenario (2°), which is compatible with limiting global warming to 2°C, as its reference framework. Total’s challenge is to increase access to affordable energy to satisfy the needs of a growing population, while providing concrete solutions to help limit the effects of climate change and supplying its clients with an energy mix featuring a progressively decreasing carbon intensity.
Total focuses its action around the following priority areas:
- developing natural gas as the primary energy source due to its lower carbon intensity among fossil energies;
- given the carbon budget allocated in a 2°C scenario, selecting and developing hydrocarbon projects based on their economic merit order, which incorporates their resistance to low price scenarios;
- developing the solar energy offer as the renewable energy of choice in the evolution of the energy mix, as well as the production of biofuels from biomass;
- improving the energy efficiency of the Group’s facilities, products and services, and maintaining efforts to reduce direct emissions of greenhouse gases (GHG);
- increasing access to more sustainable energy, for as many people as possible, particularly by means of innovative solar energy solutions;
- stimulating initiatives in the oil and gas sector and supporting the implementation of an international framework on climate.
The role of gaz
The percentage of natural gas in the Group’s production rose from approximately 35% in 2005 to nearly 48% in 2017, and, taking account of market developments in particular, this percentage is expected to increase over the coming years.
In 2016, the Group acquired the Belgian company Lampiris in line with the goal to expand over the entire gas value chain until the end customer. Within a few years, Lampiris became the third-largest1 supplier of natural gas, green power and energy services (e.g., insulation, boiler maintenance, wood and pellets for heating, smart thermostats, etc.) in the Belgian market and is starting to extend its business in France. In October 2017, Total also launched its new Total Spring natural gas and green electricity offer for private individuals in France. This offer aims to quickly win over three million customers.
In November 2017, the Group signed an agreement with Engie relating to the planned acquisition of its portfolio of upstream liquefied natural gas (LNG) assets. This portfolio includes stakes in liquefaction plants, and in particular an interest in the Cameron LNG project in the United States, long-term LNG sale and purchase agreements, a fleet of LNG tankers and access rights to regasification terminals in Europe. The acquisition of Engie’s upstream LNG business offered Total an opportunity to speed up its integrated gas chain strategy.
The Group believes in the essential role of natural gas as one of the solutions to climate change issues. Replacing coal with natural gas at power plants could help reduce worldwide CO2 emissions by 5 Bt/y, i.e., approximately 10% of world emissions2. Strengthening the position of gas in the energy mix must however be accompanied by a greater focus on control of methane emissions. To preserve the advantage that gas offers in terms of GHG emissions compared to coal for electricity generation, it is necessary to strictly reduce the methane emissions associated with the production and transportation of gas.
Total’s methane emissions specifically associated with gas production are less than 0.5% of the Group’s marketed operated gas production. Improving measurement of these emissions and their reduction is a priority for Total in terms of environmental impact.
On this basis, since 2014 the Group has been a member of the partnership between governments and industrial companies for the improvement of tools to measure and control methane emissions set up by the Climate and Clean Air Coalition and promoted by UN Environment and the non-profit organization Environmental Defense Fund. The Group also took several actions as part of the Oil & Gas Climate Initiative and signed the guiding principles on the reduction of methane emissions by the gas value chain3.
In its strategy for growth, Total prioritizes its projects by focusing on assets with moderate production and processing costs, while respecting the highest safety and environment standards.
Furthermore, the Group ensures sustainability of its projects and long-term strategy relative to climate change issues by the incorporation into financial evaluations of its investments submitted to the Executive Committee a long-term CO2 price of $30 to $40 per ton (depending on the crude price), or the current CO2 price if this is higher in a given country. This price is consistent with promoting gas over coal in power generation and encouraging investment in research on low-carbon technologies.
Moreover, with respect to coal, the Group ceased all production activity in 2015 and all marketing activity in 2016. In 2016, the Group withdrew from a project involving construction of a coal-based facility, coal-to-olefins, in China.
Developing renewable energies
For some 15 years, Total has been committed to developing renewable energies.
Solar power is the Group’s preferred area of development. These activities are owned by the Gas, Renewables & Power segment.
This segment is also present in energy storage through its Saft Groupe subsidiary, specialized in high-technology batteries, which are essential to the development of intermittent renewables.
In parallel, in November 2016, the Marketing & Services segment launched a five-year program to equip 5,000 service stations across the world with photovoltaic panels, including 800 in France. The project corresponds to an installed capacity of around 200 MW, equivalent to the electricity used by a city with a population of 200,000.
In addition to solar energy, biomass is Total’s second strategic development area in the field of renewable energies. In general, biomass represents approximately 10% of worldwide energy consumption and is mostly used for heating or cooking purposes. Biomass is the only directly substitutable renewable alternative to fossil resources for the provision of liquid fuel for transport (biodiesel, bioethanol, biokerosene), lubricants and base molecules for chemicals (solvents or polymers). These activities are owned by the Refining & Chemicals segment.
Energy efficiency and ecoperformance
In its scope of activities, Total has made reducing GHG emissions one of its priorities. Since 2010, the Group has reduced the GHG emissions produced by its operated activities by 30%. This reduction entails reducing associated gas flaring and improving energy efficiency.
Reducing routine flaring has been a long-standing goal of the Group, with a commitment made in 2000 to have no continuous flaring of associated gas incorporated into the design of its new projects. Furthermore, the Group has supported the World Bank in developing and launching the Zero Routine Flaring initiative involving oil & gas companies, producing countries and international institutions. The initiative aims to support elimination of routine flaring by 2030.
To ensure progression, an objective to decrease by 80% has been defined for 2020 compared to 2010, in other words, to achieve an average of 1.5 Mm3/d. This objective is reached in 2017.
Furthermore, as part of the Global Gas Flaring Reduction program, Total has worked alongside the World Bank for over 10 years to help producing countries and industrial players control routine flaring of associated gas.
One of the Group’s performance targets is to better control energy consumption. Since the beginning of 2013, a Group directive has defined the requirements to be met at operated sites using more than 50,000 tons of oil equivalent per year of primary energy (approximately 40 sites). At year-end 2017, 100% of the concerned sites reported compliance or had engaged the actions to meet compliance with this directive.
Energy efficiency is a key factor for improvement of economic, environmental and industrial performance. Since 2013 the Group has used a Group Energy Efficiency Index (GEEI) to assess its performance in this area. It consists of a combination of energy intensity ratios (ratio of net primary energy consumption to the level of activity) per business.
The Group’s objective for the 2010-2020 period is to improve the energy efficiency of its operated facilities by on average 1% per year. By design, the base value of the GEEI was defined as 100 in 2010 and the goal is to reach 90.4 in 2020.
The achievement of this objective in 2017 is mainly due to the significative decrease of the global gas flaring in 2017.
In addition to the mandatory audits conducted in Europe as per transposition of the European Energy Efficiency Directive 2012/27/EU, the Group is implementing energy management systems based on ISO 50001. The Leuna refinery and the bitumen plant in Brunsbüttel (Germany) have been certified for several years, and the French refining and petrochemicals plants have been ISO 50001 certified since 2017. The Zeeland refinery (the Netherlands), in which Total holds a 55% stake, was also certified in 2017. In the Marketing & Services segment, the industrial site in Brunsbüttel (Germany) and the lubricants blending plant in Dubai (United Arab Emirates) have been ISO 50001 certified for several years. The blending plant at Ertvelde (Belgium) was audited at the end of 2017 with a view to obtaining ISO 50001 certification. In France, the scope of Total Marketing France’s ISO 50001 certification covers 179 stations, 7 oil depots and 2 office buildings housing the management of the Nantes and Lyon regions.
In the coming years, the certification process will be deployed more broadly in Europe in a more global manner. In Exploration & Production, Total ABK (Abu Dhabi) also obtained this certification in early 2016.
Total uses the most appropriate architectures and equipment and introduces technological innovations. For example, on offshore production barges, offshore platforms and onshore facilities, heat recovery systems at gas turbine exhausts have been implemented thereby avoiding the need for furnaces or boiler systems.
Approximately 85% of GHG related to the use of oil and gas are emitted during the customer usage phase, compared to 15% during the production phase4. For this reason, in addition to the measures taken by Total at its industrial sites, the Group believes that improving the environmental footprint of its products is a key factor in the fight against climate change.
The Group offers its customers solutions (products and services) for responsible energy use. In terms of energy services, Total draws in particular on the know-how of its Tenag joint venture in Germany (49% owned) and BHC Energy in France acquired in 2014. These service companies work mainly for European customers, as well as in Africa and the Middle East. They use results obtained in-house to give industrial customers advice on improving their performance and energy efficiency. In 2017, the Group also acquired Greenflex, in a move to speed up the development of its offer on the energy efficiency market.
Through the “Total Ecosolutions” program, the Group is also developing innovative products and services that perform above market standards on the environmental front, in particular in terms of reducing energy use, GHG emissions and the impact on human health. At year-end 2017, 93 products and services bore the “Total Ecosolutions” label. They relate to a variety of sectors, including mobility, agriculture, buildings, packaging, infrastructure and industrial manufacturing. Some of the products result in reduced energy consumption, such as Total Excellium fuel, the Total Quartz Fuel Economy lubricant, and the Azalt® ECO2 and Styrelf® ECO2 bitumen ranges. Others, such as the new BioLife range of special fluids derived from raw materials from fully certified renewable sources, enable a significant reduction in environmental impact (compared to the fossil equivalent).
The CO2 eq emissions avoided throughout the life cycle by the use of “Total Ecosolutions” products and services, compared to the use of benchmark products on the market and for an equivalent level of service, are measured annually based on sales volumes. This represented 1.85 Mt CO2 eq in 2017.
In addition to its efforts on facilities and solutions offered to its customers, since 2012 the Group has provided support for its employees in France on improving the energy efficiency of their homes through advice and help with the necessary investment. Since this offer was launched, the Group has helped about 2,600 energy renovation operations.
In November 2017, Total signed an agreement with the Fondation GoodPlanet, chaired by Yann Arthus-Bertrand, for the implementation of a program to neutralize the carbon emissions from air travel by Group employees, over a 10-year period. This project will avoid 50,000 t of CO2 emissions into the atmosphere per year. It will entail the creation and operation of 8,400 biodigesters in India.
The development of carbon capture, utilization and storage technologies (CCUS) has been a long-standing Group commitment, in particular through its Lacq pilot project conducted from 2010 to 2013 (oxy-combustion capture and storage in a depleted reservoir). The Group systematically studies opportunities to re-inject the CO2 contained in the deposits it exploits and is looking at use of CO2 to improve hydrocarbon recovery. Building on these experiences, Total believes it is important to continue its R&D efforts in various fields including maturity of capture technologies, availability and location of storage capacities, CO2 usage, technical feasibility on the scale needed and reducing costs of technologies. With this goal in mind, Total intends to devote up to 10% of its R&D investments to CCUS and has initiated work alongside its peers, within the Oil & Gas Climate Initiative, on the issues of marketability, capture technologies and world storage capacities.
In October 2017, Statoil, Shell and Total entered a partnership agreement to develop a CO2 storage project on the Norwegian continental plate. The project is one of the initiatives taken by the Norwegian authorities to develop Carbon Capture and Storage in Norway on an industrial scale.
Since 2010, almost 50 Group subsidiaries have been part of the “Total Access to Energy” program, a source of initiatives for identifying and testing solutions that facilitate access to energy for the poorest populations.
The World Bank estimate for the number of people without access to electricity has exceeded 1 billion. In 2011, as part of its access to energy program, Total launched a commercial offer of decentralized energy solutions for the populations of emerging countries, mainly in Africa.
First launched in four pilot countries in 2011, Total’s solar solutions for access to energy were distributed in 45 countries by 2017. By the end of 2017, 2.3 million lamps and solar kits had been sold, improving the day-to-day lives of nearly 10 million people. The distribution channels used are both Total’s traditional networks (service stations) and “last mile” networks built with local partners to bring these solutions to isolated areas. Reseller networks are then set up and economic programs developed with the support of external partners to recruit and train young solar resellers.
The model is based on innovative partnerships with various stakeholders: in 2017, approximately 50 business partnerships were launched with such varied stakeholders as NGOs, development agencies, professional customers (retailers, Total key account customers, etc.), telecommunications operators or international organizations.
The Group’s goal is to further develop this program and reach out to 25 million people in Africa by 2020 on a continent that is at the core of Total’s global strategy.
Sector inItiatives and international framework
In 2014, Total decided to join the call of the UN Global Compact, which encourages companies to consider a CO2 price internally and publicly support the importance of such a price via regulation mechanisms suited to the local context. Total is also working with the World Bank as part of the Carbon Pricing Leadership Coalition (CPLC). In particular, Total advocates the emergence of a balanced, progressive international agreement that prevents the distortion of competition between industries or regions of the world. Drawing attention to future constraints on GHG emissions is crucial to changing the energy mix. Total therefore encourages the setting of a worldwide price for each ton of carbon emitted, while ensuring fair treatment of “sectors exposed to carbon leakage” (as defined by the EU). To this end, six oil & gas industry leaders, including the Group’s Chairman and Chief Executive Officer, called for the setting up of carbon pricing mechanisms at the UN Framework Convention on Climate Change in June 2015. In June 2017, Total also became a founder member of the Climate Leadership Council, an initiative launched mainly by businesses, but also by personalities, to demonstrate the importance of finding solutions to the climate challenge that will support the economy and protect the environment.
Substituting coal with gas in the electricity-generating sector is one fastest and cheapest way of reducing worldwide CO2 emissions. This solution is immediately available and offers the necessary flexibility to electric networks, supplementing intermittent energies. As a result, Total supports standards that impose emission ceilings on electricity generation, such as those in force in the United Kingdom.
In 2014, Total was actively involved in launching and developing the Oil & Gas Climate Initiative (OGCI), a global industry partnership. At year-end 2017, this initiative involved 10 major international energy players. Its purpose is to share experiences, advance technological solutions and catalyze meaningful action in order to assist the evolution of the energy mix in a manner that takes into account climate change issues. In 2016, the OGCI announced the creation of a one-billion-dollar investment fund over 10 years. This OGCI Climate Investments fund will finance startups and projects demonstrating high potential in terms of reducing greenhouse gas emissions. In October 2017, OGCI Climate Investments announced its first investments in CCUS and energy efficiency in transport. The OGCI also announced its ambition to aim for almost zero methane emissions.
Total is the technical partner of the Breakthrough Energy Coalition (a $1 billion fund), and in this capacity should help identify investment priorities and evaluate viable technologies.
Total also actively participates in the debate on climate issues, thanks to its partnerships with key stakeholders. For example, Total funds research programs in France conducted by the ADEME, Paris-Saclay and the Climate Economics Chair at Paris-Dauphine University, as well as the Massachusetts Institute of Technology (MIT) in the United States. Lastly, Total offers training and makes presentations at several universities, thereby taking part in the debate.
Adapting to climate change
The Group ensures that it assesses the vulnerability of its facilities to climate hazards so that the consequences do not affect the integrity of the facilities, or the safety of people. More generally, natural hazards (climate-related risks as well as seismic, tsunami, soil strength and other risks) are taken into account in the conception of industrial facilities, which are designed to withstand both normal and extreme conditions. The Group carries out a systematic assessment of the possible repercussions of climate change on its future projects. These analyses include a review by type of risk (e.g., sea level, storms, temperature, permafrost) and take into account the lifespan of the projects and their capacity to gradually adapt. These internal studies have not identified any facilities that cannot withstand the consequences of climate change known today.
3Signatory companies: BP, Statoil, Eni, Shell, ExxonMobil, Total, Repsol, Wintershall.
4Source: IPCC and IEA.
TCFD (TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES)
In June 2017, the TCFD (Task Force on Climate-related Financial Disclosures) of the G20’s Financial Stability Board published its final recommendations on information pertaining to climate to be released by companies. These recommendations include additional details for certain sectors, such as energy.
After analyzing the final report, Total publicly announced its support for the TCFD and its recommendations during the summer of 2017, while noting that it is up to companies to define the information about climate-related risks and opportunities that is material, which should, consequently, be disclosed in financial fillings, and the additional information that they choose to report on a voluntary basis. Total also believes that the quantification of impacts of different scenarios may not be relevant to investors as assumptions made by different companies may strongly diverge. The Group considers that companies have a major role to play in shaping how these issues evolve and that the modalities of the application of scenarios and the use of metrics should be further studied.
Total is continuing to dialogue as part of the Oil & Gas Preparer Forum set up by the TCFD in the autumn of 2017 with a view to publishing best applicable practices, in particular for the oil and gas sector. Total also joined the initiative launched by the WBCSD in December 2017 by signing the “CEO Guide to Climate-related Financial Disclosures”.
Below, Total gives details of how the Group implements the TCFD’s recommendations, according to the four pillars, and how it intends to launch an initiative for continual improvement in this field.