CLIMATE CHANGE- RELATED CHALLENGES
Total’s ambition is to become the responsible energy major. The Group is committed to contributing to the United Nations Sustainable Development Goals, particularly with regards to those subjects that are connected to climate change and the development of more affordable, more available and cleaner energy for as many people as possible.
- reduce the greenhouse gas emissions (GHG) of its operated oil & gas activities including methane emissions;
- implement a strategy allowing to reduce the carbon intensity of the energy products used by its customers;
- identify and support technologies and initiatives that helps respond to the challenges of climate change.
In order to make an effective contribution to the climate change issue, Total relies on an organization and structured governance. The Group has defined four strategic focuses that integrate the climate change-related challenges.
In support of the Group’s governance bodies, the Strategy and Climate division shapes the Group’s approach to climate change while working with the strategic and operational divisions of the Group’s business segments. By monitoring indicators, progress can be measured and the Group’s actions can be adjusted.
Oversight by the Board of Directors
Total’s Board of Directors ensures that climate-related issues are incorporated into the Group’s strategy and examines climate change risks and opportunities during the annual strategic outlook review of the Group’s business segments. The Board of Directors examines the Group’s GHG emissions reduction targets and reviews its performance on an annual basis.
To carry out its work, the Board of Directors relies on its Strategic & CSR Committee, whose rules of procedure were changed in September 2017 then in July 2018 in order to broaden its missions in the realm of CSR and in questions relating to the inclusion of climate-related issues in the Group’s strategy.
Aware of the importance of climate change challenges, in 2019, the Board of Directors decided to change the criteria for the determination of the variable portion of the Chairman and Chief Executive Officer’s compensation for the year 2019. Among others, by applying a quantifiable criterion related to the evolution of GHG emissions (Scopes 1 & 2) on operated oil & gas facilities (refer to the Universal Registration Document, Chapter 4, section 4.3.2 for details). This criterion completes those introduced in 2016 to take better account of the achievements of Corporate Social Responsibility (CSR) and the Group’s HSE targets. CSR performance is assessed by considering the extent to which climate issues are included in the Group’s strategy, the Group’s reputation in the domain of Corporate Social Responsibility as well as the policy concerning all aspects of diversity.
Role of management
Total’s Chairman and Chief Executive Officer, in compliance with the long-term strategic direction set by the Board of Directors, implements the strategy of the Group while making sure climate change challenges are taken into account. In particular, he relies on the President, Group Strategy-Innovation, who is a member of the Executive Committee, to whom the Senior Vice President Strategy & Climate, and the Senior Vice President Climate report. The Senior Vice President Climate chairs the Climate-Energy steering Committee, which mainly includes representatives of Strategy and HSE management from the various business segments. The mission of this Committee consists of structuring the Group’s approach to the climate, and in particular to:
- propose GHG emission reduction targets for the Group’s operated oil & gas facilities;
- propose a strategy to reduce the carbon intensity of the energy products used by the Group’s customers;
- monitor the existing or emerging CO2 markets; and
- drive new-technology initiatives, in particular with industrial partners, to reduce CO2 emissions (energy efficiency, CO2 capture and storage, for example).
Identification of climate-related risks and opportunities
The risks and opportunities related to climate change are analyzed according to different timescales: short term (two years), medium term (until 2030) and long term (beyond 2030).
The identification and the impact of climate-related risks form an integral part of Total’s global risk management processes. In particular, they cover the risks related to transition due, for example, to regulatory changes, such as the introduction of carbon taxes, and the physical risks due to the effects of climate change. The impact of these risks is analyzed for the Group’s assets and for investment projects (refer to point 3.1.2 of chapter 3 – Universal Registration Document 2019).
Climate change also provides Total with opportunities. In the coming decades, demand for electricity will grow faster than the global demand for energy, and the contribution of renewables and gas to the production of electricity shall therefore play an essential role in the fight against climate change. Electricity alone will not be sufficient to meet all needs, particularly those connected to transport. Gas and sustainable biofuels will be attractive and credible alternatives to conventional fuels and the Group intends to develop them.
Helping customers improve their energy efficiency also offers opportunities and forms part of a trend that will be accelerated by digital technology. Total intends to innovate in order to provide them with new product and service offers that will support their energy options and their usages. The promotion of hybrid solutions combining hydrocarbons and renewable energies is part of this approach. Similarly, services can be offered to optimize energy for industrial sites. The Group aims to develop this approach for industrial and mobility applications.
In addition, ecosystems, and forests in particular, store carbon naturally. Consequently, their conservation and the restoration of their role as carbon sinks are crucially important in the fight against global warming. Therefore, Total wants to develop its activities related to natural carbon sinks.
Finally, certain sectors, particularly the cement industry and the steel sector, could struggle to reduce their GHG emissions. They will therefore require carbon capture, utilization and storage technology (CCUS). Consequently, the Group intends to step up the development of CCUS.
Impact of climate-related risks and opportunities
Climate change is at the heart of the Company’s strategic vision. Total positions itself on high-growth low-carbon markets and intends to offer customers an energy mix with a carbon intensity that shall gradually decrease. To accompany these changes, Total has introduced a carbon intensity indicator for the energy products used by its customers. This indicator is described below (Targets and metrics to measure climate-related risks and opportunities).
Total’s approach is based on four strategic focuses.
1) Growing in gas value chains (natural gas, biogas and hydrogen)
To respond responsibly to the strong rise in demand for electricity, Total is continuing its development in the gas sector, whose CO2 emissions are half those of coal when used to generate electricity(1). Gas is also a supplement that is essential to cope with the intermittent supply of renewables and seasonal fluctuations in demand. The growth of natural gas will see a constantly increasing proportion of greener gas, in the existing infrastructure network such as biogas and hydrogen, to reduce greenhouse gas emissions.
The Group has continued its efforts to grow along the entire gas chain, from production to the end customer. Upstream, Total has finalized various acquisitions, including that of the Engie and Anadarko LNG assets in Mozambique, and has launched some major LNG projects, such as Ichthys in Australia and Cameron in the United States. In addition, the Group has proceeded with or benefited from the launch of major developments, like the Arctic LNG 2 project (refer to point 2.3 of chapter 2 – Universal Registration Document 2019). Total is the world’s second-ranking(2) operator on this market, with a volume sold of more than 34 Mt in 2019.
In distribution, Total has committed itself to gas fuel for transport by acquiring a 25% stake in 2018 in Clean Energy Fuels Corp.(3), one of the leading distributors of gas fuel for HGVs in the United States, or by signing a contract with CMA-CGM, the first shipping company to equip its transcontinental container ships with LNG-powered engines. In 2018, the Group also entered a partnership with the Adani group, India’s largest private conglomerate in energy and gas infrastructures, in order to contribute to the development of the natural gas market. This partnership, which was extended in 2019, illustrates the Group’s will to support countries that produce the greatest part of their electricity from coal to diversify their energy mix.
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. In 2019, methane emissions from facilities operated by the Group for its Upstream hydrocarbons activities were around 0.20% of the commercial gas produced(4). The Group’s target is to reduce this intensity below 0.20%.
The Group has been a member since 2014 of the Oil & Gas Methane 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 on the gas value chain(5).
(1)Source: International Reference Centre for the Life Cycle of Products, Processes and Services; Life cycle assessment of greenhouse gas emissions associated with natural gas and coal in different geographical contexts, October 2016, , and “Review of Life Cycle Analysis of gas and coal supply and power generation from GHG and Air Quality Perspective” Imperial College London, 2017.
(3)A company listed on the NASDAQ, 24.84% interest on December 31, 2019.
(4)Refer to the OGCI methodology for methane intensity calculation.
(5)“Guiding Principles on Reducing Methane Emissions across the Natural Gas Value Chain”.
2) Developing a profitable low-carbon electricity business
Total is developing on the non-regulated portion of the low-carbon electricity value chain (i.e., excluding the power transportation), from power generation – from renewables or natural gas – to storage (batteries, hydrogen) and sale to end customers. As demand for electricity is expected to grow strongly in the coming decades, Total plans to invest $1.5 to $2.0 billion per year. In 2018, the Group made strategic acquisitions, including Direct Énergie and its subsidiary Quadran, respectively renamed Total Direct Énergie and Total Quadran, thereby stepping up its presence in renewable energies (wind, solar, hydropower and biogas).
In 2018, Total acquired four combined-cycle natural gas power plants in France with a global capacity of 1.6 GW. Refer to point 2.3 of chapter 2 - Universal Registration Document 2019 for further information on these acquisitions.
Total aims at holding an installed gross production capacity of renewable electricity in excess of 25 GW by 2025, of which 10 GW in Europe. In 2019, this gross installed capacity was about 3 GW.
In distribution, following the acquisition in 2018 of the French specialist in smart recharging solution, G2Mobility renamed Total EV Charge, the Group has diversified its activities dedicated to electric mobility. Total aims to operate 150,000 charging points on private or public parking lots in Europe by 2025. Total has also launched a range of fluids for electric and hybrid vehicles.
As an electricity supplier, the Group aims to supply electricity to nearly eight million customers by 2025.
3) Avoid expensive oil, reducing emissions at our facilities and promoting sustainable biofuels
The Group foresees a long-term stagnation, or even a decline, in the demand for oil and is, therefore, concentrating on low break-even assets.
Additionally, Total is taking steps to reduce CO2 emissions from its operated facilities and a dedicated task force bringing together different skills in the Group was set up in 2019. The Group has set itself a target of cutting GHG emissions from its operated oil & gas facilities from 46 Mt of CO2e to less than 40Mt of CO2e between 2015 and 2025.
Improving the energy efficiency of the facilities is an essential part of this effort. The Group aims to improve its energy efficiency by an average of 1% per year over the 2010-2020 period, at a time when exploration is becoming increasingly complex. This indicator is described below (Targets and metrics to measure climate-related risks and opportunities). Total also uses appropriate architectures and equipment and introduces technological innovations. For example, on offshore production barges, offshore platforms and onshore facilities, heat recovery systems on gas turbine exhausts have been implemented, thereby avoiding the need for furnaces or boiler systems.
Finally, the incorporation of biofuels can help reduce CO2 emissions from road and air transport. According to European standards, they reduce CO2 equivalent emissions by at least 50% through their complete life cycle, in comparison with the equivalent fossil fuels. As a pioneer in biofuels for more than 20 years, Total is now one of Europe’s major actors, with 2.5 Mt blended sustainable biofuels(6) in 2019. On a worldwide scale, the Group contributed to the incorporation of 3.6 Mt of sustainable biofuels. In addition, Total produced 0.24 Mt of sustainable biofuels in its refineries in 2019. With the start of production at the La Mède biorefinery in 2019, with a capacity of 0.5 Mt per year of hydrotreated vegetable oil (HVO), the Group cornered a market share of over 10% in Europe in HVO production. The oils processed at La Mède are certified sustainable(7) according to the criteria of the European Union. Total has also set up a specific organization to complete this certification by selecting a limited number of responsible partners, plus an obligation to join the RSPO (Round table on Sustainable Palm Oil(8)), the signing by these suppliers of the Group’s Fundamental Principles of Purchasing (refer to the « Supply chain » section) and specific, more stringent controls of sustainability and the respect of human rights.
For more than 10 years, Total’s R&D teams have developed technologies that have broadened the range of usable resources, while also meeting the need for sustainability. The consortium BioTFuel is working on, for example, the development of lignocellulose (plant waste).
(6)Physical volume of biofuels in equivalent ethanol and esters according to the rules defined by the European RED Directive, excluding volumes sold to third parties via trading.
(7)The sustainability of the oils processed at the La Mède biorefinery is guaranteed by an ISCC (International Sustainability & Carbon Certification) type certificate of sustainability recognized by the European Union.
4) Developing businesses that contribute to carbon neutrality
The preservation and restoration of natural carbon sinks (forests, wetlands, etc.) and carbon capture (CCUS) will be key to achieving carbon neutrality in the second part of the 21st century.
Total has launched a new activity based, on preserving and restoring the capacity of ecosystems to act as carbon sinks. This activity is owned by a business unit created in 2019 that is dedicated to investments in natural carbon sinks, composed of experts in the environment and agronomy, with an investment budget $100 million per year from 2020 onwards, and the goal of creating 5 MtCO2 of sustainable storage capacity per year by 2030. In addition, actions of preservation and restoration of the forest are currently conducted by the Fondation d’entreprise Total as part of the Total Foundation program (refer to the “Fostering the economic development of the regions” section).
Finally, CCUS will be essential for several industries, especially those that emit massive amounts of CO2 due to the nature of their business (cement, steel, etc.). Total allocates significant resources to this area by dedicating up to 10% of the Group’s R&D budget to it. Several projects represented significant progress, including Northern Lights (Norway), a project in which the Group participates alongside Equinor and Shell. Total is also a partner of the Net Zero Teesside project (UK), together with the OGCI’s investment fund and a few companies of the sector(9).
Total also stepped up its R&D program in 2019 by entering partnerships with the National Carbon Capture Center in the United States and IFPEN in France. The Group has also launched a development study for a major pilot industrial scale project in Dunkirk, a project to produce methanol from CO2 and hydrogen in Germany, with the start-up Sunfire, and a feasibility study of an industrial system to capture and reuse the CO2 produced by the LafargeHolcim cement works in the United States(10).
Total also offers customers an energy efficiency consultancy service so that they can optimize their own energy consumption and reduce their GHG emissions. The acquisition of GreenFlex forms part of this initiative. By providing consultancy (strategic and operational), data intelligence (digital platforms) and financing services, GreenFlex helps companies and regions improve their energy and environmental performance. The Company’s areas of expertise are varied and include, for example, the improvement and management of the energy performance of buildings, equipment, utilities and processes, sustainable mobility, flexible electricity consumption, renewables and positive-energy buildings. More than 700 companies have already been supported by GreenFlex since 2009.
(9)BP, ENI, Equinor, Occidental Petroleum and Shell.
(10)Svante Inc., LafargeHolcim, Oxy Low Carbon Ventures LLC and Total.
Sector initiatives and international framework
Total is committed to various sector initiatives on the main challenges raised by climate change. Indeed, tackling climate change requires cooperation between all actors, from both public and private sectors.
Thus, Total joined, in 2014, 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. 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). In addition, Total is working with the World Bank as part of the Carbon Pricing Leadership Coalition (CPLC). In June 2017, Total became a founding member of the Climate Leadership Council, an initiative that calls for the introduction of a “carbon dividend”, with a redistribution mechanism that pays a dividend to the entire population.
In 2014, Total was actively involved in launching and developing the Oil & Gas Climate Initiative (OGCI), a global industry partnership. At year-end 2019, this initiative involved 13 major international energy players. Its purpose is to develop solutions for a sustainable low emissions future. Launched in 2017, the OGCI Climate Investments fund, which has access to over $1 billion over 10 years, invests in technology that significantly cuts emissions. Examples of investments include a large-scale industrial CO2 capture and storage project (Net Zero Teesside Project), methane emission monitoring services by satellite (GHGSat), by aircraft (Kairos Aerospace) or by drone (SeekOps Inc.) and a technology that incorporates CO2 as a raw material in the production of polyols used in polyurethanes, which are plastics that have multiple uses (Econic Technologies).
The Group also plays a role in various international initiatives that involve the private and the public sectors to bring about (non-exhaustive list):
- carbon pricing within Caring for Climate – United Nations Global Compact, and the Paying for Carbon call;
- the end of routine flaring of gas associated to oil production within the World Bank’s Zero Routine Flaring by 2030 initiative;
- greater transparency, while taking into account the recommendations of the G20 Financial Stability Board on climate, and of the Task Force on Climate-related Financial Disclosures (TCFD); and
- the development of new state-of-the-art energy companies, since 2017 within the Breakthrough Energy Coalition (BEC), a group of investors created by Bill Gates in 2015, and since 2016 within the Breakthrough Energy Ventures, a $1 billion fund created in 2016 by the BEC.
The list of trade associations of which Total is a member and the lobbying Ethics Charter that governs these memberships are published on the website total.com. The Group cooperates with these associations mainly on technical or scientific matters, but certain associations sometimes take public stances on climate change. In 2019, Total assessed the 30 main trade associations to which it belongs in order to check that they are in line with the Group’s stance on the climate. This alignment was reviewed according to six key points: their scientific position, the Paris Agreement, carbon pricing, the role of natural gas, the development of renewable energies and the development of CCUS. Following this review, Total decided not to renew its membership of the American Fuel & Petrochemical Manufacturers association. Total remains a member of the three associations (the American Chemistry Council, the American Petroleum Institute and the Canadian Association of Petroleum Producers) identified as being partially aligned, to advocate internally for changes in their positions. Total would reconsider its memberships in the event of lasting divergences.
Total also actively participates in the debate on climate issues, thanks especially to its long-term partnerships with university chairs, such as the Climate Economics Chair at Paris-Dauphine University, the climate change research program of Massachusetts Institute of Technology (MIT)(11), and Toulouse School of Economics. Total also offers training and makes presentations at several universities, thereby taking part in the debate.
(11)The Joint Program on the Science and Policy of Global Change.
Resilience of the organization’s strategy
In order to ensure the viability of its project and long-term strategy in light of the challenges raised by climate change, the Group integrated, into the financial evaluation of its investments presented to the Executive Committee, a CO2 price of $30 to $40 per ton (depending on the price of crude oil), or the actual price of CO2 in a given country if higher. Since January 1, 2020, the Group has been taking into account in the economic evaluations of investments submitted to the Executive Committee a CO2 price of $40/t with a sensitivity of $100/t as from 2030, independent of the Brent price scenarios.
Regulations designed to gradually limit fossil fuel use may, depending on the GHG emission limits and time horizons set, negatively and significantly affect the development of projects, as well as the economic value of certain of the Group’s assets.
The Group performs sensitivity tests to assess the ability of its asset portfolio to withstand an increase in the price per ton of CO2. In 2019, these tests show that a long-term CO2 price of $40/t(12) applied worldwide would have a negative impact of around 5% on the discounted present value of the Group’s assets (upstream and downstream). In addition, the average reserve life of the Group’s proved and probable reserves is approximately 20 years and the discounted value of proved and probable reserves beyond these 20 years is around 10% of the discounted value of the Group’s upstream assets.
The limited level of 2019 impairments reflects the resilience of the portfolio on a long-term price trajectory in line with the IEA Sustainable Development Scenario (SDS).
As part of the annual preparation of its long-term plan, Total makes long-term energy demand forecasts (oil, gas and electricity). The Group presented in February 2019 these forecasts (Total Energy Outlook), available on total.com.
(12)40$/t as from 2021 for all countries, or the current price in a given country if it is higher than 40$/t.
Process to identify and assess risks related to climate change
Climate-related risks form part of the risks that are analyzed by the Group Risk Management Committee. To this end, it uses the risk-mapping work.
In addition, the Risk Committee (CORISK) assesses investment projects, risks and corresponding climate-related issues (flaring, GHG emissions, sensitivity to CO2 prices) before they are presented to the Executive Committee.
Processes to manage risks related to climate change
In its decision-making process, the risks and associated climate issues are assessed prior to the presentation of the projects to the Executive Committee. If the level of risk requires it, they are subject to mitigation measures.Total, in accordance with its Safety Health Environment Quality Charter, is committed in particular to managing its energy consumption and develops processes to improve its energy performance and that of its customers.
The Group also 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 construction of industrial facilities, which are designed to withstand both normal and extreme conditions. The Group carries out an assessment of the possible repercussions of climate change on its 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.
Integration of climate-related risks into global risk management
TARGETS AND METRICS TO MEASURE CLIMATE-RELATED RISKS AND OPPORTUNITIES
Total has set targets and introduced a number of indicators to coordinate its performance.
The Group intends to reduce the carbon intensity of energy products used by its customers by 15% between 2015, the date of the Paris Agreement, and 2030 and by 35% by 2040. This carbon intensity was already reduced from 75 g CO2e/kBtu in 2015 to 70 g CO2e/kBtu in 2019, a reduction of 6%. This reduction was achieved in particular through a threefold increase in LNG sales (from 10 to 34 Mt) and an almost eightfold increase in electricity sales (from 6 to 46 TWh) ; over the same period, these efforts were accompanied by investments of more than $20 billion.
Indicators related to climate change(a)
|SCOPE 1 - Direct greenhouse-gas emissions (operated scope)||Mt CO2e||41||40||38||41||42|
Breakdown by segment
Hydrocarbons Upstream activities
|Refining & Chemicals||Mt CO2e||20||21||21||22||22|
|Marketing & Services||Mt CO2e||< 1||< 1||< 1||< 1||< 1|
|Integrated Gas, Renewables & Power (excluding gas upstream activities)||Mt CO2e||3||2||0||0||-|
|SCOPE 1 - Direct greenhouse-gas emissions based on the Group's equity interest||Mt CO2e||55||54||50||51||50|
|SCOPE 2 - Indirect emissions attributable to energy consumption by sites||Mt CO2e||4||4||4||4||4|
|GHG emissions (Scopes 1 & 2) on operated oil & gas facilities||Mt CO2e||41.5||42||41||45||46|
|SCOPE 3(b) - Other indirect emissions - Use by customers of products sold for end use||Mt CO2e||410||400||400||420||410|
|Net primary energy consumption (operated scope)||TWh||160||143(c)||142||150||153|
|Group energy efficiency indicator (GEEI)||Base 100 in 2010||88.0||88.4||85.7||91||90.8|
|Daily volume of all flared gas (hydrocarbons Upstream activities operated scope) (including safety flaring, routine flaring, and non-routine flaring)||Mm3/d||5.7||6.5||5.4||7.1||7.2|
|Of wich routine flaring||Mm3/d||0.9||1.1||1||1.7(d)||2.3(e)|
|Carbon intensity of energy products used by customers of the Group||g CO2e/kBtu||70||71||73||74||75(f)|
(a) Refer to the “Reporting scopes and methodology” section for the scope of reporting.
(b) The Group usually follows the oil industry reporting guidelines published by IPIECA which are conform to the GHG Protocol methodologies. In this document, only item 11 of scope 3 (use of sold products), which is the most significant, is reported. Emissions for this item are calculated based on sales of finished products for which the next stage is end use, in other words combustion of the products to obtain energy. A stoichiometric emission factor is applied to these sales (oxidation of molecules to carbon dioxide) to obtain an emission volume.
(c) Excluding primary energy consumption of Direct Énergie gas power plants.
(d) Estimated volume at end 2016 based on new definition of Routine Flaring published in June 2016 by the Working Group Global Gas Flaring Reduction.
(e) Volumes estimated upon historical data.
(f) Indicator developed in 2018, with 2015 as the baseline year.
These data as well as the related risks are also reported to the CDP(13) once a year, and Total’s response to the CDP Climate Change questionnaire is posted on this website. For its 2019 reporting regarding 2018 activities, the Group received an A-.
Reducing routine flaring has been a long-standing target of the Group, which designs its new projects without resorting to it. In addition, Total is committed to putting an end to routine flaring of its operated facilities by 2030. An 80% reduction target was set for 2020 compared to 2010, in other words, an average of 1.5 Mm3/d. This target has been met since 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 flaring of gas associated to oil production.
The decrease in flaring in 2019 is due to better compressor reliability and shorter start-up periods in Africa.
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 end 2019, all the concerned sites reported compliance or had taken steps to comply with this directive. The aim is to ensure that 100% sites using more than 50,000 tons of oil equivalent per year by the end of 2020 have an auditable energy management system, such as the ISO 50001 on energy management(14). A certain number of sites that use less than 50,000 tons of oil equivalent per year have, voluntarily, taken measures to become ISO 50001 certified.
Energy efficiency is a key factor for the 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 target for the 2010-2020 period is to improve the energy efficiency of its operated facilities by an average of 1% per year. By design, the base value of the GEEI was defined as 100 in 2010 and the target is to reach 90.4 in 2020. This target has been met since 2017.
Through the Total Ecosolutions program, the Group is developing innovative products and services that perform above market standards on the environmental front. At year-end 2019, 95 products and services bore the Total Ecosolutions label. The CO2e 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 2.2 Mt CO2e in 2019.
(14)The ISO 50001 standard accompanies the implementation in companies of an energy management system that allows a better use of energy.
The Group has reduced by 50% the GHG emissions (Scopes 1 & 2) produced by its operated activities since 2005. This reduction was reached thanks to notably reducing flaring and improving energy efficiency.
In 2019, Total set itself a target to reduce GHG emissions (Scopes 1 & 2) on its operated oil & gas facilities to less than 40 Mt CO2e in 2025.
Carbon intensity indicator of the products used by its customers
Total wishes to fully address the issue regarding the emissions of energy products used by its customers and therefore decided to report all of the emissions associated with these products in the form of a carbon intensity indicator.
This indicator measures the average GHG emissions of these products throughout their life cycle, from production to end use by the Group’s customers. This indicator takes into account:
- for the numerator:
- the emissions connected to the production and conversion of energy products used by the customers on the basis of the Group’s average emission rates;
- the emissions connected to the use of energy products used by the customers. For each product, stoichiometric emission factors(15) are applied to these sales to obtain an emission volume. Non-fuel use products (bitumen, lubricants, plastics, etc.) are not taken into account;
- negative emissions stored thanks to CCUS and natural carbon sinks;
- for the denominator: the quantity of energy sold, knowing that electricity is placed on an equal footing with fossil fuels by taking into account the average capacity factor and average efficiency ratio.
The Group intends to reduce its carbon intensity by 15% between 2015, the date of the Paris agreement, and 2030 and by 35% by 2040. This undertaking represents a responsible contribution by Total to the Paris agreement targets and it also enables the Group to fulfill its mission to supply to as many people as possible a more affordable, more available and cleaner energy.
(15) The emission factors used are taken from a technical note from the CDP: Guidance methodology for estimation of scope 3 category 11 emissions for oil and gas companies.
TCFD CORRESPONDENCE TABLE
In June 2017, the TCFD(16) 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. Total publicly announced its support for the TCFD and its recommendations and has implemented them since its 2017 annual report.
Total continued discussions by taking part in the Oil & Gas Preparer Forum, which published, in July 2018, the best practices on the disclosure of climate-related information and on the implementation of TCFD recommendations by the four companies that are members of the Forum(17).
In 2019, Total also took part in the first Task Force set up by the EFRAG (European Financial Reporting Advisory Group) Reporting Lab on Climate-related disclosures, which aim to identify the best practices in this area. This Task Force published the results of its work in February 2020.
(16) Task Force on Climate-related Financial Disclosures.
(17) Eni, Equinor, Shell and Total, with the support of the WBCSD (World Business Council for Sustainable Development).