ENGIE

ENGIE is planning to increase its average annual renewable electricity added capacity from 3 GW in 2020 to 4 GW from 2022 to 2025 and 6 GW from 2026 to 2030. The company supported the expansion of its renewable generation by dedicating 95% of its total generation CapEx to low-carbon generation in 2020. It also aims for a 58% share of renewable energy in its electricity production capacity mix by 2030, compared to 31% in 2020.
Furthermore, ENGIE is investing in biomethane and green hydrogen. Its Gaya project produced biogas from non-recyclable solid waste for the first time in 2020 and is projected to generate 150 GWh of renewable gas by 2026 by recovering 70,000 ton of non-recyclable waste each year.

ENGIE has set a target to reduce its scope 1 and 3 emissions intensity (covering energy production) by 52% by 2030 compared to 2017. It also has a target to reduce its scope 3 emissions from the use of sold products by 34% by 2030 compared to 2017. The Science Based Targets initiative has verified that these two targets are consistent with a 2°C pathway. ENGIE also aims to be carbon neutral for all scopes by 2045. However, ENGIE should aim to be carbon neutral by 2040 as this is the expectation for electric utility companies with assets in emerging economies. It should also add more intermediary objectives to incentivise near-term action over the long-term goals.

In 2020 ENGIE invested around EUR 156 million (USD 178 million) in research and development (R&D) for low-carbon technologies. This is equivalent to 2% of its total capital expenditure (CapEx), which remains below the sectoral expectation that electric utility companies should be investing 5% of CapEx in low-carbon R&D to be aligned with a 1.5°C scenario.
Notably, ENGIE signed a partnership with ArianeGroup, which aims to develop hydrogen liquefaction to decarbonise heavy and long-distance transport. In 2020, ENGIE opened a new business research centre (CRIGEN) in France dedicated to green gas and carbon neutral solutions and commissioned a multi-fluids micro-grid research platform in Singapore (REIDS SPORE).

ENGIE has implemented board-level oversight of climate change and several members of its board have significant energy or environment expertise. Board members’ renumeration is linked to climate change, with 3% of the company’s 2021-2024 long-term incentive plan linked to meeting emissions reduction and renewable capacity targets. However, executive compensation is also still being tied to fossil fuel generation. Nonetheless, ENGIE’s new CEO Catherine McGregor is maintaining an ambitious climate strategy. ENGIE’s low-carbon transition plan is comprehensive, though its climate scenario analysis could be improved by relying on the 1.5°C scenario released by the IEA in May 2021.

ENGIE does not have a company policy on trade associations though it reports it will publish one soon. It predominantly supports trade associations with decarbonisation agendas. It is a member of Eurogas, which still promotes natural gas as a transition fuel but has improved its position by establishing a commitment to 2050 carbon neutrality and recently increasing its ambition to achieve this sooner. ENGIE can increase the credibility of its engagement on climate by implementing a company policy on trade associations and processes to withdraw from associations that oppose climate policies.

ENGIE aims at a 52% reduction in emissions intensity covering the scope 1 and 3 of the energy it produces and a 34% reduction for its absolute scope 3 emissions from the use of sold products, both by 2030 compared with 2017. The company commits to achieve net-zero emissions for all scopes by 2045.

ENGIE announced its commitment to exit all coal assets in Europe by 2025 and globally by 2027, including coal generation for district heating and cooling networks. In 2020, ENGIE had 10 remaining coal power plants and plans to close four plants, convert four others to low-carbon energy and finally divest from the last two.

In 2020, 95% of ENGIE’s electricity generation CapEx went to renewables and nuclear sources. The company plans to invest around EUR 6-7 billion (USD 6.85-8 billion) into renewables from 2021 to 2023. Important investments will also be made for the company’s networks and energy solutions business activities.

Between 2015 and 2020, ENGIE’s emissions intensity from electricity generation decreased by 52% due to the closure of its coal plants and an increasing share of solar and wind power. However, the rate of decrease should be increased by a factor of around 1.5 for ENGIE to align with its 1.5°C pathway.

ENGIE has a detailed low-carbon transition plan and is investing significantly in renewables projects. Its strategy is consistent but to maintain decreasing emissions in the future, ENGIE’s main challenge will be to successfully adapt its gas portfolio to biomethane and hydrogen production.