Compania Espanola de Petroleos SAU (CEPSA)

CEPSA has a company-wide target to reduce its scope 1 and 2 emissions intensity by approximately 13% by 2030 compared to 2016. As the target represents the whole company, including its power and chemicals business units, and does not specify the targeted reduction for its oil and gas activities, it could not be assessed against the company’s 1.5°C pathway for oil and gas. The company should set a long-term target for its oil and gas activities, with intermediate targets aligned with its 1.5°C pathway. It should also include scope 3 emissions in its targets to drive a reduction in sold product emissions.

In 2019, CEPSA spent EUR 18 million (USD 20.2 million) on research and development (R&D). The company reports that it undertakes R&D on renewable energy activities, as well as carbon capture and storage (CCS). However, it does not disclose the proportion of R&D spending or give further details on the projects. The company needs to strengthen its efforts towards low-carbon innovation to support its commitments to grow its renewable energy portfolio and use second-generation biofuels. It can improve its R&D disclosure by providing clear links between the low-carbon innovation it is working towards and its strategies to decarbonise.

CEPSA uses the International Energy Agency’s (IEA’s) Sustainable Development Scenario to inform its short-term climate strategy and evaluate climate-related risks and opportunities. However, there is no evidence that the company has analysed risks to its upstream exploration and production business unit, as it has applied the analysis to its refining and chemicals business only. Moreover, CEPSA has not evaluated risk beyond 2030. CEPSA reports that it is planning to develop a climate strategy until 2050. The company needs to undertake long-term scenario analysis, aligned with a 1.5°C scenario to inform its long-term climate strategy.

CEPSA requires all suppliers to report information on their annual emissions, including whether they measure direct emissions, which standard they use for measurement and their emissions per supplied project. CEPSA can further improve its supplier engagement by collecting actual emissions data and engaging with suppliers on low-carbon alternatives. Furthermore, CEPSA can demonstrate commitment to decarbonisation throughout the entire production life cycle by selecting suppliers based on climate and emissions reduction criteria and formalising a strategy to influence suppliers to reduce emissions.

CEPSA aims to develop business activities that drive a shift in its energy mix to a low-carbon economy. In 2019, it installed its first 28.8 megawatts (MW) of renewable wind capacity and signed a joint venture agreement to develop 500 MW of solar capacity. By 2030, it aims to produce 2 gigawatts (GW) from renewable sources. Moreover, it reports plans to produce its own biofuels using second-generation feedstocks, although it provides limited details on this plan.

Despite these aims, CEPSA needs to ramp up its renewable energy deployment and targets to align with the low-carbon economy. At present, it targets 600 MW of renewable capacity within five years but already produces 670 MW from gas power plants.