Eni is a publicly listed integrated oil and gas company headquartered in Italy. In 2020, it had USD 14.58 billion in revenue and a reported 31,000 employees*. Eni is one of the seven oil majors. Although it has ambitious plans to decarbonise, grow its low-carbon businesses and reduce hydrocarbon production in the medium term, it views gas as a long-term transition fuel and aims to increase the gas share in its fuel mix to 90% by 2050.
Eni has demonstrated increasing climate ambition by updating its targets to achieve net-zero scope 1 and 2 emissions by 2040 and net-zero scope 1, 2 and 3 emissions by 2050. The targets include offsets from forestry projects, which contribute to 8% of the emissions reductions for its net-zero scope 1, 2 and 3 target.
The company has included several intermediate targets for 2030 and 2040 to hold management to account and continue driving decarbonisation in its business strategy. Eni can further improve its targets by increasing the period of its intermediate targets to cover regular 5-year intervals and reducing reliance on offsets by focusing on direct actions.
Eni has demonstrated strong management of climate change issues by including non-executive members with climate and transition expertise in its board. It has also included decarbonisation targets in its remuneration policy, notably replacing oil and gas exploration with renewable energy in the latest iteration of its short-term incentive plan, though it still has a remuneration incentive for oil and gas production.
The company’s transition plan includes long-term growth plans for several low-carbon business activities tied to its emissions targets. Eni can improve its management of climate issues under a 1.5°C scenario, by reducing the emphasis on gas production in its transition and undertaking company-wide, 1.5°C-aligned climate scenario analysis.
As part of its 2021-2024 strategy, Eni has committed 20% of its capital expenditure (CapEx) to decarbonisation activities and renewables, which will total EUR 1.4 billion (USD 1.57 billion) per year on average. This represents a significant increase from the company’s 5% CapEx in low-carbon technologies in 2020.
However, Eni should aim to further increase its CapEx share in low-carbon technologies. Under a 1.5°C scenario, oil and gas companies should be dedicating 77% of CapEx to low-carbon technologies.
Despite reporting scope 1 and 2 emissions intensity reductions at its operated facilities and increasing its share of renewable energy sales there has not been a significant shift in Eni’s sold product mix to indicate a reduction in its scope 1, 2 and 3 emissions intensity between 2014 and 2019. The company aims to increase production until 2025, when it forecasts a plateau, followed by a medium-term reduction. Eni’s aims to reduce hydrocarbon production applies mainly to oil, with gas share increasing to 90% by 2050. It is unclear whether total gas production will also decrease in the long-term.
Although increasing gas in its sold product mix will reduce its total scope 1, 2 and 3 emissions intensity, this alone will not be enough for Eni to align with the annual 4% decrease in sold product emissions intensity required by its 1.5°C pathway between 2019 and 2024. Continuing gas production could put the company at risk of not achieving its low-carbon transition under a 1.5°C scenario.
Eni demonstrates leadership in climate policy engagement by reviewing the climate change positions of the trade associations it engages with. Based on its review, Eni decided not to renew its membership with the American Fuel & Petrochemical Manufacturers (AFPM), which has demonstrated climate-negative positioning in the past.
However, Eni considers itself aligned with trade associations that promote the continued use of gas in the transition. Moreover, there is evidence that Eni has engaged in lobbying the European Union for pro-gas policies and the continued use of gas during the low-carbon transition, which does not align with the 1.5°C scenario in the long term without significant work to roll out abatement.
Eni is developing several low-carbon business activities, including energy efficiency services. It plans to rapidly ramp up renewable energy generation from the current 307 megawatts (MW) to 4 gigawatts (GW) in 2024, 15 GW in 2030 and 60 GW in 2050. It is expecting to phase out palm oil feedstock in biofuels and is aiming to produce sustainable biofuels amounting to 2 million tonnes in 2024 and 5-6 million tonnes in 2050.
The company has also partnered with Enel to produce green hydrogen, starting with two pilot projects either in 2022 or 2023. Eni has interests in multiple CCS facilities and is developing a major hub in Ravenna, Italy, where carbon will be captured from industrial zones. It aims to capture 7 million tonnes of CO2 in 2030 and 50 million tonnes in 2050.
Eni receives a trend score of =. If the company were reassessed in the near future, its score would likely remain the same. The company’s short-term scope 1, 2 and 3 emissions intensity trajectories suggest it is not on track to deliver the rate of emissions reduction required by its 1.5°C pathway. Despite ambitious emissions reduction targets and aims to reduce hydrocarbon production in in the medium term, the company intends to increase total production up to 2025. However, Eni’s low-carbon transition plan aims to significantly ramp up renewable energy generation, sustainable biofuel production, and develop a number of CCS projects.
Eni has targets for net-zero absolute scope 1 and 2 emissions by 2040 and net-zero absolute scope 1, 2 and 3 emissions as well as emissions intensity by 2050. It has also set intermediate targets for 2025, 2030 and 2040. All these targets include offsets from forestry, which accounts for 8% of the scope 1, 2 and 3 emissions reduction by 2050.
To achieve its net-zero by 2050 ambition, Eni plans to increase the share of gas in its fuel mix to 60% by 2030 and 90% by 2050 and to ramp up its deployment of projects for renewable energy and biofuel production. The company also aims to develop CCS projects combined with blue hydrogen production.
Eni has committed 20% of its CapEx to decarbonisation in its latest 2021-2024 strategy. It has approved renewable energy projects amounting to a capacity of 700 MW, on top of its currently installed capacity of 300 MW, and is developing CCS projects. However, Eni continues to explore for hydrocarbons and plans to grow its oil and gas production by up to 2025.
Eni has integrated decarbonisation into its business strategy by improving its emissions reduction targets, reviewing its trade association membership based on climate positioning and increasing emphasis on low-carbon activities and targets in its remuneration policy. However, the company increased hydrocarbon production by 17% between 2014 and 2019.
Eni has ambitious emissions reduction targets, interests in multiple low-carbon business activities and plans to reduce hydrocarbon production after a plateau in 2025. However, it has no plans to withdraw from gas production and lobbies for its continued use in the long-term. To achieve its net-zero target by 2050, Eni relies partially on forestry project offsets, rather than completely on direct actions.