Repsol

Repsol’s low-carbon transition plan is a leading example for the sector. The company has created a comprehensive plan which includes short-, medium- and long-term details and considerations as well as financial commitments, and it has been informed by climate scenario analysis, including a 1.5°C scenario. The company provides a detailed vision of what the its energy mix will look like in 2050 under different decarbonisation scenarios. It also uses an internal carbon price of USD 70 per tonne of carbon dioxide (tCO2) for investment inside the European Union (EU) and USD 60 outside the EU. Furthermore, the company presents and holds a shareholder vote on its transition plan at its annual general meeting (AGM).

Repsol has set a number of emissions reduction targets, including both long-term and interim targets. However, the company’s targets for scope 1, 2 and 3 emissions could not be scored as they include a contribution from avoided emissions, which are not considered as emissions reduction in this benchmark assessment. It is unclear what proportion of the company’s targeted reductions will be achieved through avoided emissions and how the company calculates its avoided emissions. Moreover, the company’s scope 3 targets only include the downstream emissions associated with its upstream production. These emissions are less than half of the scope 3 emissions from its refinery production. The company should set targets that cover all relevant sources of emissions.

Repsol’s locked-in emissions from current and planned assets are expected to significantly exceed its 1.5°C carbon budget for the period 2022 to 2050. The company is planning to expand its upstream production to 620,000 barrels of oil equivalent per day (mboe/d) by 2025 (from 550,000 barrels in 2022) and does not plan to reduce production until 2030. The company has also not committed to stop oil and gas exploration and expansion. This does not align with the International Energy Agency’s (IEA) Net Zero Emissions (NZE) by 2050 Scenario, which does not allow for the expansion of producing assets beyond those sanctioned prior to 2022.

Repsol has successfully reduced its scope 1, 2 and 3 emissions intensity from 2019 to 2022. This is mainly due to an increased proportion of gas in the company’s energy mix. To align with its 1.5°C pathway, Repsol needs to reduce its intensity by over 4% annually over the period 2022 to 2027. The company is growing its renewable capacity and has significant biofuel capacity (around 55% of which is second generation) and hydrogen production from renewable sources (green hydrogen). In order to achieve the reductions necessary to align with its 1.5°C pathway, the company should also look to significantly expand these low-carbon activities.

Repsol has set a number of targets covering its scope 1 and 2 and its scope 3 emissions from its upstream activities, including both emissions intensity and absolute emissions targets. The company is aiming to be net zero for these emissions by 2050 and has also set interim targets for 2025, 2030 and 2040.

Repsol is planning to significantly expand its renewables, biofuels and green hydrogen businesses. The company plans to have 10-15 gigawatts (GW) of renewable hydrogen capacity and 40-55 GW of renewables by 2050. However, the company has not committed to exit fossil fuel production, but anticipates that its hydrocarbon production will be between 100-300 mboe/d (a 45-80% reduction compared to 2022 levels) depending on future decarbonisation scenarios.

The company is currently working to expand its renewable capacity with plans to go from 1.6 GW in 2022 to 6 GW in 2025 and 20 GW in 2030. It is also expanding its production of biofuels, prioritising biofuels from waste over first generation. It is reducing its operational emissions through electrification, methane reduction and efficiency measures. The company also engages with its clients to encourage the installation of solar panels and supports distributed generation through its Solmatch programme.

Repsol has made significant progress to reduce its methane emissions and its flaring, including reducing its methane intensity from 1.34% in 2017 to 0.23% of methane emissions per volume of gas produced in 2022. The company has reduced its operational emissions intensity in line with its 1.5°C pathway. Repsol has also made some progress in reducing its scope 1, 2 and 3 emissions intensity, mostly due to an increased proportion of gas in its sold energy mix, however not at a rate sufficient to align with its 1.5°C pathway.

Repsol has a detailed transition plan and has started to develop multiple new low-carbon business models, which would allow it to decarbonise its activities. It has set a net-zero target for 2050 with multiple interim targets. However, the company’s targets include the use of an unquantified proportion of offsets and avoided emissions and do not cover all of the company’s scope 3 emissions. Repsol is planning to expand its oil and gas production and has not committed to cease exploration.

The company publicly discloses a commitment to engaging in social dialogue with workers and unions. However, no relevant disclosure was found regarding the categories of stakeholders it engages with on a just transition. Nor was there any evidence to show the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in just transition planning.

The company has a commitment to create and support access to green and decent jobs as part of the low-carbon transition. Furthermore, it discloses the actions it takes in this regard, such as creating the Spanish Hydrogen Network, which is epxected to generate 13,000 jobs in Spain. However, no evidence was found that the company discloses the measures it takes to ensure that these jobs embed equality of opportunity for women and vulnerable groups. Moreover, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company has a commitment to reskill and upskill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. For instance, it offers training on energy transition to its upstream suppliers as well as on industrial safety and renewable energy to its employees in the industrial transformation and circular economy division. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. Furthermore, the company discloses a human rights due diligence process that includes the identification and assessment of salient human rights risks, such as human rights in the value chain, rights of communities and special rights of indigenous communities, labour rights, land rights and environmental rights. The company takes action to mitigate these risks in its own operations and in its supply chain, and it engages with affected stakeholders. Additionally, the company has a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. However, no evidence was found of the company having a time-bound target for paying all workers a living wage. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company’s required working hours. The company discloses some indicators of workforce diversity, including the age and gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. The company commits to gender equality and women’s empowerment.

The company commits to protecting personal data and has a privacy statement regarding the collection, sharing and access to personal data. The company also discloses its global tax strategy and the corporate income tax it pays in each relevant jurisdiction. The company has a policy prohibiting bribery and corruption, and it includes corresponding clauses in its business relationship contracts. Additionally, the company has a lobbying and political engagement policy, and it specifies that it does not make political contributions. However, no relevant disclosure was found of the company’s expenditure on lobbying activities.