INSIGHT: Climate change prompts oil, petchem firms to go green in earnest

SINGAPORE (ICIS)–A recent deal between SABIC and Spanish utility Iberdrola – to invest almost €70m to construct a 100MW solar PV facility with 263,000 panels on the SABIC-owned Cartagena site – reflects the earnestness of petrochemical and oil companies to go green amid climate change.

SABIC’s move marks a trend of such companies to divert their portfolios to renewables from fossil fuels.

The pressure is mounting as earth struggles with global warming, melting glaciers, rising sea levels, possible decimation of polar bears, long periods of droughts or drastically heavy rainfalls, raging forest fires and notoriously, the coronavirus pandemic inflicting the whole world.

Meanwhile, for SABIC, once fully operational in 2024, the facility will be the largest industrial power plant in Europe, and its polycarbonate facility, at the same site, is set to run entirely on renewable energy.

“The new PV plant will deliver an 80kt annual reduction in indirect CO2 emissions, and further strengthens our support and contribution to wider climate change initiatives like EU 2030 and our alignment with the UN Sustainable Development Goals,” said SABIC’s Bob Maughon.

The 25-year deal represents another step by SABIC’s to transition all its global operations to cleaner energy.

Its target is to have 4GW of either wind or solar energy installed for its sites globally by 2025, and to treble that to 12GW by 2030.

Oil major Eni had announced the successful completion of a 18MW new solar PV capacity in Italy.

The plant will operate under the business unit Energy Evolution, a renewable-focused business group launched in early June, in a bid to pivot to clean energy. The company already operates 84MW solar capacity in the country.

Italy currently has 21GW PV capacity, that accounts for 24% of the domestic power generation, according to data from ICIS Analytics.

In its National Energy and Climate Plan (NECP), a 10-year roadmap aimed at achieving progressive decarbonisation, Italy committed to more than double its solar production, to reach a total capacity of 52GW by 2030.

For this to occur, an additional capacity of 32.4GW must be brought online in the coming years.

In April, Chinese oil major Sinopec said under its Green Action Plan, it aims to become a clean, efficient and low-carbon enterprise by 2023 when the share of its clean energy output is set to exceed 50 percent of its total output – with an annual natural gas production capacity of 40 billion cubic meters.

More than 10,000 kilometers of gas pipelines will be utilised, while the transfer capacity of LNG will reach more than 26 million tonnes per year.

Sinopec plans to boost its geothermal heating capacity to 120-150 million square meters by 2023, providing geothermal heating to about 2.1 million urban residents.

The company has pledged to build another 1,000 natural gas stations for vehicles within six years.

Additional reporting by Federica Di in London

Insight article by Felicia Loo