Italy’s Eni on Friday became the latest energy group to increase its climate ambition with a promise to be carbon neutral by 2050, as it seeks to keep pace in an industry under mounting investor pressure to curb emissions.
Eni shares, which rose more than 3% after the plan, were up 1.2% by 1615 GMT versus a 0.5% rise in European oil and gas index.
“We commit to the full decarbonisation of all our products and processes by 2050,” Chief Executive Claudio Descalzi said. “Our plan is concrete, detailed, economically sustainable and technologically proven.”
In an update to a clean-up drive announced last year, Eni said it would cut absolute emissions by 25% by 2030, from 2018 levels, and by 65% by 2040.
Eni announced its plans after newly-appointed Prime Minister Mario Draghi at the weekend put climate change at the heart of his plans for Italy and said his government intends to boost renewable energy and green hydrogen production.
Its ambitions also follow other announcements from other energy companies, which have set varying targets to reduce greenhouse gas emissions from their operations and the use of the products they sell.
Eni, which makes most of its earnings from oil and gas, said the 2050 decarbonisation goal would be reached by growing output from bio-refineries, raising renewable capacity, forestry initiatives, carbon capture and other green projects.
“This is a target, not an aspiration,” Descalzi told analysts during a presentation, adding management salaries would be tied to it.
Eni will also pursue acquisitions to speed the green transformation and it raised the bar on renewable capacity to 60 gigawatts in 2050 from 300 megawatts now.
More than 2 billion euros (an equivalent of $2.43 billion) of asset sales are planned to help develop clean businesses including two possible new biorefineries in Italy and the United States and carbon capture and storage units in the United Arab Emirates and Libya.
Eni also said it would merge its renewable and retail businesses to grow its customer base in synergy with its green ambitions.
“This business combination makes Eni one of the main green retail operators in the European market,” Descalzi said.
The group plans to spend 7 billion euros per year over the next four years, with over 20% of that earmarked for green projects and the merged renewable and retail business.
Oil and gas production will rise 4% per year with oil production peaking in 2025 and gas expected to be some 90% of the portfolio in 2050.
The group, which expects operating cash flow of about 44 billion euros, will offer a dividend floor of 0.36 euros per share that will rise as cash flow increases from higher oil prices.
Earlier on Friday, Eni posted a better-than-expected adjusted net profit for the fourth quarter on firmer oil prices after “a year like no other in the history of the energy industry” sent full-year profits tumbling.
“We will never forget this exceptional year marked by the most unexpected and disruptive crisis we have ever seen,” Descalzi said.