Climate Risk Manager of the Year: Engie – Risk.net | Region & Cash

Not so long ago, sky-high energy costs and a carbon price approaching €100/tonne ($105/tonne), at least in Europe, would likely have reversed corporate climate action. Not anymore, says Jerome Malka, member of the Executive Committee of Engie Global Energy Management and Sales (Gems), energy risks 2022 Climate Risk Manager of the Year.

“We’re in a world with high energy costs, and carbon is part of that,” he says. “What my clients perceived five or ten years ago as something to fight against is now perceived as something to embrace. They embrace it because their customers want it, their shareholders want it, and their employees want it. Basically, society as a whole wants it.”

The European Union’s passage last year of the Fit for 55 legislative package aimed at putting the bloc on track to cut emissions by 55% by 2030 from 1990 levels gave Engie Gems’ work a boost Decarbonize a big push to support its customers, says Malka. In addition to this regulatory requirement, an energy security dimension has been added after the Russian invasion of Ukraine, he notes.

But the urgent realization that we need to move away from fossil fuels undoubtedly poses problems given the current conditions, Malka concedes. “To be honest it does bring some challenges in the short term, particularly with some supply chains shifting [affecting the renewables sector],” he says. “Sharp price increases for some commodities are also making it difficult to develop clean power plants.”

In addition, it remains difficult to obtain permits for new renewable energy projects in parts of the world, including Europe.

Despite all these challenges, Engie Gems has managed to expand its low-carbon offering, signing more than 2.3 GW of renewable energy purchases with customers throughout 2021 and the first quarter of 2022.

There are other regulatory obstacles Engie Gems and its customers face in decarbonization. Malka cites biomethane, which is recovered from waste streams and could potentially replace around 10-15% of current gas consumption. In addition to admitting problems in this market, in addition to “social acceptance”, he notes that regulatory obstacles to commercialization remain. “In France, electricity produced from green gas is not considered green – the industry has yet to give up EU Carbon credits, on the other hand.”

Nonetheless, Engie is seeing some success in this emerging market. For example, the company has structured its first industrial physical supply contract for biomethane to generate 245 gigawatt hours of electricity over a three-year period with a global healthcare company. Biomethane alone cannot wean Europe off Russian gas, but it “might well be the best answer in certain cases – and in an energy mix that is likely to be much more diverse than it is today, a component that accounts for 10-15% of demand is extremely relevant “, he says.

The company offers its customers the so-called “R6 Decarbonization roadmap” that takes them from emissions reporting to rethinking their energy profile, reducing energy use and replacing higher-carbon energy with a greener alternative. The fifth ‘R’ refers to energy consumption tracing with certificates that trace and trace the origin of a company’s energy supplies using blockchain technology, while the sixth ‘R’ represents distance to address residual emissions that are technically or cost-wise cannot be detected. effectively eliminated.

Here, Engie has teamed up with French insurer Axa with a start-up developer of nature-based solutions projects called Shared Wood to offer high quality carbon offset credits generated by forest projects in Africa and Latin America. “Forest projects are very easy to explain… but in reality they are among the most complex [emission reduction] activities,” he says. Issues such as land rights, social impact and regulations in some challenging jurisdictions make successful forest carbon projects extremely difficult to structure. “The three partners bring professional experience in forestry, the financing capabilities of our friends at Axa and our ability to link this activity to market needs,” he says.

Engie is also using its expertise to decarbonize its own companies. The company has set itself the goal of reducing its direct emissions by around 34% by 2030 compared to 2021. In addition, it also aims to reduce the Scope 3 emissions caused by its customers using the energy sold by Engie 66 million tons CO2e in 2021 to 52 million tons in 2030. “Reaching net zero will only be possible if we can do it together,” says Malka.

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