Snam's Net Zero Carbon strategy
With its Towards Net Zero strategy, Snam put its commitment to decarbonisation at the centre of the 2020-2024 Plan integrating sustainability and ESG issues in an even more significant manner within its strategic choices.
Snam has established ambitious and challenging goals, which will put the Group in a leadership position in achieving carbon neutrality by 2040, in advance with respect to European and domestic objectives and in line with the targets for limiting global warming to 1.5°C, as called for in the Paris Agreement signed in 2015.
In this area, objectives are aimed at reducing:
- Scope 1 direct emissions through specific actions involving CO2 (carbon dioxide) and CH4 (methane) emissions. More specifically, Snam intends to install electrocompressors on 8 compression units, as well as gas turbochargers, increasing the energy efficiency of its assets to reduce CO2 emissions. Use of the Leak Detection and Repair (LDAR), replacing pneumatic systems and gas recompression, will be fundamental in reducing methane emissions;
- Scope 2 Indirect CO2 emissions, relative to which Snam plans to increase consumption of electricity derived from certified renewable sources;
Relative to other indirect CO2 emissions (Scope 3), Snam plans to strengthen cooperation with its suppliers and associated companies to progressively and significantly reduce emissions throughout the value chain.
Scope 1 and Scope 2 emissions
Snam has set itself an even more challenging target for reducing Scope 1 and Scope 2 emissions, going from -40% to -50% in 2030 (with respect to 2018), to achieve carbon neutrality by 2040.
Over half of these reductions will be achieved through the project to covert stations to dual-fuel: by 2040, Snam will convert 8 of its stations, specifically Malborghetto, Messina, Poggio Renatico, Fiume Trieste, Minerbio, Settala and Sergnano by 2030, and the power station of Ripalta by 2040.
The remaining part of the Plan reductions are linked to the Group’s commitment to reduce methane emissions by 45% by 2025, compared to 2015 amounts, a target in line with the requests made by Oil and Gas Methane Partnership10 (OGMP) 2.0, to which it adhered in November 2020.
To achieve the objective of carbon neutrality by 2040, once the necessary greenhouse gas emission reduction initiatives have been implemented, the Group will compensate for its residual greenhouse gas emissions by supporting offsetting projects11.
Snam and the Task Force on Climate-Related Financial Disclosure (TCFD)
Snam’s commitment to act as a major player in the energy transition is made concrete realized through more transparent reporting focussing on the issue of fighting climate change. Since 2018, the Company has published a stand-alone document in accordance with the recommendations of the Task Force on Climate-Related Financial Disclosure (TCFD). The recommendations indicated by the Task Force are structured around four thematic areas, representing the fundamental elements of an organisation:
- Governance: describes an organisation’s governance model in relation to climate-related issues.
- Strategy: describes the actual or potential impacts of the risks and opportunities related to climate change on the business, strategy and financial planning of the organisation.
- Risk management: describes how the organisation identifies, measures, and manages climate-related risks.
- Metrics and Targets: describes the metrics and objectives used to measure and manage relevant climate-related risks and opportunities.
The Group’s climate objectives are in line with the goals set to contain global warming to within 1.5°C, as established in the Paris Agreement, and call for a 45% reduction in methane emissions by 2025, compared to 2015, a target which is in line with the requests of the Oil and Gas Methane Partnership (OGMP) 2.0.
In defining the Group’s objectives, Snam considered scenarios developed in cooperation with Terna (Document Describing the 2019 Scenarios), preparatory to the creation of transmission and transportation network development plans in the electricity and gas sectors nationally. This study develops joint Snam-Terna energy scenarios showing how technological development together with collaboration and synergies between the electricity and gas industries could be the key for reaching the global emission reduction targets. The scenarios put forward highlight how the European decarbonisation objectives will lead to the increasing use of green gases, such as hydrogen, biomethane and synthetic methane, partly replacing natural gas, not only in thermoelectric power plants, but also in end uses: civil, industrial and transportation.
The Group’s strategic and financial planning is closely interconnected with considerations on developments in the reference sector and the role Snam will play in guiding the energy sector’s decarbonisation process. More details on the Group’s strategy and its resilience with respect to climate change can be found in the document “Financial Disclosure on Climate Change 2020”, prepared in accordance with the recommendations of the Task Force on Climate-Related Financial Disclosures.
Further considerations on Group governance, its risk management process, the risks and opportunities identified, and performance can be found in the relative sections of this document.
Scope 3 emissions
Relative to other Scope 3 indirect emissions, that is all emissions associated with the company’s activities coming from sources which the Company does not control or own, throughout the entire value chain, the Group plans to strengthen its cooperation with suppliers and associated companies, to achieve progressive and significant reductions. The Group intends to involve suppliers and them and make them more responsible through the following actions:
- mapping their greenhouse gas emissions;
- requesting that the most important suppliers in terms of procurement complete the CDP Supply Chain Questionnaire;
- involving them in awareness-raising projects.
For associated companies, Snam intends to serve as a guide and advocate to improve their carbon footprints through:
- workshops and training programmes to share best practices;
- awareness raising projects aimed at encouraging the reduction of methane leaks, pneumatic emissions and the adoption of electric energy from renewable sources.
Snam and the CDP Foundation create Arbolia to create new forests in Italian cities
In addition to the emissions avoided thanks to new business projects, Arbolia, the new benefit company established by Snam and CDP Foundation, will guarantee absorption of CO2 thanks to the planting of new trees in Italian cities.
Through Arbolia, the two companies intend to create “a greener, cleaner, healthier and more beautiful Italy”, improving ecosystems, promoting biodiversity, making cities more resilient and creating occasions for social and economic development with additional positive effects on air quality and, consequently, quality of life.
The solutions proposed by Arbolia can be summarised in four main points:
- afforestation and reforestation with trees and bushes for businesses and citizens in urban and suburban areas, serving as public areas and made available to public administrations and private individuals;
- care and maintenance for the trees during the first two years mainly through irrigation, grass cutting and replacement of trees or bushes which did not take root, with respect for biodiversity;
- carbon footprint analysis services with TEP Energy Solution intended for companies and public administrations, for use in certification, incentives and offsetting processes associated with forestation activities and CO2 absorption;
- direct dialogue with institutional stakeholders and companies to offer them opportunities to create roots in the local area by creating shared values and promoting virtuous sustainable behaviour.
Thanks to Arbolia, Snam will contribute to the achievement of some important Sustainable Development Goals, in particular SDG 11 to make cities more liveable and sustainable, SDG 13, linked to climate protection and SDG 15 to restore the earth’s ecosystem.
Arbolia’s first project was developed in December 2020 in Parma, where over two thousand trees were planted in an area of around 20 thousand square metres. The environmental impacts of this initial project are already significant, total absorption of CO2 per year is estimated at 178 tonnes and 483 kg of fine particles per year.
10 The OGMP is an initiative created by the UN Environment Programme (UNEP), which encourages companies to reduce the methane emissions caused by their business.
11 Offsets are discrete reductions in greenhouse gases (GHG) used to compensate for GHG emissions occurring elsewhere. Offsets are calculated with respect to a baseline which represents a hypothetical situation with regards to emissions in the absence of the mitigation (offsetting) project. (The Greenhouse Gas Protocol, A Corporate Accounting and Reporting Standard – Revised Edition, 2004)