Total targets carbon neutrality

Total SA set out bolder commitments to eliminate most of its carbon emissions by 2050, while curbing spending on oil and gas projects due to the crude-price slump.
The French company’s commitment to invest more in clean energy, despite a sharp drop in profit as the coronavirus hammers fuel demand, illustrates the enduring pressure on oil giants from investors and society to tackle long-term environmental challenges. After a weak round of first-quarter earnings, oil supermajors have been forced to slash spending, curb production and even reduce their dividends in some cases. It could get worse in the months ahead as the public health crisis destroys as much as a third of global energy demand.
“While responsibly taking on the short-term challenges, the group continues to implement its medium and long-term strategy,” Chief Executive officer Patrick Pouyanne said in a statement on Tuesday.
Total’s shares rose 6% to 32.32 euros at 10:22 am in Paris, almost three times the gain in France’s benchmark index.
Total has invested billions of dollars in recent years in batteries, wind and solar energy, but it is also catching up with European rivals such as Royal Dutch Shell Plc, BP Plc and Repsol SA, which have already set ambitious climate targets.
The French company aims to have net-zero emissions from its own worldwide operations, known as scope 1 and 2, by 2050 or sooner. It’s targeting carbon neutrality for all its production and energy products used by its customers in Europe — known as scope 3 emissions — by 2050 or earlier.
Total wants to cut the average carbon intensity of energy products used worldwide by its customers by at least 60% by 2050, with intermediate steps of 15% by 2030 and 35% by 2040.
That’s similar to pledges made by its European peers, who have also reiterated their commitment to the transition to clean energy despite being under immense financial pressure due to a historic slump in oil and gas prices.
Total, which currently allocates more than 10% of its capital expenditure to low carbon electricity, will increase that share to 20% by 2030 or sooner.
The company had stakes in 3 gigawatts of renewable-power capacity at the end of last year, and is targeting 25 gigawatts by 2025. It recently took stakes in giant solar projects in India, and has expanded clean power in Spain, the UK and France.
Total’s first-quarter adjusted net income fell 35% from a year earlier to $1.78 billion, the company based near Paris said. Analysts polled by Bloomberg had forecast $1.57 billion on average. To ease financial pressures, the company decided to reduce its overall investments this year to below $14 billion, down from a March target of less than $15 billion and a February target of $18 billion. The company maintained its goal of spending as much as $2 billion in low-carbon power in 2020.
It will cut operational spending by more than $1 billion, a deeper reduction than a target of $800 million set back in March, and expects to save at least another $1 billion in energy costs. Total also offered to pay part of its final 2019 dividend of 68 euro cents in shares, known as the scrip, rather than cash.