The African Refiners and Distributors Association (ARDA) has said carbon mitigation strategies remain key for securing financing to execute long-term strategies that will boost refining, value-added petrochemicals, efficient storage and distribution and Liquefied Petroleum Gas for Clean Cooking strategies across Africa.
The Executive Secretary of ARDA, Anibor Kragha, speaking during a yearly workshop of the association said refineries play a central role in global emissions as emitters of CO2 and suppliers of fossil fuels.
According to him, carbon abatement projects will provide new value-creation opportunities for players in the sector such as participation in the African Carbon Markets Initiative (ACMI) that was launched during COP 27 in Egypt last year.
This is coming at a time when Saudi Arabia and its international companies announced the successful auction of over 2.2 million tonnes of carbon credits at the largest-ever voluntary carbon credit auction held in Nairobi, Kenya.
Senior Manager of Climate Change at Ipieca, Lorena Perez Bajo, in a presentation titled; “COP 27 and Pathways to a Just Energy Transition” disclosed that the total investment needs for climate action on a global level will reach $2.0 to $2.8 trillion per year by 2030.
Bajo said Africa is estimated to need financing of $280 billion yearly by 2030 for investments in mitigation and adaptation based on Nationally Determined Contributions (NDCs) and $75 billion to $150 billion per year for infrastructure and climate investments.
She also shared that Africa could follow various pathways and elements to contribute to its net-zero emissions future including just transition, alternative energy, energy efficiency, carbon offsets, flaring reduction, methane emissions, hydrogen and carbon, capture & sequestration (CCS).
International Policy Director of the International Emissions Trading Association (IETA), Andrea Bonzanni, shared modalities of Article six of the Paris Agreement, which governs carbon credits mechanisms and what to expect in COP 28 in terms of the role of carbon credits in NDCs.
Bonzanni also stated that 80 per cent of countries globally have signaled their intention to use international market mechanisms or broad international support to meet their NDCs and over 20 per cent of countries are actively engaged in at least one cooperative approach through bilateral agreements, MOUs or participation in pilot projects.
He further stated that current work done on modeling the economics of Article Six at the University of Maryland in the United States has identified $250 billion a year in savings by 2030 when implementing NDCs using Article Six as against independent implementation.
An additional reduction of 5Gt CO2 equivalent per year by 2030 if savings are invested in additional mitigation activities which will mobilize up to $1 trillion a year by 2050 in international financial flows towards emission reduction and removal activities.
Martinez shared that Ecopetrol’s 2040 Corporate strategy was launched in 2021 and one of its pillars was to grow energy transition – specifically for this to comprise 30 to 50 per cent of its earnings (EBITDA) by 2040 and the company has made key acquisitions that have resulted in it achieving 20 per cent of EBITDA already.
As a key NOC, with 20 per cent of Colombia’s national budget earmarked for the company’s operations, Ecopetrol has been tasked with pursuing the energy transition agenda while generating acceptable returns to its shareholders.
Santiago shared that Ecopetrol aims to reduce its scope one and two carbon emissions by 25 per cent by 2030 and 50 per cent reduction in scope one, two and three emissions by 2050 via technology, natural climate solutions and portfolio optimization to reduce carbon footprint.
He stated that Ecopetrol has conducted an evaluation of its asset base and identified that assets generating only two per cent of value for the company are responsible for generating 20 per cent of the emissions.
