Tuesday 3 December 2019 3:04 pm

Spanish oil giant Repsol pledges to cut emissions to zero by 2050

On Monday Spanish oil giant Repsol pledged that it would reduce net carbon emissions from its operations and products to zero, taking a €4.8bn (£4.1bn) value hit in the process.

The company, which described the move as an industry first, announced the step on the first day of the UN climate change summit in Madrid.

Read more: UK oil industry calls for urgent action on carbon capture development

In a statement, chief executive Josu Jon Imaz said: “We are convinced that we must set more ambitious objectives to fight climate change.”

The Madrid-headquartered firm said that its new target covers 95 per cent of the emissions released by its products.

In a sign of the seriousness with which Repsol is taking its pledge, 40 per cent of managers’ long-term variable pay will be linked to emissions reduction targets.

As many other major oil producers continue to invest in new assets, Repsol’s announcement has met with praise.

Natasha Landell-Mills, head of stewardship at Sarasin & Partners, said:

“We have been pressing fossil fuel companies to commit to align with a net zero emissions pathway by 2050 for some time. It is good to see Repsol showing this leadership, including clear milestones along the way.

“Critically, is aligning its financial statements with this goal, by lowering the long-term oil and gas price assumptions that underpin asset valuations on the balance sheet.

“Repsol taking this step should cause other large oil and gas companies and their auditors to ask themselves whether they may also be using excessively optimistic oil price assumptions when drawing up their balance sheets.”

Meanwhile, a group of top executives and labour leaders, including the heads of Apple, Tesla, Unilever and Shell, called on the US to stay in the Paris agreement.

In a statement, the group said: “Staying in the Paris Agreement will strengthen our competitiveness in global markets, positioning the United States to lead the deployment of new technologies that support the transition, provide for our workers and communities, and create jobs and companies built to last.”

Read more: Oil industry to spend £15bn on North Sea decommissioning

The plea came as the International Labour Organisation said that policies to create a greener economy could see 24m new jobs created around the world by 2030.

It also warned that a rise in temperatures caused by climate change could remove 80m jobs by the same date, predominantly in poorer countries.