Slowly but surely, even the world of economics and finance is realising the need to decarbonize. Now financial analysts are joining the conversation, strengthening the conviction that another way is possible. Almost unanimously, they are pointing out how traditional sources of energy are becoming less lucrative.
Britain was the cradle of the Industrial Revolution where gargantuan amounts of coal were first burned to fuel the factories and usher in modernity. But that is an epoch which has come to a close. Indeed, during the two-month lockdown brought about by the recent Coronavirus pandemic, Britain did not burn a single lump of coal to feed its national electricity grid. This was a startling piece of information provided to the BBC at the end of lockdown by the spokesperson for the National Grid, multinational electricity and gas utility company headquartered in London. As a result, the British Government has decided to invest on offshore wind farms.
On the other side of the North Sea, the German Government is trailblazing the road to change. Indeed, it has decided not to fast-track the closure of the old coal-fired power plants but rather to have them decommissioned or else converted by the end of 2020. Berlin is obviously aware of the imminent backlash on businesses and jobs in the areas affected. For this reason, it will adopt counteractive measures in the form of a multi-billion euro compensation plan, specifically, 2.6 billion euros for the power stations in the west of the country and 1.7 billion euros for those in the centre and the east. The central European powerhouse has gone further and bucked the trend of widespread fears over the resilience of the international credit and banking system. At the end of summer 2020, the German Government issued their first green bonds, which were an astonishing success.
Giving up coal is a big step in the process of energy decarbonisation
The federal government has placed a ten years bond of 6.5 billion euros and has already announced a new issue to the tune of 4.5 billion euros for the fourth quarter of 2020. Germany is not concealing its intention to become a leader in green government bonds. Despite the fact that it has some catching up to do with respect to other EU countries: Poland issued its first ones in 2016, France at the beginning of 2017, followed by Ireland, the Netherlands and Sweden. Chancellor Angela Merkel’s executive has said that these funds will be used expressly for decarbonization, so as to meet the limits laid down by the European Green New Deal. A year has already passed since the European Investment Bank (EIB) initiated its support for investments targeted at environmental protection.
Indeed, from the end of 2021 it will shun all finance for projects whose aim is to produce energy from fossil sources. The EIB’s policy statements set out five guidelines which clearly summarise the strategies of the Commission headed by Ursula von der Leyen. In the rest of Europe, too, financial institutions are adjusting accordingly. As can be seen on its website, the Italian insurance company Generali was among the first to announce that it would “no longer provide insurance cover for the construction of new coal-fired power plants… without any exception”. The Italian banking group UniCredit has likewise undertaken “to abandon coal mining projects completely for energy production by 2023”.
But Europe is not alone in its decision to move in this direction. Canada, the fourth-biggest oil producer in the world, has decided this year to halt the construction of new tar sand mines in the state of Alberta. As well as taking into account the increasingly enormous costs of mining in that type of terrain, the decision has been officially presented as a measure to safeguard communities of indigenous peoples. China and India, which, from an environmental standpoint, are paying a very high price for their extraordinary industrial growth rates, are always somewhat cautious when it comes to signing international climate agreements.
China accounts for a third of total global emissions and is hence the largest polluter in the world. To decrease its emissions, Beijing needs to invest at least 14 thousand billion dollars over the next ten years. In the meantime, the government has instituted a series of green credits to ensure industries –and the banks financing them– protection and necessary incentives in order to stimulate development of renewable energy: wind and solar power, research into non-polluting fossil fuels, and reforestation.
A solar power plant built on top of a mountain in Fujian, China
In the energy industry, going green is now a tangible reality for companies of the energy sector. Eni for instance,has long been investing in research and development of new energy sources, such as offshore wind farms, blue and green hydrogen, and solar power on new mounts other than the classical silicon panel. To conclude, where industrial interests, ethical issues and, above all, political decision-making all move along parallel paths, with decarbonization as the goal and renewable energy as the means to that end, change can occur more quickly and the final objective can be brought that much closer.
This website uses cookies to show you adverts and offer you services customised according to the preferences you have shown while browsing online. For further information please refer to our cookie policy.
THIS WEBSITE (AND THE INFORMATION CONTAINED HEREIN) DOES NOT CONTAIN OR CONSTITUTE AN OFFER OF SECURITIES FOR SALE, OR SOLICITATION OF AN OFFER TO PURCHASE SECURITIES OR IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) OR FOR THE ACCOUNT OR BENEFIT OF ANY U.S. PERSON AS THAT TERM IS DEFINED IN THE SECURITIES ACT (A "U.S. PERSON"), AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD REQUIRE THE APPROVAL OF LOCAL AUTHORITIES OR OTHERWISE BE UNLAWFUL (THE "OTHER COUNTRIES"). THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR PURSUANT TO THE CORRESPONDING REGULATIONS IN FORCE IN AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR THE “OTHER COUNTRIES” AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE. NO PUBLIC OFFERING OF SUCH SECURITIES IS INTENDED TO BE MADE IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR IN THE “OTHER COUNTRIES.”
In any Member State of the European Economic Area ("EEA"), the information contained in this website is only directed at and may only be communicated to persons who are "qualified investors" ("Qualified Investors") within the meaning of Article 2(e) of Regulation (EU) 2017/1129 (the "Prospectus Regulation").
The information to which this website gives access is directed only at persons (i) who are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (ii) who have professional experience in matters relating to investments falling within Article 19(5) of the Order or (iii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). Any investment or investment activity to which this communication relates is only available to relevant persons and will be engaged in only with relevant persons, or in the EEA, with Qualified Investors. Any person who is not a relevant person, a Qualified Investor or otherwise permitted under applicable law or regulation to access the information, should not act or rely on the information contained herein.
Confirmation of Understanding and Acceptance of Disclaimer
These materials are for informational purposes only and are not directed to, nor are they intended for, access by persons located or resident in the United States, Australia, Canada, Japan or South Africa or any of the Other Countries. I certify that:
I am not resident of, or located in, the United States, Australia, Canada, Japan or South Africa or any of the Other Countries or I am not a U.S. Person; or
If I am a resident of, or located in, the EEA, I am a Qualified Investor within the meaning of Article 2(e) of the Prospectus Regulation; or
If I am a resident of, or located in, the United Kingdom, I am a Qualified Investor and a relevant person.
I have read and understood the disclaimer set out above. I understand that it may affect my rights. I agree to be bound by its terms and I am permitted under applicable law and regulations to proceed to the following parts of this website.
WARNING: the above certification constitutes a "self-certification" pursuant to Decree of the President of the Italian Republic No. 445 of 28 December 2000. False certifications are punishable by law.
You must read the following information before continuing.
The information contained in this segment of the website is not intended for, and must not be accessed or distributed or disseminated to persons resident or physically present in the United Kingdom, Canada, Australia, Japan or any other jurisdiction in which it is unlawful to do so. The information also is not intended for, and must not be accessed or distributed or disseminated to persons resident or physically present in Italy who are not “qualified investors” (investitori qualificati), as defined in Article 2, letter e) of Regulation (EU) 2017/1129 (the “Prospectus Regulation”) pursuant to Article 1, fourth paragraph, letter a) of the Prospectus Regulation as implemented in Italy by Article 35, paragraph 1, letter d) of CONSOB regulation No. 20307 of February 15, 2018.
By clicking the button below labeled “I agree”, you are certifying that (A) if you are in the European Economic Area, you are a “Qualified Investor”; (B) you are not accessing this portion of the website from the United Kingdom, Australia, Canada or Japan; (C) if you are a resident or physically present in Italy, you are a qualified investor as defined under the Prospectus Regulation as implemented in Italy by Article 35, paragraph 1, letter d) of CONSOB regulation No. 20307 of February 15, 2018; and (D) you are not located in a jurisdiction where it is unlawful to access this portion of the website.
You acknowledge that the information and statements contained in the document you are accessing on this website speak only as of the date of such document (or such other date(s) specified therein), and such information and statements may become inaccurate, stale and/or out-of-date thereafter and should not be relied upon for any investment decision.
You acknowledge that the materials on this website that you are accessing are confidential and intended only for you and you agree you will not forward, reproduce, copy, download or publish any of such materials (electronically or otherwise) to any other person if this is not in accordance with the law.
You acknowledge that the access to information and documents contained on this portion of the website may be illegal in certain jurisdictions, and only certain categories of persons may be authorized to access this portion of the website. If you are not authorized to access the information and document contained on this portion of the website or you are not sure that you are permitted to view these materials, you should leave this portion of the website.
You acknowledge that no registration or approval has been obtained and Eni Gas e Luce S.p.A. società benefit and its affiliates assume no responsibility if there is a violation of applicable law and regulation by any person.
By clicking the button below labeled “I agree”, you are confirming that you have read and understood the disclaimer above.
If you cannot so confirm, you must exit this portion of the website
