Our decarbonization journey

Wind turbines on green hills

The steps of our decarbonization process

The industrial transformation that we have initiated aims to decarbonize the entire company, involving all lines of business while ensuring the security and sustainability of energy supplies. Through our decarbonization strategy and by setting medium- to long-term emission and business targets, we are aiming for carbon neutrality by 2050. The process consists of a series of intermediate targets that first envisage net zero emissions (Scope 1+2) from the upstream business by 2030 and from all other lines of business by 2035, then net zero emissions by 2050 of all GHG Scope 1, 2 and 3 emissions both in absolute terms and in terms of intensity. Despite high volatility and uncertainty, in 2023 we confirmed our decarbonization strategy and main medium- to long-term emission and business targets.

The strategy to achieve Net Zero

Eni’s strategy towards Net Zero is supported by an industrial growth and transformation plan that encompasses the whole value chain, including the optimisation and enhancement of the Oil & Gas portfolio through progressive emission reduction, expansion of renewable energy development and the circular economy, and the provision of new energy solutions and services. The plan is supported by cross-cutting activities that seek to optimise existing solutions and develop breakthrough innovations to accelerate the process.

Summary of main decarbonizations target

Business levers

How we will achieve carbon neutrality 

Around 90% of the absolute reduction target in the long term will be achieved by transforming conventional operations. Hydrocarbon production will decrease in the medium to long term, with a plateau expected by 2030 and progressive growth of the gas component, which will reach 60% by 2030 and more than 90% after 2040. At the same time, Eni confirms its decarbonization targets with net zero emissions (Scope 1+2) for the upstream business by 2030 and intermediate reduction targets of 50% by 2024 and 65% by 2025 compared to 2018, based on the levers of energy efficiency, zero routine flaring and methane emission minimisation. Midstream/downstream activities will contribute to reducing emissions mainly through the enhanced use of equity gas and liquefied natural gas (LNG) and the conversion of traditional refineries into bio-refineries. CO₂ capture, utilisation and storage (CCUS) projects will play a complementary role in reducing emissions that are difficult to abate with existing technologies, and only about 5% of the total reduction in supply chain emissions by 2050 will be related to compensation through carbon credits from Natural Climate Solutions and from the use of technological solutions.

Investments in low- and zero-carbon activities

We are committed to aligning plans and investment decisions with the decarbonization strategy. Zero- and low-carbon spending will be 13.8 billion euros in the 2023-26 period: The share of expenditure devoted to Oil & Gas activities will be gradually reduced and the main investment projects will be assessed in line with the targets set for the reduction of emissions and with the commitment to phase out investments in carbon-intensive “unabated” activities or products as a necessary condition to achieve carbon neutrality by 2050.

Capital Allocation

The evolution towards a fully decarbonized product portfolio will be supported by a progressive growth in the share of investments in low and zero-carbon activities, which will reach 30% of total investments in 2026, 70% in 2030 and up to 85% in 2040. After 2035, these activities will generate positive free cash flow and contribute about 75% of the Group’s cash flow on average over the 2040-2050 period.

CAPITAL ALLOCATION

Risks and opportunities related to climate change

The risk and opportunity management process connected with climate change is part of the Integrated Risk Management (IRM) Model, which we developed to support the management in decision-making process by strengthening awareness of the risk profile and related mitigations. We strive in parallel to ensure the integrity of our operations, and to responsibly manage socio-economic and environmental impacts in the countries where we are present. In particular, we have developed guidelines and measures in cooperation with the Fondazione Eni Enrico Mattei (FEEM) and the Istituto Di Management (IDM) in Pisa, which provide methodological support for the identification and implementation of potential adaptation measures in the local areas. 

All data on our sustainability performance

The results we obtain in the areas of sustainability available in the form of graphs and tables.

Natural Climate Solutions and international partnership

Our decarbonization strategy also involves initiatives for the protection, land management and restoration of natural ecosystems. These actions, known as Natural Climate Solutions, specifically offset residual CO2 emissions, i.e. emissions that cannot be abated with current technologies. In addition to combating climate change, the NCSs help protect biodiversity, increase the resilience and adaptability of environmental systems to climate change and boost development in local communities.

Collaborations and partnerships are another key tool for the energy transition process. Our network of alliances with the world of academia, civil society, institutions and businesses aims to offer innovative solutions to facilitate the energy transition.

 

From 2019, Scope 1 and Scope 2 GHG emissions related to operations are subject to reasonable assurance, while Scope 3 emissions and equity-based metrics are subject to limited assurance. The "Statement on Accounting and Reporting of GHG Emissions - Year 2022" and related assurance report are published in the Eni for 2022 Sustainability Performance addendum.

How to aim for net zero emissions along the entire value chain

Eni’s strategy towards Net Zero is supported by a growth and industrial transformation plan involving the entire value chain.

SCOPE 1

Emissions related to company assets.

SCOPE 2

Emissions from the generation of electricity, heat and steam purchased from third parties and used in the company’s assets.

SCOPE 3

Emissions produced along the company value chain, such as those generated by suppliers and customers.

Verifying GHG emissions

We verify GHG emissions through a third-party certifier as part of our Sustainability Report and also through dedicated testing.

Net zero indicators

We have adopted an approach inspired by lifecycle analysis as the most suitable and representative for tracing progress towards carbon neutrality. Our accounting of GHG emissions from value chains refers to a distinctive proprietary methodology that allows us to obtain an integrated view of Scope 1+2+3 GHG emissions related to all energy products sold by Eni. Below is the performance of the main equity indicators:

Net GHG Lifecycle Emissions

The indicator refers to all Scope 1, 2 and Scope 3 emissions associated with energy activities and products sold by Eni, along their value chain and net of offsets mainly from Natural Climate Solutions and  from the application of technological solutions. In 2022, the indicator decreased by about 8% compared to 2021, mainly driven by the decline in upstream production and gas sales in the GGP sector.

Net Carbon Intensity

This indicator is calculated as the ratio between absolute net GHG emissions (Scope 1, 2 and 3) along the value chain of energy products and the amount of energy included in them. In 2022, it was essentially stable compared to 2021 (-0.4%); the trend is influenced by the increase in renewable energy production (+160% vs. 2021), partly offset by the reduction in GGP gas sales.

Net Carbon Footprint Upstream

The indicator considers Scope 1+2 emissions from upstream assets operated by Eni and third parties, net of offsets mainly from Natural Climate Solutions and from the application of technological solutions. In 2022, the indicator decreased by around 10% compared to 2021 in relation to lower emissions connected with lower Upstream production and compensation through carbon credits, which in 2022 amount to 3 MtCO2eq.  The credits are linked to Natural Climate Solutions (NCS) projects to halt deforestation.

Net Carbon Footprint Eni

This indicator considers Scope 1+2 emissions from Eni and third-party operations, net of offsets mainly from Natural Climate Solutions. In 2022, the indicator decreased by around 11% in relation to lower emissions connected with the Upstream and Power businesses and compensation through carbon credits, which in 2022 amount to 3 MtCO2eq. The credits are linked to Natural Climate Solutions (NCS) projects to halt deforestation.

Operated assets

Overall, direct GHG Scope 1 emissions from the assets operated by Eni in 2022 amounted to 39.4 million tonnes of CO2eq, a slight reduction compared to 2021, mainly due to the decrease of emissions in exploration, gas and electricity distribution, and chemicals, partially offset by an increase in gas transport and liquefaction. Indirect GHG Scope 2 Emissions decreased by about 3% in 2022 compared to 2021 due to lower consumption in the chemicals sector with the new Porto Marghera plant configuration. These emissions are related to energy purchases from third parties for the consumption of operated assets. Eni regards these as marginal since electricity generation is mainly through its own installations.

 

Methane emissions

The topic of methane emissions has assumed central importance in the international climate debate in view of its significant climate-changing effect and its recognised role in terms of opportunities to mitigate global warming in the short to medium term. We have confirmed our commitment to keeping the emission intensity of the upstream sector below 0.2%, but a new emission reduction target is planned following the completion, during 2023, of a measurement campaign at operated assets. In addition, we continue to progressively optimise our monitoring and reporting processes for the reduction of methane emissions at the facilities we operate. In 2022, Eni’s methane emissions were 49.6 kton CH4, down from 2022, also thanks to the periodic LDAR (Leak Detection And Repair) campaigns.

Upstream sector and flaring

Concerning upstream sector operated assets, at the end of 2022 the overall reduction of the Scope 1 GHG emission intensity compared to 2014 is around 23%, slightly behind schedule, mainly due to the Covid pandemic and local factors in Libya. Flaring down and CCS projects in Libya are being sanctioned and their impact on the target achievement date will be evaluated. Compared to 2021, the index slightly increased mainly in relation to the exit of Vår Energi from the operated domain. The volumes of hydrocarbons sent for routine flaring decreased by around 9% in 2022 compared to 2021, mainly due to energy efficiency and flaring down activities in Egypt and Nigeria.

Energy efficiency

We are continuing our investment plan both in projects aimed directly at increasing energy efficiency in assets and in development and revamping initiatives with significant effects on the energy performance of our operations. The actions undertaken result in an actual primary energy saving of around 422 ktoe/year compared to baseline consumption, mainly from exploration projects (about 84%), with a benefit in terms of emissions reduction of about 1 million tonnes of CO2 eq. If scope 2 emissions, i.e. emissions from purchased electricity and heat, are also taken into account, the COsavings from energy-saving projects amount to almost 1.1 million tonnes of CO2 eq. In 2022, Eni’s consumption of raw primary sources decreased also in relation to lower production levels compared to 2021. The total energy consumed was 517 million GJ: upstream 226 million GJ, Power 161 million GJ, R&M 60 million GJ and Chemical 55 million GJ.

Verifying GHG emissions

We verify GHG emissions through a third-party certifier as part of our Sustainability Report and also through dedicated testing.

Net zero indicators

We have adopted an approach inspired by lifecycle analysis as the most suitable and representative for tracing progress towards carbon neutrality. Our accounting of GHG emissions from value chains refers to a distinctive proprietary methodology that allows us to obtain an integrated view of Scope 1+2+3 GHG emissions related to all energy products sold by Eni. Below is the performance of the main equity indicators:

Net GHG Lifecycle Emissions

The indicator refers to all Scope 1, 2 and Scope 3 emissions associated with energy activities and products sold by Eni, along their value chain and net of offsets mainly from Natural Climate Solutions and  from the application of technological solutions. In 2022, the indicator decreased by about 8% compared to 2021, mainly driven by the decline in upstream production and gas sales in the GGP sector.

Net Carbon Intensity

This indicator is calculated as the ratio between absolute net GHG emissions (Scope 1, 2 and 3) along the value chain of energy products and the amount of energy included in them. In 2022, it was essentially stable compared to 2021 (-0.4%); the trend is influenced by the increase in renewable energy production (+160% vs. 2021), partly offset by the reduction in GGP gas sales.

Net Carbon Footprint Upstream

The indicator considers Scope 1+2 emissions from upstream assets operated by Eni and third parties, net of offsets mainly from Natural Climate Solutions and from the application of technological solutions. In 2022, the indicator decreased by around 10% compared to 2021 in relation to lower emissions connected with lower Upstream production and compensation through carbon credits, which in 2022 amount to 3 MtCO2eq.  The credits are linked to Natural Climate Solutions (NCS) projects to halt deforestation.

Net Carbon Footprint Eni

This indicator considers Scope 1+2 emissions from Eni and third-party operations, net of offsets mainly from Natural Climate Solutions. In 2022, the indicator decreased by around 11% in relation to lower emissions connected with the Upstream and Power businesses and compensation through carbon credits, which in 2022 amount to 3 MtCO2eq. The credits are linked to Natural Climate Solutions (NCS) projects to halt deforestation.

Operated assets

Overall, direct GHG Scope 1 emissions from the assets operated by Eni in 2022 amounted to 39.4 million tonnes of CO2eq, a slight reduction compared to 2021, mainly due to the decrease of emissions in exploration, gas and electricity distribution, and chemicals, partially offset by an increase in gas transport and liquefaction. Indirect GHG Scope 2 Emissions decreased by about 3% in 2022 compared to 2021 due to lower consumption in the chemicals sector with the new Porto Marghera plant configuration. These emissions are related to energy purchases from third parties for the consumption of operated assets. Eni regards these as marginal since electricity generation is mainly through its own installations.

 

Methane emissions

The topic of methane emissions has assumed central importance in the international climate debate in view of its significant climate-changing effect and its recognised role in terms of opportunities to mitigate global warming in the short to medium term. We have confirmed our commitment to keeping the emission intensity of the upstream sector below 0.2%, but a new emission reduction target is planned following the completion, during 2023, of a measurement campaign at operated assets. In addition, we continue to progressively optimise our monitoring and reporting processes for the reduction of methane emissions at the facilities we operate. In 2022, Eni’s methane emissions were 49.6 kton CH4, down from 2022, also thanks to the periodic LDAR (Leak Detection And Repair) campaigns.

Upstream sector and flaring

Concerning upstream sector operated assets, at the end of 2022 the overall reduction of the Scope 1 GHG emission intensity compared to 2014 is around 23%, slightly behind schedule, mainly due to the Covid pandemic and local factors in Libya. Flaring down and CCS projects in Libya are being sanctioned and their impact on the target achievement date will be evaluated. Compared to 2021, the index slightly increased mainly in relation to the exit of Vår Energi from the operated domain. The volumes of hydrocarbons sent for routine flaring decreased by around 9% in 2022 compared to 2021, mainly due to energy efficiency and flaring down activities in Egypt and Nigeria.

Energy efficiency

We are continuing our investment plan both in projects aimed directly at increasing energy efficiency in assets and in development and revamping initiatives with significant effects on the energy performance of our operations. The actions undertaken result in an actual primary energy saving of around 422 ktoe/year compared to baseline consumption, mainly from exploration projects (about 84%), with a benefit in terms of emissions reduction of about 1 million tonnes of CO2 eq. If scope 2 emissions, i.e. emissions from purchased electricity and heat, are also taken into account, the COsavings from energy-saving projects amount to almost 1.1 million tonnes of CO2 eq. In 2022, Eni’s consumption of raw primary sources decreased also in relation to lower production levels compared to 2021. The total energy consumed was 517 million GJ: upstream 226 million GJ, Power 161 million GJ, R&M 60 million GJ and Chemical 55 million GJ.

Technologies for decarbonization

We use numerous technological solutions to accompany us on the path to Net Zero. We invest in research, applying the principle of technology neutrality: there is no single solution to achieve the energy transition, but rather we need a mix of tools that can be adapted to different contexts. We focus on the development of sustainable energy from sun, wind, sea waves, biofuels, circular chemistry, and capture, storage and use of CO₂ (CCUS). Moreover, we have long-standing and solid partnerships with universities, civil society, institutions and the business sector to foster the decarbonization of the energy system.

 



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