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Santos unveils new climate strategy

© Supplied by APPEAKevin Gallagher - Santos CEO at the 2021 APPEA conference in Perth, Australia.
Kevin Gallagher - Santos CEO at the 2021 APPEA conference in Perth, Australia.

Santos (ASX:STO) today released its 2022 Climate Change Report which sets out the Australian company’s latest climate transition strategy and action plan to become a net-zero emissions energy and fuels business by 2040.

“It is vitally important that new supply investment happens in a sustainable way. Companies like Santos, which are publicly listed, subject to ESG scrutiny by their investors and which report transparently on carbon emissions and their climate transition plans, are best placed to supply critical fuels such as oil and gas more sustainably, striving for lower emissions intensity and better environmental outcomes. Divesting assets and driving investment in new supply to less transparent producers will not reduce global emissions or advance the transition to Net Zero,” noted Santos chief executive Kevin Gallagher.

The Climate Change Report features the following milestones for Santos’ journey to becoming Net Zero:

* New 2030 targets of a 30% reduction in absolute emissions1, a 40% reduction in emissions intensity 1 and a Scope 3 target to reduce customer emissions by 1.5 million tonnes of CO2e per annum
* A commitment to only selling our products to customers from countries that have a net-zero commitment or that are signatories to the Paris Agreement
* A Climate Transition Action Plan, including phased, value-accretive, Paris-aligned capital investment
* A final investment decision on the Moomba carbon capture and storage (CCS) project which is expected to store 1.7 million tonnes of carbon dioxide per annum, making it one of the world’s biggest CCS projects
* 100 million tonnes of CO2 storage capacity booked in South Australia’s Cooper Basin, one of the first such bookings in the world
* Final investment decisions on new offshore greenfield projects from 2025 will require abatement or offset of reservoir CO2 emissions.

In step with the goals of the Paris Agreement on climate change and aligned with international reporting standards, the 2022 Climate Change Report affirms that Santos is well placed to manage the risks of climate change, continue to drive sustainable shareholder returns from long-life, low-cost natural gas assets and seize the opportunities associated with the global transition to provide cleaner energy and clean fuels over coming decades, said Santos.

Gallagher said Santos is well positioned to decarbonise its natural gas business and generate new revenue streams through carbon solutions such as carbon capture and storage utilising existing infrastructure and depleted natural gas reservoirs, providing a platform to develop clean fuels such as hydrogen as customer demand evolves over time.

“With a strong, low-cost base business supplying natural gas to meet ongoing customer demand and a clear action plan to develop cleaner energy and clean fuels, Santos remains resilient, value accretive and at the leading edge of the energy transition to a low-carbon future,” Gallagher said.

“This year’s Climate Change Report comes as countries around the world are finding that energy and fuel price stability and supply security risks, remain critical considerations on the journey to Net Zero. With natural gas playing a central role in decarbonising energy markets and balancing renewable energy, more investment is needed to ensure supply can keep pace with demand and to diversify supply sources.

“This is a great opportunity for our projects in Australia, Papua New Guinea and Timor-Leste.

“A just transition that focuses on reliability, affordability and decarbonisation is critical to ensuring broad global support for the huge task ahead of us as we reach our net-zero targets.”

Last year Santos announced its intention to provide shareholders with a non-binding advisory vote on the company’s Climate Change Report at the 2022 Annual General Meeting. In this year’s report we set out our Climate Transition Action Plan and seek the support of shareholders for our climate transition approach at our forthcoming Annual General Meeting.

Santos said it will continue to publish an annual Climate Change Report including our progress towards our targets and action plan.

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