Business ingenuity for a low-carbon world

Charlotte Wolff-Bye is Vice-President Sustainability at Statoil

Many look towards Silicon Valley for the next breakthrough in low-carbon energy. There is much excitement around Google’s energy kite and Elon Musk’s pledge to solve southern Australia’s power shortage with solar batteries.

Other solutions are in still in their infancy: solar geo-engineering, or ocean fertilisation to promote algae CO2absorption. For these technologies, unforeseen consequences for our climate system still need to be understood.

Elsewhere, established energy producers are not idle. Statoil is exploring ways to deliver energy from hydrogen using existing oil and gas infrastructure, and expects to invest between 15% and 20% of annual capital expenditure in new energy solutions by 2030.

But can business be trusted to deliver on the climate agenda? I think it is more pertinent to ask whether it is even possible to solve the challenge of climate change without a significant business involvement. In an area where governments can be slow to react, strong business leadership is essential.

In response to calls for greater transparency on corporate climate risk, such as the framework proposed by G20’s Financial Stability Board, the private sector is becoming more open about how climate change will affect business earnings.

These days, major oil and gas companies such as BP, Shell and Statoil are publishing forecasts of how their bottom line will be impacted by stronger government action against climate change. This should go some way towards creating openness and trust.

Right now, engineers are preparing to attach 75-metre-wide blades to towers that will rise 178 metres above sea level on floating structures in UK waters. This Hywind wind park will deliver energy to 20,000 households both from the wind and the swell of the sea – a world first.

At the same time, a 64,000 tonne subsea structure is being shipped to the Aasta Hansen field off the coast of Norway. Once installed 1,300 metres below sea level, it will deliver natural gas to Europe in the most efficient manner ever seen. These are two examples of Statoil projects which illustrate the scale of our plans to transform infrastructure and deliver low-carbon energy to millions.

Statoil’s recent strategy update and ‘2030 climate roadmap’ are further evidence of our conviction to tap into the ‘low-carbon advantage’. The strategy is based on maintaining a low cost base, reducing exposure to high-carbon projects, and making significant investments in renewables, new energy solutions and direct emission reductions in company operations.

By rebalancing its business model, Statoil is preparing for tighter regulation and a greater price on emissions. Statoil’s most recent climate stress test showed that if the world introduces policy measures to meet the 2°C target agreed at the Paris climate change conference, the future value of the company would increase by six per cent by 2030.

Incremental steps won’t solve the exponential problem of climate change. Investors, leading businesses and entrepreneurs see major opportunity in delivering energy, products and services that are fully aligned with the world we all want to live in. All parts of society, from institutions to decision-makers to consumers, need to encourage pioneer companies to use their ingenuity to deliver more energy with less carbon.