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Canada oil producers grapple with Trudeau’s demand for faster emissions cuts

Source: Reuters

WINNIPEG, Manitoba, Oct 22 (Reuters) – Canada’s oil producers face new pressure from Prime Minister Justin Trudeau to reduce emissions in just three years, a sudden acceleration of their plans that at least one major company said looks unrealistic.

Suncor Energy (SU.TO), the second-largest Canadian crude producer, says it remains focused on cutting emissions by 2030, not 2025 as the Canadian government will require.

“Honestly, 2025 is going to be tough,” Martha Hall Findlay, Suncor’s Chief Sustainability Officer, told Reuters. “That’s not a number we’ve used, it’s a number the feds have used.”

Trudeau’s advanced timetable for cuts to the oil sector’s total emissions by 2025, announced last month, comes as the oil sector has focused on longer-term targets, and on reducing emissions on a per-barrel basis.

“That is light speed for an oil sands company. That’s tomorrow,” said Kevin Birn, chief analyst of Canadian oil markets at consultancy IHS Markit, of Trudeau’s demand. “They’re a very hard ship to turn because they have so much emissions.”

Previously, Ottawa had a target of cutting national emissions by at least 40% by 2030, but it did not single out the oil sector. Canada’s crude industry generates some of the highest emissions per barrel worldwide.

Suncor is the only big producer that has laid out a plan – in May – to cut total emissions by 2030, depending heavily on carbon capture, greener power sources and energy efficiency.

But Trudeau’s 2025 demand came as a surprise.

“We had obviously been having conversations with the feds long before the budget came out last spring, long before the (election) campaign,” Hall Findlay said. “None of those discussions have mentioned 2025. At Suncor, we’re laser-focused on 2030.”

Canadian Natural Resources Ltd (CNQ.TO) and Cenovus Energy (CVE.TO), have been planning for months to unveil their emissions targets by year-end.

Cenovus intends to cut emissions on an absolute and per-barrel basis, said spokesman Reg Curren, but he would not say if cuts would occur by 2025.

Canadian Natural is working on “mid-term” targets connected to the Pathways carbon capture project with its peers, said spokesperson Julie Woo. She would not say if they would address Trudeau’s 2025 requirement.

Governments and business would need to spend C$60 billion annually to cut Canada’s emissions by 75% in the next 30 years, RBC Economics said.

Canadian producers are expected to report big quarterly profits in coming weeks as oil and gas prices have soared. The companies have prioritized repaying debt and returning cash to investors, but Trudeau wants producers to spend some profits on curbing emissions.

He plans to unveil his new cabinet on Tuesday, just ahead of the United Nations’ Climate Change Conference in Glasgow, Scotland.

Ottawa wants to ensure there are ambitious emission reductions from the oil and gas sector, making a meaningful contribution to Canada’s climate goals, said Joanna Sivasankaran, spokesperson for the Canadian environment department.

Trudeau’s 2025 goal is “ambitious for sure” and it would be more realistic to expect the sector to cut emissions sharply by a decade later, said Steve MacDonald, CEO of Emissions Reduction Alberta, an arms-length corporation funded by the provincial government.

‘EASIER THAN ANYONE THINKS’

Some small conventional oil producers are already showing deep emissions cuts are possible, however, using methods that big producers Canadian Natural and Cenovus could widely apply. Both companies produce crude in the oil sands and by conventional methods.

Yangarra Resources (YGR.TO), which produces 10,000 barrels of oil equivalent per day, says it will cut total emissions by 47%, or 50,000 tonnes of carbon dioxide equivalent, by the end of 2022. Its plans involve powering 80 pumpjacks with electricity from the Alberta grid, instead of burning natural gas, and replacing older instruments that emit high amounts of methane.

“Cutting carbon in the oil patch is going to be a whole lot easier than anyone thinks,” said Yangarra CEO Jim Evaskevich. “All of the changes we are implementing make incredible economic sense.”

The moves are likely to generate substantial credits next year that Yangarra can sell to bigger emitters, although the monetary value has not yet been determined, Evaskevich said.

Cenovus, which generates 18% of its production from conventional operations, has cut its methane emissions by nearly half from 2015 levels, a spokesperson said. Canadian Natural has cut methane emissions by 28% since 2016, Woo said.

“They’re big, large operations, and they can’t pivot quite as quickly,” MacDonald said. “But that doesn’t mean they aren’t moving forward in the same areas.”

Emissions reductions are difficult for oil sands operations because of the energy they require, while conventional methane emissions are easier to tackle, said Keith Stewart, senior energy strategist at Greenpeace Canada.

Oil sands producers are counting on expanded carbon capture and sequestration facilities to cut emissions. But the economics requiregovernment funding, said Greg McNab, a partner at the Baker McKenzie law firm. Using renewable power to run oil sands facilities may be the quickest way to curb emissions, he said.

Reporting by Rod Nickel in Winnipeg; Editing by David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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Business

Leveraging Technology for Sustainable Logistics and ESG Compliance

by Will Lovatt, General Manager and Vice President, Deposco Europe

A growing number of consumers are demanding packaging that is sustainable and environmentally friendly.. Consultancy, McKinsey, recently launched a survey to explore people’s attitudes to the topic across 11 countries worldwide. In all surveyed countries and across end-use areas, the majority of respondents claim to be willing to pay more for sustainable packaging,

Of course, features and functions remain important, but the sustainability and ESG (Environmental, Social, and Governance) aspects of the logistics process are becoming increasingly significant in consumers’ purchasing decisions.  The entire supply chain, including the sourcing of raw materials, manufacturing processes, packaging, delivery methods, return policies, labour practices, and initiatives for regeneration, is under scrutiny. Today’s informed consumers are making deliberate choices, favouring brands and delivery services that align with their values on these fronts. Therefore, it’s essential for brands to not only maintain high standards of service but also to provide a variety of delivery options. This range should cater to immediate needs as well as offer solutions like batched deliveries at convenient pick-up points, catering to the growing demand for flexibility and sustainability in the shopping experience.

Regulation and risk management

Consumers are undoubtedly a driving force in ESG-focused logistics transformation, but businesses must also meet a growing number of regulations that are driving the need for ESG considerations in the logistics sector. For example, the European Union’s Sustainable Products Action Plan includes several requirements for businesses to provide information about the environmental impact of their products. Now, we expect regulators to be closely monitoring final mile delivery and whether zero emissions vehicles are being utilised, at least within urban areas.

From a risk management standpoint, ESG considerations are critical. Neglecting ESG risks exposes businesses to reputational harm, financial penalties, and legal repercussions. Today’s consumer sentiment is such that unsustainable logistics practices can prompt consumer boycotts or lead to regulatory fines, underlining the importance of ESG compliance in modern logistics operations.

The role of technology in greening logistics

So what can businesses do to mitigate ESG challenges? To address ESG challenges, businesses must transition from traditional paper-based systems to advanced technology solutions. These solutions enhance visibility across the entire supply chain, from production to delivery. Distributed order management systems, for instance, offer real-time insight across extended fulfilment networks, enabling the optimised allocation of consumer orders to the most suitable stock sources, balancing cost and speed. In today’s era of stringent ESG and sustainability standards, it’s crucial for organisations to have comprehensive oversight over the movement of goods and the various stakeholders involved, beyond mere timing. This technological shift is essential for meeting the evolving demands of ESG compliance and sustainable logistics.

Actively tracking the credentials and integrity of every checkpoint in the supply chain is now everyone’s problem. Consumers care deeply about the ethical sourcing of raw materials and the labour practices of third-party logistics firms involved in product sourcing. Technology can allow organisations to map the complete movement of a specific customer order, from acquisition to  final shipment, and then notify that customer directly.

Organisations then need to implement sustainable practices in the warehouse, leveraging technology to optimise operations. This includes using technology to determine the most efficient customer packaging sizes, reducing waste, and guiding staff on consolidating orders to minimise shipments and cut carbon emissions. Additionally, offering consumers options like click-and-collect can align with their existing plans, promoting sustainability rather than just delivery speed. Providing flexible delivery options is increasingly seen as crucial, as the fastest route is typically not the most eco-friendly.

A sustainable future

As data and computer security threats evolve, we’re now transitioning to increased controls around how our products are made, procured, packaged and shipped to the public. For a variety of reasons, from ethical to legal and public sentiment, ESG considerations and controls are becoming increasingly important in logistics and fulfilment.

Alongside this, the trajectory is for more sales to be made via Direct-to-Consumer channels, the desire for more convenient services and customer willingness to hop brands means that businesses  must prioritise sustainable practices. Consumers now expect the ability to customise delivery parameters and choose from transparently-priced options, or they will take their business elsewhere. Brands must manage their order and delivery options effectively to stay competitive.

The key to improving supply chain management lies in adopting sustainable order management and fulfilment technologies. Companies should invest in the latest platforms that support best practices in ESG strategy. These advanced solutions enable compliant processes, cost-efficient operations, increased sales, efficient DTC fulfilment and positive customer experiences.

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Sustainability

Sustainable Workplaces – A Prerequisite for the Future

By Thirumala Arohi, Senior Vice President and Head of Education, Training & Assessments, Infosys

In the last few decades, there is growing awareness about the dangers of climate change caused by the rising levels of greenhouse gases. As a result, enterprises are including sustainability best practices in their operations. Creating workplaces that meet sustainability goals can go a long way in achieving a carbon-neutral future.

Enterprises at large are contributing to workplace sustainability by ensuring eco-friendly campuses and buildings.  But sustainability can be achieved at a much larger scale when every single contributor to a business’s ecosystem makes sustainability practices a way of life.  This shift in the way we approach sustainability can be defined as workplace sustainability. 

The three pillars of workforce sustainability include the organization, the business eco-system, and most importantly, its people.

Organizations use technology to meet their sustainability goals

Most if not all sustainability changes are driven by technology. For example, in Europe, steel and chemical industries are using smart technology to monitor their energy use and use the data to optimize their production processes. Innovative mobility solutions are being developed for cleaner modes of transport. At Infosys, we have switched over to electric buses for our employee transportation.

Summarizing the role of technology in sustainability, Glickman and Kavanaugh in their book,

` Practical Sustainability’ say, with the explosion of new digital technologies such as big data and machine learning, the scope to solve environmental problems becomes much larger. The book recommends a framework that focuses on building a regenerative future and a circular commerce. It recommends employing technology to understand and contextualize the world through data-driven insights and finally to ensure that the sustainability initiatives are focused on elevating the human experience.

Business Eco-System as a Sustainability Driver

Committed enterprises are actively practising sustainability by extending expectations to their eco-system of customers, vendors, and partners. To take Apple’s example again, it commits to be 100 percent carbon neutral for its supply chain and products by 2030.Technology enterprises such as Infosys have outlined sustainability best practices and tailored learning programs on sustainability for vendors and partners.

Workforce Integral to Sustainability

The central force in sustainability practices is people because technology is only a tool in the hands of people, and when the workforce uses it effectively it results in dramatic changes.

To ensure that workforce sustainability is not just a high-level vision, but a practical approach to business processes, the workforce requires to be trained and made aware of the need for sustainability. This is where the learning department plays a crucial role. 

Why Learning & Development is Crucial to Sustainability

Sustainability should be an integral element of all training – whether it is related to technology skills, professional skills, or leadership development. Every leader in the organization must be trained to imbibe the value of practical sustainability in their daily work and people interaction. The learning department can create campaigns and act as a powerful influencer in driving behavioural change in employees to align better to sustainability practices. Leaders can be trained to act as change managers to lead the shift to new sustainability-centric processes and best practices.

People, be it employees, customers, suppliers, or business partners can play an influential role in making a shift from performance to fulfilment. A change from generic learning to personalized learning can go a long way in helping employees understand the various elements of a sustainable organization. Keeping pace with the work from anytime, anywhere model that the pandemic brought about, the function of learning also has moved beyond the physical classroom to anytime, anywhere hybrid learning which is helping reduce carbon emits.

The learning and development teams are investing in technologies and creating smart eco-systems, making sure that the learning offerings are tailored to each role. The training is to enable employees to spot those areas of improvement or change that they can bring in their jobs to align with the broader organizational goal for sustainability.

For example, a well-trained engineer will learn how to optimize and reduce the number of lines of code to reduce power wastage required to run longer processes. Operations teams could learn how to leverage or reuse existing assets rather than build new assets. Designers and developers could create sustainability solutions using AR, VR, and digital twins that reduces the use of scarce physical resources.

The learning and development function can also champion and implement knowledge management practices in an organization. We are doing it at Infosys by identifying internal best-practices and creating micro or nano learnings out of them. Creating a knowledge eco-system can encourage employees to share and learn from colleagues on new ways of being more eco-friendly.

Organizations must provide learning and development not just to employees but all the stakeholders who have a role to play that impacts the environment. At Infosys, we have created the Infosys Wingspan, which is a versatile cloud-based learning solution that helps us provide training to our employees, suppliers, and partners. This helps spread the sustainability best practices among our clients too.

Digital transformation has enabled democratization of technology, where employees have access to IT systems to create new solutions and drive values. Their actions influence the environment. With learning and development, employees can be more aware of their responsibilities towards the organization and the world at large.

In the future, it isn’t the largest or the fastest organizations that will succeed, it will be those who are continuously adapting to change that will be able to thrive and contribute to a sustainable world.

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Business

Is now the perfect time to install a heat pump?

With homeowners increasingly looking for new ways to minimise their energy use and lower utility bills, we spoke with Jordan Brompton, co-founder and CMO of myenergi, to discuss whether or not heat pumps are the answer.

At a time of volatile energy prices and deepened environmental awareness, keeping a close eye on clever ways to maximise energy efficiency has become essential. Domestic solar panels have historically been the go-to energy-saving technology of choice, but in recent years the popularity of heat pumps have soared.

Offering numerous advantages and high availability, both air- and ground-source heat pumps provide a low-carbon alternative to more traditional heating solutions. Across Europe, there are now 19.3 million heat pumps installed,[1] with figures rising 11% year-on-year – driven, in part, by increasing policy support and incentives.[2]

It comes as disappointing reading, therefore, that the UK is falling far behind many of its European neighbours. Around 55,000 heat pumps were sold in the UK in 2022 – that’s fewer installations than 21 other countries in Europe, such as Norway, where two thirds of all homes are fitted with heat pumps.

But while the picture may seem bleak, change is coming. Indeed, in a bid to accelerate heat pump adoption to 600,000 installations per year by 2028[3], the UK government recently increased the grants available for both air- and ground-source heat pumps installations to £7,500[4] – presenting homeowners with the perfect excuse to finally take the plunge.

But what exactly is a heat pump, and how can it contribute to both energy savings and a lower carbon footprint?

A quick guide to heat pumps

Heat pumps are flexible climate-control devices that function as both heating and cooling units, dependent on the ambient temperature. Unlike traditional heating and cooling systems, such as gas boilers or air conditioning, heat pumps have the function of two-way heat transfer, with the ability to direct heat energy between indoor and outdoor environments. This allows for more effective and consistent temperature control with greater energy efficiency than many heating systems.

Heat pumps work by circulating refrigerant through a cycle of evaporation and condensation. On hot summer days, heat is removed from the house and transferred to the outside air, whereas during the cold winter, the little heat available is taken from the chilly air outside (good heat pumps still work in ambient temperatures of around -15°C) and transferred into the home. This cycle makes heat pumps extremely effective at regulating indoor temperatures year-round.

A big advantage of heat pumps is their passive nature, meaning they are much more efficient than their traditional counterparts. The end result is a noticeably cheaper energy bill and around a 20% reduction in CO2 emissions when compared to a gas boiler – a highly attractive solution for domestic temperature control.

But as efficient as modern heat pumps are, they still need electricity to run. This reliance on mains electricity can possibly be seen as counterintuitive when looking to curb carbon emissions, but fortunately there’s a solution.

Eco-smart home solutions are key

As home energy and heating technologies evolve, we’re seeing a growing demand for tech which synchronises devices that generate, store, and use electricity, as well as smart home devices that offer a simple way to make home energy systems greater than the sum of their parts.[EW1] 

Innovative power diverter technologies, such as myenergi’s eddi, are proving hugely popular with homeowners, and the best ones one the market are even compatible with both air- and ground-source heat pumps.

Rather than exporting surplus self-generated electricity back to the grid, a good power diverter redirects energy to a designated heating appliance, such as a heat pump or an immersion heater, to other devices, or into energy storage if heating and cooling are not needed at that time. They can even be configured to send energy to multiple heating appliances in sequence, automatically switching between them to provide the greatest energy efficiency.

While it’s not a necessity for households to utilise solar PV to power their heat pumps, for households with both technologies, a power diverter from a trusted manufacturer is invaluable. When PV is generating low volumes, such as on a cloudy day, the tech can automatically ‘trickle charge’ energy to heat water when their water heater is inactive – offsetting the need for power from the grid. Once panels reach a higher load, power can be diverted directly to the heat pump. With the ability to make intelligent decisions every second, the best power diverters can help homeowners maximise the value of their self-generated renewables.

The future of domestic heating

As we continue to target net zero and cut bills, innovative energy technologies like heat pumps will be crucial. Not only do they reduce greenhouse gas emissions, but they also help slash rising energy costs while delivering year-round temperature control. When integrated with technologies like solar power and eco-smart devices, homeowners can boost efficiency from their self-generated renewables, maximising energy savings while minimising their carbon footprint.


[1] https://www.theecoexperts.co.uk/heat-pumps/top-countries

[2] https://www.iea.org/commentaries/global-heat-pump-sales-continue-double-digit-growth

[3] https://post.parliament.uk/research-briefings/post-pn-0699

[4] https://www.gov.uk/apply-boiler-upgrade-scheme/what-you-can-get


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