Reducing the consumption of fossil fuel: the good practices

The world’s mentality is changing, as well as the production methods. The world pursuit of reducing the consumption of fossil fuels is a tendency that must grow exponentially along the next years, having the carbon footprint as the most important metric for the transformation inside companies of all sectors.

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And why are changes of fuel so necessary? How do companies, including those of the Oil and Gas (O&G) sector, are preparing to invest more in clean energy? And what is the role of Brazil in this scenario?

To answer these questions, we had the assistance of Manuel Luis M. Thompson-Flores, CEO of Green Fuels Venture América Latina Ltda., who gives us more details on this new conscience and how the market has to adapt to the changes. Keep reading!

Why is it so important to reduce the use of fossil fuels?

The beginning of petroleum and other fossil fuels extraction was a revolution for the humankind.  No doubts about it.

However, the exponential growth of the demand for this kind of energy matrix is finally showing its sign of impact on Earth and on the well-being of its inhabitants.

Burning this kind of fuel is one of the biggest causes of carbon (CO2) increase in the atmosphere, one of the causative agent of the greenhouse effect or global warming – when the atmosphere prevents the dissipation of sun heat back to space.

A lot has been debated about this mater, with warm discussions and finger-pointing, but, fortunately, the energy industry and its service providers are understanding the necessity of investing in clean energy for their own sustainability.

It is a pursuit of sustainable fuels and development of energy matrixes that reduce the volume of CO2 released to the atmosphere and, consequently, avoid elevating the planet temperature and cause more aggressive and destructive climatic events.

It is not a question of reducing production or refraining from investments in growth. It is the necessity of survival of the market itself and the economy in general. Adopting now the exploitation and trading of sustainable energy is a guarantee that there will be consumption and new opportunities in future.

How are companies dealing with this matter?

The need for carbon emissions reduction does not mean that companies of the fossil fuel and related products segment will simply disappear from the market.

On the contrary, these are the organizations capable of leading a change from the inside out, by restructuring their own activities and keeping focus on sustainability – which is, by the way, one of the O&G market tendencies, accelerating the process of diversification of energy matrixes.

It is exactly this sector, vital for the energy transformation for the humankind, that Manuel Luís refers to when he comments that “historically, these companies have responded to the demand for energy from the consumers and from the industry, and they are not the only ones to blame now for having attended our consumption demands”.

We all share part of the guilt. The question is: now that we know that climatic change is real and society needs to reduce carbon emissions, what are these companies doing about it?

Manuel’s view is essentially positive in this regard. The proposal that reflects the actions and investments made presently is a programmed transition to clean energy so as to fight the greenhouse effect and mitigate the impacts that it may cause to the already consolidated business, integrated production and supply chains, etc., offering new opportunities for sustainable development and job creation.

After all, organizations of this sector are the ones in the best position to accelerate the changes. They are specialists in extraction, preparation and distribution of the fuel that moves the world. They are professionals that have the necessary knowledge and can apply their knowhow in innovative methods for the generation of sustainable energy. This process has already started and is speeding up.

Therefore, with good public policies and the market perception moving towards the importance of carbon emissions reduction, stakeholders such shareholders, directors and the public themselves are naturally beginning to demand changes that are directing towards this revolution.

What is carbono footprint?

Before the necessity of reducing carbon emissions, companies are endeavoring to demonstrate more concern about the future of the society, not only because of the corporate responsibility, but also for envisaging the benefits in reputation management (and, more and more, creation of shareholder value), maintenance of market share and financial return.

This is not a problem. On the contrary, it incentivizes other companies to invest in clean energy to maintain their market share. And carbon footprints is the most utilized metric to define these targets and make a simpler and more efficient communication with the public.

Carbon footprint, an expression from the English language, is the name given to the method of calculating CO2 gas emissions into the atmosphere directly or indirectly resulting from the operations of an organization.

In other words, the metric does not take into account only the energy and the pollutants generated by the companies, but also those emissions resulted from the production of the raw material that they use and, consequently, the application of their services and products.

Carbon footprint is usually seen as a remainder. The business focus has been to reduce emissions, search for suppliers that do the same and take actions to compensate the carbon emitted up to the point of leaving no footprint at all.

What are the measures that companies are taking to reduce the consumption of fossil fuels?

With the demand for more fair and sustainable processes, we can see that many companies are testing forms to comply with the recent demands of the market. Concomitantly, they must be careful not to fall into the so-called greenwashing practice, i.e., a manipulation of the sustainable performance that does not actually reflects the real changes to reduce carbon emissions.

The following examples show what companies in all sectors are doing to boost this new paradigm.

BPBunge Bioenergy

The joint venture between BP and Bunge, and BP Bunge Bioenergy, just created to support the growing Brazilian demand for low-carbon bioenergy, evidences well the transformation in course in industry.

The JV will enable the potentiation of best shared practices aiming to advance in efficiency and sustainability, maximizing the use of technology and identifying opportunities to develop future capabilities in this crucial energy market, as well as attending the growing demand for bio fuels and bio electricity.

Vale

Vale has recently launched a program named Neutral Carbon. With a programmed investment of US$ 2 billion – the biggest in the mining sector so far – the plan is to reduce carbon emissions in 1/3 by 2030, and reach zero CO2 footprint in 2050.

Unilever

Unilever uses materials derived from fossil fuels in their products. The company’s intention is to invest Euros 1 billion to globally replace 100% of these materials.

Microsoft

As a cutting-edge in technology, Microsoft is an exemplary case – since this area is one of the biggest responsible for CO2 emissions.

Microsoft has a bold plan. The company intends to not only reach zero carbon-print, but become carbon-negative by 2030. Their plan is to remove all the carbon emitted since its foundation in 1975.

Shell

One of the largest in the O&G sector, the company expects to reach zero carbon-print by 2050. Their plan is to invest more in renewable energy, while developing new processes, techniques and tools to mitigate emissions along the production chain. It is an effort that being followed by several similar companies.

What is Brazil’s position in this scenario?

Brazil is in a privileged position in this new energetic era, so that companies are already investing in the development of new matrixes.

After all, we have an incredible potential for exploiting sustainable resources. “We believe that the country will follow this path, with biomass derivatives (and, therefore, carbon free) and drop-in fuels, such as biodiesel, HVO, Green Diesel and bio-kerosene (that do not require expensive and long modifications in the propulsion systems and delivery infrastructure), taking advantage if its resources and agricultural leadership”, says Manuel.

The CEO of Green Fuels Ventures gives further examples of projects that are already in course in Zona da Mata region in Minas Gerais State and in the savannahs (“Cerrado”). The plan is to recover degraded areas focusing on the exploitation of raw-material for sustainable fuel.

In spite of the existing resistance and/or bureaucracy regarding the subject, the truth is that the pressure from the market and from investors is boosting this change.

With the awareness of the population who demands this energy, and with the modernization of companies that search for energetic matrixes, the efforts to reduce the consumption of fossil fuels are here to stay.

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