Why are decarbonized gases central to our strategy?
ENGIE is convinced that the alliance between the electron and the molecule — meaning gas and electricity — is the most reliable and cost-effective solution to achieve Net Zero Carbon by 2045. It ensures the reliability of the energy system. Indeed, in the short and medium term, an all-electric scenario is not realistic.
For example, if we were to meet consumption peaks in France with only electric solutions, we would need to build the equivalent of 90 additional nuclear reactors and double the size of the electrical grid, which is unrealistic.
Natural gas is a necessary addition to provide affordable energy to the greatest number of people. It is also a transitional energy source with many advantages. It has a lower carbon footprint than oil and coal and it is becoming greener. It is easily storable, offering flexibility to the energy system.
Can we really decarbonize gas?
Significant progress has been made in decarbonizing electricity. Renewable sources are being deployed on a massive scale: last year, the world added 50% more renewable electric capacity than in 2022. In Germany, Spain, and Portugal, these clean energies accounted for more than half of the electricity consumption in 2023. It is unprecedented.
As for gases, the decarbonization process is underway. Our objectives differ depending on the regions we operate in. In Western Europe, our goal is to gradually replace natural gas with renewable gases such as biomethane, synthetic gases, and green hydrogen. Let’s not forget that biomethane emits eight times less CO2 than natural gas when considering the entire supply chain. In other regions in which the Group operates, we are transitioning from coal and oil to natural gas, which has lower CO2 emissions.
What are the benefits of green gases?
Biomethane and synthetic methane have the same characteristics as natural gas, meaning they are compatible with existing gas infrastructure, thereby reducing the necessary investments. Their production is local, which boosts the creation of non-outsourcable jobs, contributes to energy independence and security, and encourages a circular economy by recycling waste.
Moreover, renewable hydrogen, especially in its liquid derivatives (ammonia and methanol), offers major benefits for decarbonizing high-energy-intensity industries such as heavy mobility – freight, maritime, aviation – and a number of industrial sectors.
What is ENGIE's roadmap?
The Group is committed to a carbon neutrality trajectory by 2045, which requires us to accelerate the development of renewable gases. We aim to install a biomethane production capacity of 10 TWh in Europe by 2030 and to market 30 TWh of renewable methane globally each year by that date. We recently made significant acquisitions in the UK and the Netherlands, consolidating our presence in Europe. Our current installed production capacity stands at 1.1 TWh.
In renewable hydrogen, our goal is to produce 4 GW globally through electrolysis by 2035.
What are the Group's competitive advantages?
Since the first installations in 2011, France's biomethane production sector has become the most dynamic in Europe. ENGIE is one of the leaders in biomethane in France, with an annual production capacity of 0.7 TWh. Our local presence, the pre-existing infrastructure, the strength of our commercial activities, and the combination of our expertise in France and internationally are all assets that position us as a key player in the European market. In recent months, we have also announced several commercial successes, including the signing of Biomethane Purchase Agreements (BPAs) with giants Veolia and BASF.
What major challenges still need to be overcome?
Beyond economic aspects related to support mechanisms or technical challenges such as process improvements and the deployment of innovative sectors (pyro-gasification, hydrothermal gasification, methanation), decarbonizing gas involves balancing national energy transition goals with the local concerns of those experiencing it. Residents often have legitimate concerns, such as potential odor pollution. Social acceptability requires on-the-ground dialogue that can convince communities of the benefits of renewable gases.
Regulatory developments are also crucial. In this regard, the decree on Biogas Production Certificates (BPCs), published in mid-July in France, is a very positive signal. This measure requires natural gas suppliers to purchase a certain volume of "green" gas, either by producing it directly or by buying certificates from biomethane producers.
Our growth drivers
ENGIE’s growth in renewable gases is primarily based on an investment program that targets both production and networks. We plan to invest 3 billion euros in biomethane production by 2030 and 2.5 billion euros in connecting injection sites to the grid.
In 2023, we acquired Ixora Energy Ltd, a leader in biomethane production in the UK. We are also forming industrial partnerships on projects like Salamandre (synthetic gas production) with the maritime transport group CMA CGM, and HyPSTER (a large-scale green hydrogen storage demonstrator in a salt cavern) run by a consortium of European companies under Storengy’s leadership.
In addition, ENGIE focuses on research and innovation through its Crigen and Laborelec laboratories and investments in startups, such as Wase and Cryocollect. Finally, the entire Group is transforming to support the transition to decarbonized gases. We are developing training and expertise for our employees in renewable gases, including the upcoming launch in September of the first biomethane-specific training program at the NaturaPôle campus in France.
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