Evaluate and mitigate our GHG emissions
As part of its progress towards a lower carbon energy system, the Company aims to ensure the resilience of its portfolio by being involved on the development of projects to reduce the carbon intensity of its activities and progressively reduce emissions from its energy supply operations, whilst increasing the integration of renewable energies.
Galp's upstream projects have a carbon intensity close to 50% lower than the industry average (based on the comparison with data provided by the International Association of Oil&Gas Producers), and the company continues focused on ensuring the resiliency and high efficiency of its future developments.
On the downstream industrial side, Galp has been progressively reducing its activities’ carbon footprint, and continues to be actively involved on the development of initiatives that will allow to further reduce the emissions and increase the production of lower carbon products. A clear example of that are the large scale projects currently being built in Sines, our key industrial site, including the first 100 MW electrolysers for renewable hydrogen production and an advanced biofuels unit, capable of producing low carbon fuels for road, aviation and maritime transport. Additionally, investments in operational energy efficiency and electrification are planned to take place at Sines.
In addition, Galp has been developing a significant renewable power generation capacity, which integration is key to support the development of other lower carbon business across the group. In fact, Galp is already one of the main solar PV producers in Iberia and the integration of renewable energy generation is larger than its European peers (renewable energy to hydrocarbon production ratio is over four times superior to the average of its peers).
Methane
The Company’s methane emissions have a relatively low weight in its operational emissions (<1% of total scope 1 and 2 emissions in 2023) and are mostly associated with non-routine flaring in non-operated upstream assets.
Notwithstanding this, Galp aims to reduce methane emissions from its operated assets, which represent 23% of its overall methane emissions, in line with industry expectations.
Lastly, all the upstream operators of Galp’s upstream production are signatories to the OGCI Methane Reduction Initiative and the Oil and Gas Methane Partnership (OGMP) 2.0.
Acting on methane emissions
The Sines refinery is the asset operated by Galp where methane emissions are most relevant. As such, several measures have been put in place to mitigate these emissions over the years. The refinery has installed a flare recovery unit in one of its flares to reduce flaring and associated methane emissions, as well as a vapour recovery unit to minimise the emissions of diffuse volatile organic compounds (VOC) including methane from loading and unloading hydrocarbons.Fugitive and diffuse emissions are also monitored and addressed by its annual LDAR (Leak Detection and Repair) Program. The refinery is developing a VOC management plan for the integrated management of all fugitive and diffuse emission reduction and monitoring initiatives of to further minimise operating VOC emissions.
Galp’s Carbon Footprint
Each year, Galp’s carbon footprint (operational control) is compiled, based on internationally recognised methodologies and recommendations, and is monitored and verified by a third party. Galp monitors the carbon footprint of its activity and value chain, including not only direct emissions from our operations (scope 1), but also the indirect emissions from the electricity we have acquired (scope 2) and our value chain activities (scope 3).
In 2021 Galp revised its carbon footprint boundaries to better align it with the industry best practices and improve transparency. From then onwards, the emissions from non-operated Upstream assets were included in the scope 1 and 2 emissions calculation (previously accounted in Scope 3 – Category 15 – Investments) to align with financial consolidation perimeter. The calculation of the Scope 3 – Category 11: Use of sold product emissions is now aligned with IPIECA’s throughput method, meaning that emissions from all refinery output are being considered in the calculation of this category. The calculation of Scope 3 – Category 10: Processing of sold products was also changed to reflect the processing of sold crude in third party refineries.
In 2023, Galp began defining a methodology to calculate and disclose the carbon footprint of its Renewables and New Businesses operations. The aim was to align the reporting of this business unit with that of the remaining businesses and continue to improve our emissions-related disclosure by extending it to the least carbon intensive part of our activities.
We are committed to continuous improvement. The company will update its emissions calculation methodology and disclosure whenever new reporting related regulation, recommendations and enhanced data collection capabilities become available.
2023 performance
During 2023, the Sines refinery was able to resume its normal energy consumption profile, and registered planned shutdowns to perform recurrent unit turnarounds, which led to a significant reduction of its operating emissions.
The commissioning of the Coral South FLNG concluded during the second half of 2023, and the asset is now operating in plateau conditions.
Overall, Galp’s operating Scope 1+2 emissions were 13% lower than in the previous year and 30% lower in relation to the 2017 baseline.
t CO₂e - tonnes of carbon dioxide equivalent.
Methodological notes: Galp's carbon footprint is calculated on an annual basis and is based on methodological framework established by The Greenhouse Gas Protocol – Corporate Accounting and Reporting Standard, supplemented by the relevant industry adaptation promoted by the International Petroleum Industry Environmental Conservation Association (IPIECA) – Compendium of Greenhouse Gas Emissions Methodologies for the Oil and Gas Industries.
Assumptions: 1) The Global Warming Potential (GWP) for 100-year time horizon were considered. Source: IPCC Fourth Assessment Report (AR4). 2) Includes total emissions of Flaring Gas (Routine and Non-Routine).
Other emissions related metrics
Besides calculating its carbon footprint according to standard recommendations on an operational control basis, Galp also discloses its operational scope 1 and 2 emissions on an equity basis and its total net scope 3 emissions. The latter reflects the scope 3 emissions that would take place assuming a total integration of the company’s energy value chains. This is believed to be more representative of the efficiency of its operations.
Note: Scope 3 emissions are value chain emissions over which Galp has limited direct control and which are therefore complex to manage. Furthermore, the current methodologies for calculating these emissions include diverse approaches making any direct comparison between companies challenging.
1 Net scope 3 emissions correspond to an estimate of life cycle emissions for the different value chains represented in Galp’s sales of energy products, where its own energy production is integrated and netted, and third party purchases are assumed to be the difference between energy sales/inputs and production. Upstream value chain Scope 3 emissions are calculated for the resulting volumes of third party purchases, and use of sold product emissions are calculated for the point in the value chain where the largest volume of product is sold.
Moving towards low carbon solutions
Avoided emissions
Galp estimates the impact of several of its low carbon solutions by publishing a yearly estimate of the emissions avoided by their implementation. This estimate is calculated based on a reference scenario where these solutions and products would not have been implemented during the year they were sold or executed. In 2023, Galp avoided the emission of approximately 1,500 ktonCO2e through the integration and sales of biofuels for transportation purposes, the delivery of electricity for electric mobility, the production and sale of renewable electricity and the supply of decentralised energy production and energy efficiency services.
Tackling emissions in our businesses
Upstream
Galp’s Upstream portfolio is characterized by its high efficiency and low carbon intensity. At c.9 kgCO2e/boe1, it is close to half of the industry’s average of c. 18 kgCO2e/boe (IOGP average of 2022). This reflects the commitment to sustainability and energy efficiency in project design and operations. Our journey starts in project evaluation, where we aim to fully incorporate the amount of carbon dioxide in the field into our investment decisions, focusing on developing assets with lower carbon intensity.
- Newer projects, such as the Bacalhau field development, located in the Brazilian Santos basin, are characterized by low field lifetime emissions. The Bacalhau FPSO, currently in construction and forecast to come online by 2025, will feature a combined cycle gas turbine system to increase the efficiency of the power system and reduce associated emissions. Combined with an optimised gas system, this will allow greater energy efficiency within this asset and reductions in emissions from power generation and non-routine flaring. The result will be a world class lifetime emission intensity of c.9 kg CO2e/boe.
- The Company maintains a focus on the continuous improvement of the efficiency of its non-operated assets in production. It works with operators on identifying and implementing further emission reduction initiatives, such as improving fugitive emissions inventories (including methane), commissioning flare gas recovery systems and also identifying other initiatives that can lead to higher energy efficiency and lower emissions.
As per Galp’s environmental sustainability practices, we are committed to follow the World Bank's Zero Routine Flaring by 2030 initiatives in the assets we operate and work with our operating partners in the projects we participate in. This aims to end routine flaring hydrocarbon production projects, which contribute significantly to greenhouse gas emissions. Currently, all the upstream projects that Galp is involved in operate without routine flaring.
1 Galp's upstream carbon intensity follows the IOGP recommendations, which includes emissions from energy usage and flaring and excludes emissions from processes considered as midstream in the Coral FLNG.
Industrial & Midstream
- Efficiency and emission reductions at Sines
In 2023, the Sines Refinery continued to focus on improving the efficiency and integrity of its operations. During the planned turnaround, several energy efficiency projects were implemented. These included the conclusion of the replacement and upgrade of the FCC’s recovery boiler, and of several exchangers - which were replaced by more advanced technology with higher thermal transfer - and of reactors in the platforming unit. These projects are expected to reduce emissions by c.70 kton CO2e/year when fully online.
Throughout the year, further energy efficiency investments were identified and approved. These are scheduled for implementation between 2024-2025 and include pre-flash gas re-routing and electrification projects targeting an associated emissions reduction of c.40 kton CO2e.
Furthermore, in 2023 a site-wide energy assessment was carried out to evaluate and identify additional opportunities to improve energy efficiency to complement the refinery’s decarbonisation roadmap.
Progress in the digitalisation of the operations was also made, with the ELLA (Energy Lean & Live Advisor) tool supporting the management of utilities allowing for more versatility, efficiency and robustness in their usage.
In 2023, Galp continued to grow its HVO production by co-processing at the Sines Refinery, with an output of 108 kton. This is in addition to the c. 25 kton of second-generation FAME biodiesel produced at Enerfuel.
During the year c.362,000 m3 of biofuels were integrated into diesel (biodiesel and HVO) and gasoline (bioethanol) sold by the Company in Iberia. This includes the c. 25 kton of second-generation FAME biodiesel produced by Enerfuel. It translates into a reduction of approximately 1,000 ktons of carbon dioxide emissions over the product's lifetime, compared to its fossil fuel equivalent.
Investing in Sines’ low carbon initiatives
The company is actively increasing the amount of renewable energy used in its operations and pursuing the development of low-carbon renewable fuels to power all forms of transportation. In 2023, Galp took an FID on its first large scale 100MW electrolyser for green hydrogen production. This large-scale project will allow the replacement of c.20% of the existing natural gas-based hydrogen production in the Sines refinery and may lead to a scope 1 and 2 greenhouse gas emissions reduction of c.110 ktpa. Galp also sanctioned investment in a 270 ktpa capacity HVO unit capable of producing biodiesel and SAFs, in partnership with Mitsui. The unit will use waste residues to produce renewable diesel (HVO) and Sustainable Aviation Fuel (SAF). This will allow the potential to avoid c.800 ktpa of greenhouse gas emissions (scope 3, CO2e), when compared to its fossil fuel alternatives. These projects will enable the Sines refinery to scale-up its low carbon fuel production and provide sustainable alternatives for all modes of transport.
In late 2022, Galp signed an agreement with NextDecade to purchase 1 mtpa LNG to be from its Rio Grande LNG project, in Texas for 20 years, starting from 2027. The facility is currently under construction and will include Carbon Capture and Storage solutions, capable of substantially reducing the life cycle emissions of LNG. This gives Galp the option of purchasing LNG volumes whose liquefaction emissions have been captured.
- Carbon Capture Storage & Utilisation
Although it is difficult, at this stage, to predict which technology or end-use the Company will prioritise, Galp is exploring a range of long-term pathways and options to mitigate, reduce and utilise CO2 beyond 2030. To this end, it is investigating storage options or ways to directly use CO2 in industries such as food and synthetic fuel production, particularly when paired with green hydrogen.
Commercial
Galp pioneered the supply of low-carbon fuels in Portugal in 2022 by providing SAF for aviation and HVO for maritime transport. In 2023, Galp took another important step towards the overall carbon footprint reduction associated with heavy road transport by commercialising a renewable diesel product, produced from residual feedstocks.
Galp also expanded its offer of bio-based products to lubricants with the Galp Bio Lubricants line, a suite of biodegradable, vegetable oil-based lubricants complying with a large spectrum of specifications, including Ecolabel. The advantages of biobased lubricants include high biodegradability, superior lubricity, good thermal properties, base stock renewability and an environmentally friendly nature.
Galp Electric continued the accelerated growth of its public and private charging points network. These totalled more than 4,800 charging stations in Portugal and Spain, c. 25% of which are fast and ultra-fast charging stations. Sales of electricity for mobility increased to a total of 17 GWh and correspond to c. 13 ktons of avoided CO2 emissions compared to the same energy used on an ICE (internal combustion engine) vehicle, on a life-cycle basis.
EV powering at IKEA in Portugal
Galp partnered with IKEA to install c.280 charging points at IKEA stores around Portugal. This new infrastructure guarantees that 210 vehicles can charge a range of 100 kilometres simultaneously per hour in IKEA car parks. The Company continued to forge important collaborations that allow it to expand its public charging network and enable a reduction of emissions from partners.
- Galp decentralised solar solutions
Galp provides decentralised solar power production and storage solutions to B2B and B2C customers, in the residential, commercial, and industrial sectors using advanced technology to provide fit for purpose solutions and optimal results. In 2023, the Company added more than 6,000 installations in Portugal and Spain, surpassing a total of 10,000 installations in Iberia, with a total of c. 20 MW of solar panels. It also installed more than 700 batteries in its installations. This helps customers to improve self-sufficiency by combining power generation and storage as well as delivering extra yearly savings. The total electricity production from the c. 50 MW of equipment installed since 2020 is estimated to be c. 55.9 GWh and is thought to have avoided c. 5 kton CO2e during 2023, in comparison to the same amount of electricity purchased from the grid.
Galp’s innovative Software as a Service (SaaS) platform for managing ICE and EV fleets, charging infrastructure and their users continued growing. By 2023 it counted more than 2,700 vehicles and helped customers reduce costs while simultaneously avoiding c.1.5 kton CO2e emissions in comparison to normal, non-optimised operating conditions.
Renewables and New Businesses
Renewable electricity is a key driver of Galp's low-carbon energy growth.
In 2023, the Galp generated c.2.3 TWh of renewable electricity and started its first solar PV park in Portugal, at Alcoutim, increasing its overall installed capacity in Iberia to 1.4 GWp and reinforcing its position as one the largest solar PV producers in that region. The renewables energy produced in the period translates into c. 270 ktCO2e of avoided emissions compared to the production of an equivalent amount of electricity in the location where it was generated.
The Aurora JV (joint venture with Northvolt) is advancing towards the development of one of the largest lithium conversion plants in Europe, in alignment with EU's ambitions to develop a sustainable batteries value chain. The final investment decision on the project is yet to be made.
Although the production of lithium hydroxide may lead to a small increase in Galp’s operating emissions, this material will be critical for battery manufacturing. It has the capacity to produce c. 50 GWh of batteries per year (sufficient for c. 700,000 electric vehicles). This would contribute significantly to reducing emissions in the transport sector. To ensure that the impact of this activity is mitigated, the JV is strongly focused on guaranteeing the sustainability of its activity and is defining roadmaps towards emission reductions from its operations and the life cycle of its products.
Corporate centre
Galp’s new office in the Allo building is currently pursuing LEED and WELL Platinum certifications. The new office reflects the Company’s commitment to sustainable energy and practices as it is designed to address the challenges of hybrid work while prioritising user comfort. The offices feature sustainable energy initiatives and resource management practices such as efficient lighting and equipment, on-site renewable electricity generation, electric vehicle charging, water efficient equipment, waste management, etc.
The new building will also help to enable the full electrification of our light duty vehicle fleet, aimed for 2028, and actively promotes other forms of sustainable mobility. It includes:
- more than 130 electric and hybrid vehicle charging points to serve the Company’s fleet which now includes 27% fully electric and hybrid vehicles.
- more than 70 racks with dedicated chargers for parking and charging of light electric vehicles such as electric scooters and bicycles.