Australian integrated energy company Origin Energy released its first Climate Transition Action Plan on Friday 26th August, but gives no indication of letting go of its gas generation and upstream assets.
Origin (ASX:ORG) announces a new ambition of reaching net zero in Scope 1, 2 and 3 emissions by 2050.
Scenario analysis is consistent with a 1.5°C pathway but the anomaly is the preservation of its gas business.
It moves its targets up from 2°C to 1.5°C but will still need to get these targets validated by the SBTi (Science-based Targets Initiative.)
Divestment from coal
Earlier this year the company announced that it would move away from coal-fired generation by closing its Eraring power station by August 2025 at the earliest. Instead on the site it is planning a 700 MW battery plant alongside 1,600 MW of renewable development projects.
Retention of gas
It does not wish to divest its gas assets though, saying that gas performs a crucial bridging function. In addition, it remains open to developing new gas fields like the Beetaloo Basin. Potential future emissions from the development of any new gas fields are excluded from the medium-term targets although it says “any development would only occur where it was consistent with Origin’s net zero emissions by 2050 ambition.”
Reductions in emissions intensity
Within its new emissions reduction targets are medium-term emissions intensity targets, guided by the SBTi’s Sectoral Decarbonisation Approach. It is targeting a 40% reduction in Scope 1, 2 and 3 equity emissions intensity by 2030 from an FY2019 baseline, which includes emissions from its operated and non-operated activities, and from customers’ consumption of its products.
Australia Pacific LNG on growth course
Origin believes gas will remain a key part of Australia’s, and the world’s, energy mix for many years to come. Its business embraces that. It is a shareholder of Australia Pacific LNG with a 27.5% share. Long-term contracts with Australia Pacific LNG require increased operating infrastructure including increases in the number of wells online, the number of workovers performed and the network of gathering pipelines.