High electricity costs and regulatory disparities are impeding progress in reducing reliance on oil and gas, particularly in clean hydrogen production, according to Repsol’s CEO.
High electricity costs and regulatory disparities are impeding progress in reducing reliance on oil and gas, particularly in clean hydrogen production, according to Repsol’s CEO, Josu Jon Imaz.
Speaking at the World Petroleum Congress in Calgary, Imaz emphasized the need for a supportive regulatory framework that incentivizes innovation rather than imposing bans. He also pointed out that carbon capture technology is now cost-effective enough to warrant large-scale implementation in certain regions, though specific locations were not disclosed.
Imaz highlighted the hindrances posed by the high expenses associated with generating hydrogen fuel emissions-free, and cited varying tax and regulatory policies worldwide as further obstacles to development.
He recommended that the European Union adopt a model similar to the U.S. Inflation Reduction Act, which provides government incentives for the advancement of low-emission technologies like carbon capture and clean hydrogen production.
Repsol has embarked on an ambitious plan to expand its renewable energy portfolio, aiming to establish wind, solar, and hydro-power facilities with a combined capacity of 20 gigawatts by 2030. A substantial portion of the $4.8 billion raised from the sale of a 25% stake in its oil business will be allocated towards renewable projects.
During the same panel discussion at the Congress, WestJet CEO Alexis von Hoensbroech addressed the aviation sector’s challenge in eliminating emissions, primarily due to the high costs associated with sustainable aviation fuel (SAF).
Von Hoensbroech pointed out that the aviation industry is likely to be among the last to transition away from hydrocarbons, as SAF production remains limited. While current SAF production relies on feedstocks like oilseed crops, larger-scale production would necessitate a significant increase in electricity availability. Von Hoensbroech expressed optimism that nuclear plants could eventually meet this demand.
The aviation sector currently accounts for 3% of global emissions, underscoring the urgency of finding sustainable solutions for air travel.