Enel CEO Skeptical About CCS

CEO of the Italian multinational energy company Enel He expressed skepticism about the usefulness of carbon capture and storage, indicating that the technology is not a solution to the climate.

“We’ve tried and tried — and when I say ‘we,’ I mean the electric industry,” Francesco Staras told CNBC’s Karen Tso on Wednesday.

“You can imagine, we’ve been trying really hard in the last 10 years – maybe more than 15 – because if we had a reliable and economically interesting solution why would we go and shut down all these coal plants [when] Can we remove carbon from the system? “

The European Commission, the executive arm of the European Union, has described carbon capture and storage as a group of technologies focused on “capture, transport and storage of carbon dioxide emitted by power plants and industrial plants”.

The idea is to prevent carbon dioxide from entering the atmosphere by storing it in suitable underground geological formations.

The Commission said the use of carbon capture and storage is “important” when it comes to helping reduce greenhouse gas emissions. This view is based on the claim that a large proportion of industry and power generation will continue to depend on fossil fuels in the coming years.

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However, Enel’s Starace seemed skeptical about the potential for carbon sequestration.

“The truth is it doesn’t work and it hasn’t worked for us so far,” he said. “And a general rule here: If the technology hasn’t really picked up in five years — and we’re talking about more than five years, we’re talking about 15, at least — it’s better to leave it.”

There are other climate solutions, Starace said. “Essentially, they stop emitting carbon,” he said.

“I’m not saying it’s not worth trying again but we won’t. Maybe other industries can do more and succeed. For us, that’s not a solution.”

carbon capture technology It is often considered a source of hope in reducing global greenhouse gas emissions, which feature prominently in countries’ climate plans as well as net-zero strategies for some of the world’s largest oil and gas companies.

Proponents of these technologies believe that they can play an important and diverse role in achieving global energy and climate goals.

However, climate researchers, activists, and environmental groups have long argued that carbon capture and storage technologies are prolonging the world’s dependence on fossil fuels and distracting from the much-needed pivot to renewable alternatives.

Plans to increase shareholder profits

Staras’ comments came after Enel published a strategic plan for 2022-24 and set out its goals for the coming years. Among other things, Enel will make direct investments of 170 billion euros ($190.7 billion) by 2030.

Direct investments in renewable energy assets that will be owned by Enel are scheduled to reach 70 billion euros. Consolidated installed renewable energy, or capacity directly owned by Enel, is expected to reach 129 gigawatts by 2030.

In addition, Rome-based Enel said it has brought its net zero commitment — a target on direct and indirect emissions — into 2040, down from previously 2050.

On the fossil fuel front, the group wants to be out of coal generation by 2027, with it out of gas generation by 2040.

Enel also said that between 2021 and 2024, shareholders were expected to receive a fixed dividend per share… set to increase by 13%, to €0.43/share.

During his CNBC interview, Starace was asked about Enel’s expectations of higher dividends and the broader debate about how to invest in so-called “sin stocks” — in this case, the big energy polluters — and still get good returns, especially on the earnings side of things.

“It’s all about the rewards of risk,” he said. “At the end of the day, I see nothing wrong with an increased risk business [being] …is forced to raise dividends if you want to attract investors.”

“What we’re trying to say is that there’s a breaking point, there’s a point where the risk becomes intolerable no matter what profits you want to distribute, and that’s approaching,” he said.

“So in our case, what you need to do is get out of that risk, get out of the carbon footprint and also make sure that when you put the word ‘net’ in front of zero, that ‘net’ isn’t going to become some kind of trick around which you don’t decarbonize, really , of your operations.”

“We say we will be zero carbon, which means we will not release carbon and therefore we will [not] …need to plant trees to offset this carbon. “

However, Starace acknowledged that trees will be required over the coming centuries to remove carbon remaining in the atmosphere due to historical emissions.

— CNBC’s Sam Meredith contributed to this article.

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