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Repsol (REPYY) Lays Out Enhanced Renewable Energy Targets

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Repsol SA (REPYY - Free Report)  announced ambitious carbon-reduction targets, which will accelerate its clean-energy transition toward a net-zero emission future.

Due to mounting pressure from investors to reduce emissions, energy companies have established various targets to increase renewable capacity and improve energy efficiency. Repsol was one of the early movers in this regard and possibly the first energy company to announce its non-binding plan to achieve carbon neutrality by 2050. The Spanish firm has now set targets to accelerate its transformation plan.

Repsol boosted its 2030 renewable energy target by 60%. The company previously aimed for a 5.2 gigawatt (GW) of renewables by 2025 and 12.7GW by 2030.  It currently plans to reach an installed capacity of 20 GW by 2030 and a target of 6 GW by 2025.

The company will invest an additional €1 billion for low-carbon projects between 2021 and 2025 compared with its previously planned €5.5 billion. This will lead to the total spending of up to €19.3 billion. Thus, low-carbon investments will comprise 35% of the company’s total spending for the 2021-2025 period. The additional investment will also support Repsol’s production of renewable hydrogen and other low-carbon initiatives.

The new targets are expected to help Repsol reach its planned emission reduction faster. The company announced its first-ever absolute emission-reduction target, with an aim to reduce operational emissions by 55% by 2030. Beside this, Repsol aims to reduce net emissions by 30% from all products, including those used by customers.

As part of its low-carbon strategy, Repsol is also focusing on biofuels and synthetic fuels, which are made from hydrogen as well as carbon sinks through forestation, and carbon capture and storage. Carbon capture and storage will play a key role in the development of the low-carbon projects. Notably, the company aims to produce two million tons of low-carbon fuels by 2030.

The boost in Repsol’s renewable targets reflects the significant progress it is making toward carbon-neutrality. The advances in technology and project execution are enabling the company to upgrade its carbon intensity reduction targets.

The latest decarbonization pathway to reach carbon neutrality in 2050 establishes a reduction of the Carbon Intensity Indicator of 15% in 2025, 28% in 2030 and 55% in 2040 compared with the previous 12%, 25% and 50%, respectively.

Company Profile & Price Performance

Headquartered in Madrid, Spain, Repsol is an integrated energy company, which advocates energy transition.

Shares of the company have outperformed the industry in the past three months. The stock has gained 15.1% compared with the industry’s 8% growth.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Zacks Rank & Other Stocks to Consider

The company currently flaunts a Zack Rank #1 (Strong Buy).

Some other top-ranked players in the energy space are Schlumberger Limited (SLB - Free Report) , MPLX LP (MPLX - Free Report) and Cheniere Energy, Inc. (LNG - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Schlumberger’s earnings for 2021 are expected to increase 45.4% year over year.

MPLX’s earnings for 2021 are expected to rise 9.6% year over year.

Cheniere’s earnings for 2021 are expected to surge 119.7% year over year.


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MPLX LP (MPLX) - free report >>

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