Climate Change in Energy Sector
The European Investment Bank (EIB) releases a report on climate change in energy sector, aiming to analyze the climate change risks and opportunities and strategies to deal with them.
This report on climate change in the energy sector is part of the European Investment Bank’s green transition report, which explores the actions of the European industrial ecosystem in investing in digitalization, coping with supply chain pressures and combating climate change. As the energy ecosystem is central to the greening of the EU economy, the report takes a deep dive into it.
Related Post: World Economic Forum Releases Global Energy Transition Report
Climate Change Challenges in Energy Sector
In order to conduct an in-depth analysis of the relationship between climate change in the energy industry, the European Investment Bank divides the energy industry into two parts, namely Energy-Renewables and energy intensive industries. The renewable energy industry and energy intensive industries are affected by the transition risks of climate change, but in opposite ways – 48% of companies in renewable energy industry see transition risks as development opportunities, and 45% of companies in energy intensive industries see transition risks as real risks.
Physical risks arising from climate change have less impact on the energy sector than transition risks. 20% of renewable energy companies and 14% of energy intensive companies say that physical risks arising from climate change have a significant impact on their business activities, but most companies say that the impact of these physical risks is becoming smaller. 49% of large energy companies and 42% of small energy companies believe that future regulatory policies will move in the direction of more stringent climate change regulations.
Climate Change Strategies in Energy Sector
Common strategies to address climate change include climate change mitigation and climate change adaption. The European Investment Bank finds that the renewable energy sector is more likely to use climate change adaptation solutions, while energy intensive industries are more likely to use climate change mitigation solutions. This may be due to differences in the attitudes of these industries towards the transition risks.
65% of energy companies have set greenhouse gas emission targets, the highest proportion among all industries. Among measures to reduce the use of greenhouse gas emissions, improving energy efficiency, reducing waste and recycling resources account for a high proportion. In terms of climate finance products, 10% of renewable energy companies and 19% of energy intensive companies use climate insurance products.
Climate Investments in Energy Sector
More than 60% of energy companies plan to make climate investments in the next three years to combat the impacts of climate change. Large companies are more proactive in climate investments than smaller companies, but 14% of large renewable energy companies and 17% of large energy intensive companies still do not have a climate investment plan. Both renewable energy companies and energy intensive companies use digital technologies more in climate investments.
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