Thu. Dec 12th, 2019

Repsol will be a company with zero emissions in 2050 and depreciates 4.8 billion of its assets due to the new scenario of oil and gas prices


The company assumes a new scenario of oil and gas prices consistent with the climate objectives of the Paris Agreement. Its application entails a correction of the book value of some Group assets, with an impact of about 4.8 billion euros

The Repsol Board of Directors has analyzed the company's role in the fight against climate change and has made progress in its commitment to lead the energy transition, in line with the objectives of the Paris Summit and the United Nations Sustainable Development . In this sense, Repsol will guide its strategy to be a company with zero net emissions in 2050, which makes it the first of its sector to set this ambitious goal, which aims to limit global warming below two degrees centigrade with respect to preindustrial levels. To achieve this objective, Repsol sets new targets for reducing its carbon intensity indicator on the basis of 2016: from 10% in 2025, 20% in 2030 and 40% in 2040, to move towards zero net emissions of CO2 in the year 2050. With the technological advances that are foreseeable today, Repsol anticipates that at least 70% reduction in net emissions can be achieved for that year and the company is committed to applying the best technologies to raise this figure, including the CO2 capture, use and storage. Additionally, if this is not enough, Repsol will offset emissions through reforestation and other natural climate solutions to achieve zero net emissions in 2050. These objectives will serve as the basis for the 2021-2025 Strategic Plan, which will be presented to the market and to investors in the first half of 2020. In line with this new strategic orientation and in a context defined by new dynamics of the oil and gas markets and public policies aimed at decarbonising the economy, Repsol has reviewed the main hypotheses for the evaluation of its investments, assuming a scenario compatible with the climate objectives of the Paris Agreement and the United Nations. As a result of the application of this new scenario, Repsol expects that, in the financial statements of 2019, the book value of some assets will be adjusted, with an estimated impact of about 4.8 billion euros after taxes. This accounting adjustment will reduce the specific results of 2019, but will not have an effect on cash generation nor will it affect the announced proposal to increase shareholder remuneration.

In this context, the company assumes a new scenario of oil and gas prices consistent with the climate objectives of the Paris Agreement. Its application entails a correction of the book value of some of the Group's assets, with an impact of about 4.8 billion euros after taxes, which will reduce the specific result of 2019, but will not affect the cash generation or the remuneration to the shareholders, which is among the most attractive of the Spanish stock market and its sector in the world. • In the Upstream area, the generation of value and cash will be prioritized over the increase in production. In industrial operations, the current leading position in refining profitability will be maintained and more demanding decarbonization objectives will be added, together with an increase in the production of biofuels and low carbon footprint chemicals. In the new businesses, a more ambitious goal of low carbon power generation is assumed by 2025. • This new and more demanding scenario will serve as the basis for the 2021-2025 Strategic Plan, which will be presented to the market and investors in the first half of the year. 2020

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