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Climate action
Apr 30, 2020

During the last decade, Greenhouse Gas (GHG) emissions increased at an annual rate of 1.5%. Although the economic slowdown generated by the pandemic reduced GHG emissions for the first half of 2020 by approximately 17% as compared to 2019, this decrease was temporary and did not significantly reduce the historical accumulated concentration of CO2 in the atmosphere. In this context, Ecopetrol maintains its commitment to reduce its carbon footprint: Thus, we have joined efforts to limit the increase in global temperature below 1.5° C, supporting our actions in the Climate Change Strategy, which recognizes the importance to reduce carbon emissions in the operations and in the company’s value chain in line with the established goals, the vulnerability of the operation to variability and climate change, and adequately managing risks and identifying opportunities in relation to this thematic. The Climate Change Strategy is aligned with the company’s environmental strategy and the policies and plans of the national government, and has 4 strategic lines and 11 action lines.
 

Ecopetrol’s climate change strategy

AXIS

ACTION LINES      

Mitigation

  • Greenhouse Gas Inventory (GHG).
  • Reduction of GHG emissions from the Company’s operations.
  • Compensation of GHG emissions through the development of projects in Natural Climate Solutions.
  • Promotion of the reduction of GHG emissions in the supply chain.
  • Participation in carbon markets.

Vulnerability and adaptation

  • Identification of the vulnerability.
  • Adaptation plan and implementation of adaptation measures.

Technology and research

  • Analysis and evaluation of technologies and technological practices.
  • International technology alliances.
  • Research and technological development.

Participation in the construction of public policy documents

  • Participation in the construction of policy documents at the national level.

Source: Ecopetrol, Vice Presidency of HSE

 

Mitigation Line

This strategic line seeks to reduce GHG emissions from the oil and gas value chain, in accordance with the business objectives of growth and sustainable development.

Ecopetrol committed to reduce 20% of GHG emissions of scope 1 and 2 in 2030 with respect to a Business as Usual scenario. During 2021, Ecopetrol will review and update the medium and long-term goals for reducing GHG emissions for scope 1,2 and 3, taking into account the new nationally determined contribution of Colombia (NDC), whose general objective is to reduce 51% of the country’s emissions by 2030, among others.

To achieve its objectives, Ecopetrol is implementing a decarbonization plan that is structured in four components: (i) permanent updating of the GHG inventory, (ii) development and implementation of an emissions reduction portfolio, (iii) design and implementation of a portfolio of compensation through Natural Climate Solutions, and (iv) definition of a carbon neutrality roadmap.

 
Ecopetrol Decarbonization Plan

 

Inventory of Emissions

Current Emission

10.9 million tons of CO2e/year*

Refining

46%

Production

51%

Transport

3%

Emission reduction

Fugitive emissions and vents

Clean Climate & Air Commission

Flaring

Zero routine burns by 2030 – World bank

Renewable energies

400 MW by 2023

Energy efficiency

3% by 2022

R&D

Emission compensation

Nature – based solutions

Deforestation avoided (REDD+)

Forest restoration (includes reforestation)

Planting trees in agricultural lands (silvopastoral and agri-forest systems)

 

Natural solutions of Climate

Carbon neutrality

Shadow price

Asset investment and divestiture

Decarbonization criteria in portfolio assignation.

Emission estimates, Scenario Analysis and Cost abatement curve

 

Source: Ecopetrol, Vice Presidency of HSE

Emissions inventory

Since 2009, Ecopetrol has a GHG inventory, prepared under the methodology established by ISO 14064-1 and the GHG Protocol - World Resources Institute (WRI) and World Business Council on Sustainable Development (WBCSD). Starting in 2013, the SAP EC - Environmental Compliance IT solution was implemented, which makes it possible to estimate a large part of GHG emissions from information captured by integrating existing tools in the operational areas.

In 2017, Ecopetrol’s greenhouse gas emissions inventory (corresponding to 2016) was verified by the firm AENOR in accordance with ISO 14064-1: 2006 Standard, recognizing that the GHG emission reported by Ecopetrol is accurate, consistent, transparent and without noticeable discrepancies. The verification covered 100% of the emissions generated in Colombia, in the facilities where the company has operational control.

During 2020, the inventory update process continued, which includes (among other aspects), the validation and inclusion of new sources, the review and update of emission factors and the update of global warming potentials in accordance with the Fifth Report of Evaluation of the Intergovernmental Panel on Climate Change (IPCC-AR5). In 2021, Ecopetrol’s GHG inventory will be subject to third-party verification again, and this verification will include the 2017-2020 period.

Scope 1 and 2 GHG emissions in 2020 were estimated at 10,986 kilotons of CO2e (KtCO2e), 5% less than in 2019, mainly associated with the refining segment, which in 2020 lowered the load by 14.4% (See Table 89 below). These emissions correspond to the emissions of the assets operated by Ecopetrol, including Reficar and Cenit.

Total annual GHG emissions (kilotons CO2e)}

 

SCOPE

 

2016*

2017*

2018*

2019*

2020**

Direct/Scope1

8.610

10.717

11.056

10.854

10.201

Indirect/Scope 2

527

455

508

722

784.9

TOTAL

9.136

11.172

11.564

11.576

10.986

Source: Ecopetrol, Vice Presidency of HSE

Note: The emissions reported correspond to the total of the assets operated by Ecopetrol, including Reficar and Cenit.

 

* Data adjusted based on the update of SIGEA 2016, 2017, 2018 and 2019.

** Corresponds to information inventoried for the first 10 months of 2020, and averaged for the months of November and December. These data may change once definitive information becomes available.

 

DIRECT EMISSIONS / SCOPE 1:

Corresponds to direct GHG emissions from sources that are controlled by the Company. Within this scope, emissions originated by combustion, fugitives, flaring, venting and transportation are reported.

INDIRECT EMISSIONS / SCOPE 2:

Corresponds to indirect GHG emissions derived from the generation of electricity purchased from a third party and consumed by the company


The increase in emissions from 2016 to 2017 is mainly due to constant improvements in inventory and the incorporation of assets that were put into operation by Ecopetrol (Cusiana, Rubiales and the expansion of the Cartagena Refinery).

The following Graph shows the results of the GHG emissions inventory by type of emission source (combustion, mobile sources, venting / process, fugitives, flaring and purchased electricity).

https://www.ecopetrol.com.co/wps/wcm/connect/836d0067-4648-45d5-b5f7-9e2d59435515/2/emisiones-gei-fuente.JPG?MOD=AJPERES

Source: Ecopetrol, Vice Presidency of HSE

* Corresponds to inventoried information for the first 10 months of 2020, and averaged for the months of November and December. These data may change once definitive information becomes available.


The following graphs show the direct and indirect GHG emissions, by operating processes in Ecopetrol. The direct emissions estimated in the production process were 4,951 KtCO2e (48.5%); 5,051 KtCO2e (49.5%) in refining and industrial processes and 199 KtCO2e (2%) in transportation and logistics. On the other hand, the indirect emissions estimated in the production process were 675 KtCO2e (85.98%), 0.17 KtCO2e (0.02%) in refining and industrial processes and 110 KtCO2e (14%) in transport and logistics.

 

https://www.ecopetrol.com.co/wps/wcm/connect/836d0067-4648-45d5-b5f7-9e2d59435515/3/emisiones-directas-anuales.JPG?MOD=AJPERES

Source: Ecopetrol, Vice Presidency of HSE

 

* Corresponds to inventoried information for the first 10 months of 2020, and averaged for the months of November and December. These data may change once definitive information becomes available.

 

https://www.ecopetrol.com.co/wps/wcm/connect/836d0067-4648-45d5-b5f7-9e2d59435515/4/emisiones-indirectas-anuales.JPG?MOD=AJPERES

Source: Ecopetrol, Vice Presidency of HSE

* Corresponds to inventoried information for the first 10 months of 2020, and averaged for the months of November and December. These data may change once definitive information becomes available.

 

The following table shows the carbon intensity indicators for production and refining and petrochemical processes, calculated for the year 2020. The intensity calculations correspond to the emissions of the assets operated by Ecopetrol, estimated from a production of 558,966 barrels of oil equivalent per day (bpde) and a volume of cargo to refineries of 319,800 barrels per calendar day (bcd).

 

Carbon intensity by activity

PROCESS

UNIT

CARBON INTENSITY

2016*

2017*

2018*

2019*

2020**

Production

kgCO2e/ barrel of oil equivalent year

27,9

26,3

26,7

26,8

27,6

Refining and Petrochemical

kgCO2e/barrels year

46,6

45,5

45,4

43,2

43,3

Source: Ecopetrol, Vice Presidency of HSE

 

* Data adjusted based on the update of SIGEA 2016, 2017, 2018 and 2019.

** Corresponds to information inventoried for the first 10 months of 2020, and averaged for the months of November and December. These data may change once definitive information becomes available.

 

The following tables how the data on direct and indirect GHG emissions by type of pollutant (CO2, CH4 and N2O).

 

Annual emissions of CO 2 (kilotons)

SCOPE

2016*

2017*

2018*

2019*

2020**

Direct/Scope 1

8.110

10.219

10.575

10.377

9.744

Indirect/Scope 2

525

455

508

721

784

Source: Ecopetrol, Vice Presidency of HSE

 

* Data adjusted based on the update of SIGEA 2016, 2017, 2018 and 2019.

** Corresponds to information inventoried for the first 10 months of 2020, and averaged for the months of November and December. These data may change once definitive information becomes available.

 

Annual emissions of CH 4 (kilotons)

SCOPE

2016*

2017*

2018*

2019*

2020**

Direct/ Scope 1

17

17

16

16

17

Indirect/ Scope 2

<0,1

<0,1

<0,1

<0,1

<0,1

Source: Ecopetrol, Vice Presidency of HSE

 

* Data adjusted based on the update of SIGEA 2016, 2017, 2018 and 2019.

** Corresponds to information inventoried for the first 10 months of 2020, and averaged for the months of November and December. These data may change once definitive information becomes available.

 

Annual emissions of N 2 O (kilotons)

SCOPE

2016*

2017*

2018*

2019*

2020**

Direct/Scope 1

0,09

0,11

0,11

0,11

0,11

Indirect/Scope 2

<0,1

<0,1

<0,1

<0,1

<0,1

Source: Ecopetrol, Vice Presidency of HSE

* Data adjusted based on the update of SIGEA 2016, 2017, 2018 and 2019.

** Corresponds to information inventoried for the first 10 months of 2020, and averaged for the months of November and December. These data may change once definitive information becomes available.

 

GHG Emissions from Ozone Depleting Substances (ODS) and their substitutes

The following table shows the total results obtained from GHG emissions by ODS.

GHG emissions from ODS

Source of emission

CO 2 emissions e (tons) *

2016

2017

2018

2019

2020

Refrigeration and air conditioning

1.432

2.002

1.940

2.765

3.012

Fire protection

N.D

N.D

N.D

N.D

N.D

Total Emissions of ODS

1.432

2.002

1.940

2.765

3.012

Imports

N.A

N.A

N.A

N.A

N.A

Exports

N.A

N.A

N.A

N.A

N.A

Total

1.432

2.002

1.940

2.765

3.012

Source: Ecopetrol, Vice Presidency of HSE

* The advanced method level 2a of the Intergovernmental Panel of Experts on Climate Change was used for the calculation of GHG emissions by ODS (Ozone Depleting Substances) and their substitutes.

 

Criterion pollutant emissions

The following table shows the emissions of criterion pollutants generated by the company between 2016 and 2020.

 

Criterion pollutant emissions (kilotons)

Pollutant

2016*

2017*

2018*

2019*

2020**

NOX

            21,01

            28,77

            27,96

            28,76

            31,52

SOX

            21,23

            26,61

            25,81

            25,77

            23,34

CO

         203,07

         277,76

         255,06

         241,37

         245,85

MP

              2,94

              4,37

              4,09

              3,95

              4,05

VOC

         107,20

         108,01

         108,66

         115,36

         110,31

Source: Ecopetrol. Vice Presidency of HSE

* Data adjusted based on the update of SIGEA 2016, 2017, 2018 and 2019.

** Corresponds to information inventoried for the first 10 months of 2020, and averaged for the months of November and December. These data may change once definitive information becomes available

 

The increase in NOx emissions in 2020 corresponds to the inclusion of the Pauto and Floreña assets, which became Ecopetrol’s operations as of March 2020.

With the implementation of plans to reduce fugitive emissions and vents, the reduction of gas flaring, the incorporation of unconventional renewable energy sources and the improvement of energy efficiency, as well as optimization in the operation and maintenance of the emission control systems in each of the facilities, it will be possible to reduce the emissions of criteria pollutants under Table XX in the future.


Emission reduction

Projects to reduce greenhouse gas emissions have been implemented since 2010 in different areas of the company, and voluntary reduction goals have been defined annually since 2012, upon the basis of the identification of projects planned to enter into operation in the following year.

In accordance with the above, the GHG reduction achieved by the new projects implemented in 2020 was 199,847 tCO2e – exceeding the goal established of 113,265 tCO2e by 76%.

The total GHG reduction for 2020 resulting from the implementation of projects executed since 2010 that continue to decrease was 1,809,858 tCO2e. The total accumulated reduction during the 2010-2020 period is 8,411,780 tCO2e (See Graph below).

As a result of the implementation of new emission reduction projects, the proposed goal for the year 2021 is 235,262 tCO2e.

In 2020, Ecopetrol had a reduction 687,769 tons of CO2e (as verified by Ruby Canyon Engineering, an international auditor endorsed by the Mexican Accreditation Entity (EMA) and the American National Standards Institute - INS), corresponding to the following projects:

  1. Energy-efficient technical dispatch at the Barrancabermeja refinery - 456,892 tCO2e, (period from January 2018 to September 2019).
  2. On-site electric power supply through generation with associated gas for the Casabe Peñas Blancas field - 15,353 tCO2e. (period from January 2018 to September 2019).
  3. Use of annular gas at La Cira field - 178,099 tCO2e e. (period from December 2010 to December 2016).
  4. Cogeneration of electricity from Bioenergy biomass - 37,425 tCO2e. (period July 2017 to September 2019).

Additionally, validation was achieved of the emission reduction methodologies under the solar photovoltaic renewable energy umbrella projects and the use of gas, which will allow future verification of the reductions achieved by the implementation of this type of project.

 

GHG Emissions Reductions (MtCO2e). 2010-2020 Period
https://www.ecopetrol.com.co/wps/wcm/connect/836d0067-4648-45d5-b5f7-9e2d59435515/5/reducciones-emisiones.JPG?MOD=AJPERES

Source: Ecopetrol, Vice Presidency of HSE

 

There are specific programs to reduce GHG emissions from fugitive sources and vents, reduction of gas flaring, implementation of renewable energy projects and improvement of energy efficiency as described below:

Reduction of fugitive emissions and vents: The Company’s Fugitive Emissions and Vents Management Strategy was approved in 2020. This strategy was built considering the advances of the company in the matter, the recommendations of the experts and the best practices of the industry. The strategy defines three main actions:

  • Updating and adjustment of the inventory, construction of emission factors and definition of reduction goals.
  • Incorporation of design criteria and good engineering practices to reduce fugitive emissions and vents.
  • Implementation of the LDAR (Leak Detection and Repair) program.

 

With the implementation of the strategy it is sought to achieve the following objectives:

  • Achieve compliance with the collective sectoral goal proposed by the member companies of the Climate and Clean Air Coalition (CCAC) by 2025 in terms of intensity of 0.25%, or in absolute terms of 45% by 2025 and from 60% to 75% by 2030 over the levels estimated for 2015.
  • The information reported must reach level 4/5 proposed by CCAC, for which it is necessary to: i) increase direct measurements by combining bottom-up and top-down technologies, ii) calculate proper emission factors, and iii) generate higher levels of transparency and credibility regarding reports.
  • Under the CCAC framework, 100% of the operated assets must reach the measurement level 4/5 in 2023, and 100% of the non-operated assets in 2025.

Since 2019, systematic progress has been made in the identification, quantification, preparation of action plans and closure of leaks and vents generated in different operating areas of the company. In total, 744 leaks were identified during 2019 and 2020, which have their respective closure plan, and 580 leaks were closed as of December the 31st, 2020, with 107% compliance with respect to the activities planned.

Reduction of gas flaring: Ecopetrol is part of the “Zero Routine Flaring” initiative led by the World Bank, which reflects the company’s commitment to eliminate routine flaring by 2030. The goal for 2022 is to reduce 77% of gas flaring in torches, which corresponds to a reduction of 45 million cubic feet per day (mcfd) to 10 mcfd with respect to the levels of 2017.

Renewable energy: In 2020, Ecopetrol increased the goal from 300 MW in 2022 to 400 MW by 2023 in Unconventional renewable energies to its electricity generation matrix, increasing the share of these sources from 5% in 2019 to 21% in 2023. These renewable energy projects will lead to an estimated annual reduction of 318,000 tCO2e / year. The construction of the San Fernando Solar Park began in 2020 with a capacity of 59 MWp, in addition to the 21 MWp of the Castilla Solar Park that came into operation in 2019.

Energy efficiency: The objective is to increase energy efficiency by 3% by 2022 as compared to the 2017 baseline, for which implementation cases have already been identified in the three segments of the Company: Upstream, Midstream and Downstream.

Emissions Offset - Natural Climate Solutions

These natural solutions have diverse approaches and benefits in: climate change, disaster risk reduction, improvements in water security, food security, human health and socioeconomic development. The natural solutions associated with climate change are known as Natural Climate Solutions (NCS), and by themselves they can generate up to 37% of the global emission reductions needed by 2030.

During 2020 – and with the support of The Nature Conservancy (TNC), Ecopetrol advanced in the construction of a portfolio of projects at the national level in Natural Climate Solutions (NCS) to leverage the fulfillment of GHG emission reduction goals. As part of this exercise, the projects with the greatest GHG reduction potential in Colombia were prioritized: i) deforestation or avoided conversion of the forest, ii) restoration of natural forest, and iii) planting of trees on agricultural lands (silvopastoral and agroforestry).

Within the framework of the NCS, the projects at the national level that will make up the portfolio are being identified in accordance with the following implementation mechanisms: i) Acquisition of carbon credits; (ii) Ecopetrol’s participation in the formulation and development of projects; (iii) development of projects in investment areas of 1% and mandatory compensation, once the obligation ceases and; (iv) projects on Ecopetrol’s own land.

The following evaluation criteria have been established to establish the inclusion of projects in the portfolio: (i) carbon storage or capture potential, (ii) government priorities and data availability, (iii) social and environmental co-benefits, (iv) use of recognized carbon standards, (v) cost-effectiveness and (vi) experience and capabilities of developers.

Not only is it sought to reduce emissions with these projects; the objectives are to also generate benefits to the communities near the areas of operation, improve local economies, contribute to the fulfillment of national goals in terms of conservation and reduction of deforestation and contribute to the economic reactivation in the areas of influence of the company. The implementation of the portfolio will begin in 2021.

Carbon Neutrality

During 2020, the Company made progress in the analysis and construction of important elements for the definition of a carbon neutrality roadmap. In this sense, the Company prepared the projection curve of GHG emissions in the medium and long term, the cost abatement curve, the construction of the compensation portfolio through SNC, and defined the shadow price that should be incorporated in the evaluations of the portfolio of investments.

For this last aspect, seeking to anticipate the risks derived from the impact of emissions, Ecopetrol structured the shadow price model for CO2 and the guidelines to incorporate its impact in the economic evaluations of the investment portfolio, which will be implemented as of 2021.

The shadow price will be USD $ 20 per ton in 2021, USD $ 30 per ton from 2025 and USD $ 40 per ton from 2030. This methodology applies to all GE growth and optimization opportunities under its initiatives for decision making in the different segments.

The carbon neutrality roadmap will be built in 2021; intermediate and long-term emission reduction goals will also be defined in line with Ecopetrol’s growth strategy, and the necessary mitigation and compensation initiatives and actions will be identified to achieve the goals, as well as the necessary resources.
 

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