Ecopetrol articulates its climate change strategy to the public policy of the national government, likewise, contributes to the construction of technical and normative guidelines to strengthen the institutional capacity of the country in climate change. In the framework of this component, regulatory risks associated with climate are also managed, which may have an effect on the company's climate change management.
Support continues for the implementation of the Comprehensive Climate Change Plan for the energy mining sector –PIGCCme- formulated by the Ministry of Mines and Energy.
In 2020, Ecopetrol participated in the work tables convened by the Ministry of Mines for the construction of the regulations on burning in firewood and fugitive emissions, which will be issued in 2021 by said Ministry. In the same way, the necessary information was provided for the development of the analysis in the "Estimation of the Capture Potential of greenhouse gas removals due to the implementation of compensation activities imposed as an environmental obligation on the mining and energy sector" that allowed to guide the Ministry of Mines on the mechanism to account for the reductions resulting from the mandatory environmental compensation, once they are fulfilled.
Additionally, we participated in the consultation process led by the Ministry of Environment and Sustainable Development on the update document of the Determined Contribution at the National Level -NDC-, contributing to the discussion on the challenges for the hydrocarbon sector in relation to accounting of emissions and their reduction. .
On the other hand, progress was made in the development of the actions established in the sector agreement signed between Ecopetrol and the Ministry of Environment and Sustainable Development in 2019, in relation to: i) promoting the implementation of best practices in operations of the sector that allow to achieve a low-carbon operation; ii) construction of a portfolio of mitigation and adaptation options based on nature; iii) development of national methodologies to verify emissions reduction and iv) adoption of adaptation measures to reduce the impact of climate variability and change phenomena, among others.
In relation to regulatory risks, Ecopetrol monitors the evolution of current and emerging regulations related to climate change, especially those associated with the management of GHG emissions.
In 2020, the update of the Nationally Determined Contribution -NDC- stands out, in which the National Government increased the ambition to reduce the country's GHG emissions by 2030 from 20% to 51%. This increase represents for the company the need to review its climate ambition scenarios and adjust, if necessary, the current goal of reducing emissions, an exercise that is in progress and will be the subject of announcements in this regard during 2021.
In relation to regulations about to be issued, with the adoption of the Climate Change Law (National Law of Colombia 1931 of 2018), the creation and establishment of a National Program of Tradable Quotas (PNCTE) was established. The PNCTE is expected to come into force in 2022, which may have an effect on the allowed CO2 emissions and the cost per ton of carbon. Additionally, the regulation on fire burning and fugitive emissions has been identified, which will require a greater effort on the part of the company, in the identification, measurement and correction of fugitive emissions and vents.
These risks associated with regulations are monitored from the axis of participation in public policy documents of the company's Climate Change Strategy.
As part of the commitment to mitigate GHG, Ecopetrol continues to be part of the Climate and Clean Air Coalition –CCAC- that seeks to accelerate the reductions of methane and black carbon. In 2020, the company also signed the OGMP 2.0 (Oil and Gas Methane Partnership) commitment.
Likewise, since January 2020 Ecopetrol has been part of the initiative led by the World Bank “Zero Routine Flaring Initiative (ZRF)”, launched in 2015 by the Global Gas Flaring Reduction (GGFR) Partnership, in order for companies to voluntarily commit to: