Welcome to Navigating Net Zero: COP26 Series. Navigating Net Zero is JWN Energy’s framework for curating conversations and content related to Canada’s climate opportunities and challenges in a transition to a low-carbon economy. In this special series in advance of COP26, we have asked nine individuals to reflect on where Alberta and Canada fit within a global climate leadership nexus and offer perspectives on navigating collaboratively. Today, Martha Hall Findlay, chief sustainability officer of Suncor Energy Inc., describes how the company plans to meet its objective to be net-zero by 2050.
We are in the midst of an energy system transformation, one requiring major social, cultural, technological, and economic shifts. Addressing climate change while providing reliable, affordable, and responsible sources of energy the world needs is a critical challenge. We know it will require tremendous investment, technological innovation, enabling policies, and deep collaboration. As we envision our energy future, we must focus on the greatest good — human progress, quality of life and environmental success. All are interrelated and, at their core, driven by reliable and affordable energy.
Suncor took an important step forward this year, evolving our strategy and declaring six strategic objectives, including our objective to be a net-zero company by 2050. We also set an interim goal of a 10 megatonne (MT) reduction by 2030 across the energy value chain. This strategic objective supports our Purpose and is designed to generate value for our shareholders, customers and society. It builds upon a governance framework which established greenhouse gas (GHG) emissions as a principal risk to our business in 2016 and involved input from our Board of Directors. It followed a comprehensive review and refresh of our business strategy, identifying areas where we have expertise and opportunities to improve emissions and costs, while continuing to earn targeted rates of return, to develop a concrete — and pragmatic —– path forward.
Continuing to reduce the emissions footprint of our base business is foundational to getting to net-zero. Energy efficiency projects, new technologies and switching to lower GHG-emitting fuels — like the project to replace coke-fired boilers at our base plant and our progress on solvents for next generation in situ extraction — will get us part way there. Equally important will be expanding low-emissions businesses — low GHG power, renewable fuels and clean hydrogen —– which build upon our decades of operating similar assets, extensive midstream expertise and connection to the energy consumer. These investments leverage core competencies, enable margin capture and improve the environmental performance of our operations and the products we sell —– all the while developing assets that we expect to generate returns for decades to come.
Technology and innovation have the potential to move us from incremental to step-change improvements in emissions reductions, particularly beyond 2030 when many of these technologies are expected to be commercially available. Carbon capture, use and storage (CCUS) will be a critical part of getting the world to net zero and Alberta’s geology is among the world’s best for large-scale implementation. In June, Suncor and four other oilsands producers launched the Oil Sands Pathways to Net Zero alliance, representing 90 per cent of all oilsands production. In collaboration with the federal and Alberta governments, our objective is to achieve net zero GHG emissions from oilsands operations by 2050, representing about 68 MT/y, a crucial enabler to meeting Canada’s climate commitments.
The foundation of the Pathways initiative is a CCUS trunkline connecting over 20 oilsands facilities in northern Alberta to a carbon sequestration hub, built in phases and available to other industries. It would operate in parallel with a number of approaches and technologies the various companies are already using and/or planning to address GHG emissions, including electrification, fuel substitution, energy efficiency, and carbon capture. Examples include Suncor’s recent partnership with ATCO on a large-scale clean hydrogen production facility, participation in the Alberta Zero Emissions Truck Electrification Collaboration (AZETEC) partnership to test long-range hydrogen fuel cell trucks, our investments in LanzaTech, LanzaJet and Enerkem, which are developing low-emissions renewable fuels, and our investment in Svante Inc., which is developing second-generation CO2 capture technology for the decarbonization of combustion emissions and clean hydrogen production.
Oil Sands Pathway to Net Zero proposed carbon trunkline
The challenge is to do all this economically while keeping our industry globally competitive. Governments, both federal and provincial, must play a vital role in promoting Canada as an oil supplier of choice in global markets, for as long as there is global demand. This includes providing the regulatory certainty and the appropriate fiscal tools to incent investment in GHG-reducing technologies, while allowing the industry to remain competitive. We’re encouraged by the increased focus on this by all levels of government. We believe that stable and transparent policy instills confidence in financial markets, industry and society. This confidence enables the continued economic prosperity required to develop the low-carbon economy and incents investment in the technology and innovation that is critical to reducing emissions globally.
Oilsands producers have already reduced GHG emissions intensity by 20 per cent since 2009 and, even with conservative assumptions, are expected to achieve at least as much in the next decade. The oil and gas sector is responsible for 75 per cent of cleantech spend in Canada, according to a study conducted for the Clean Resource Innovation Network (CRIN). As part of Suncor’s $2.5 billion technology spend since 2015, we’ve made significant investments in projects to lower GHG emissions in our base business and in expanded energy offerings. Our newest oilsands mine, Fort Hills, is half the GHG intensity of the oilsands average and similar to the average intensity of U.S.-refined crude, on a life cycle basis. We’ve been increasing low-GHG power generation through cogeneration and wind power, completed Canada’s first Electric Highway™, and are making strategic investments in low-emissions renewable fuels. Together, these initiatives have reduced 3.5 MT of emissions as of 2020. We invest and participate in several initiatives with the goal of addressing the most pressing challenges of our industry: Evok, COSIA, CRIN, ArcTern, and the Carbon X Prize, to name some.
Our new GHG strategic objectives are underpinned by a foundational goal of continuing to demonstrate leading ESG performance and disclosure. As part of this, we will continue to advance our performance in all areas —– not just GHGs —– including water, air, land, biodiversity, safety, Indigenous reconciliation, and leading governance practices, among others. We are proud of our collaboration with Indigenous communities, such as our recent agreement with eight Indigenous communities in the Regional Municipality of Wood Buffalo (RMWB) to acquire a 15 per cent equity interest in the Northern Courier Pipeline, which follows on our $500 million equity partnership with two other Alberta First Nations on our East Tank Farm Development, announced in 2017. Both partnerships will provide long-term, stable revenues that will benefit the communities for decades to come. We have a diverse and experienced Board of Directors, including Indigenous representation for over two decades. Both our Board and management have at least 35 per cent female representation.
Achieving leading ESG performance isn’t assured and won’t be easy. Our engagement with diverse partners — governments, customers, Indigenous Peoples, communities, investors, and lenders — is critical to our future success; so is a stable regulatory and fiscal framework that incents ongoing innovation in new technologies and keeps Canada competitive. Ultimately, exporting our responsibly produced energy, technology and know-how will truly elevate Canada’s leadership in every element of ESG.
 IHS Markit. 2018. GHG intensity of oil sands production: Today and in the future. Available online at https://ihsmarkit.com/products/energy-industry-oil-sands-dialogue.html.