Energy utilities will play a critical role in achieving the Paris Agreement’s goal of limiting global warming to 1.5 degrees Celsius (1.5oC). Electricity production accounts for 25% of national greenhouse gas emissions and burning natural gas for heat in buildings accounts for approximately 11%.[1] In addition, significant upstream emissions are created from the production of fossil fuels used in power production and heating buildings.[2],[3] Utilities also provide energy to some of the most greenhouse gas (GHG) intensive industries. The International Energy Agency’s Net Zero Scenario is clear on the trajectory necessary to achieve 1.5oC, calling for net zero emissions from power generation by 2035 in advanced economies and globally by 2040, while requiring a 40% reduction of emissions from the building sector by 2030.
Ameren has set GHG reduction targets for its Scope 1 and 2 emissions but not for its Scope 3 value-chain emissions.[5] 40% of the Company’s total reported GHG footprint is within its value chain, including upstream production of gas, downstream burning of gas by customers, and purchased power from the grid.[6] The percentage may be higher. Research has found that the Environmental Protection Agency’s emissions factors for natural gas, on which many utilities’ methane calculations rely, potentially underestimate supply chain methane emissions by 60%. Peer utilities are starting to address value-chain emissions in their GHG reduction goals. PSEG and NRG committed to set a net zero target through the Science Based Targets initiative, which requires utilities to address all material Scope 3 value-chain emissions. Sempra, Duke, and Dominion set net zero targets covering full Scope 3 value-chain emissions, while Xcel and CMS have expanded their net zero targets to include customer use of natural gas.