Green decommissioning: putting a new emphasis on GHG reduction for decom projects
The decommissioning process of offshore assets such as oil and gas platforms is complex and expensive. Historically, decommissioning projects’ environmental aspects were not always considered from an entire supply chain perspective.
With guidance from the Paris Agreement and the the maritime industry is shifting toward more effective GHG emissions management and reduction. For decommissioning, this means that all stakeholders—from owners and operators to supply chain companies—have an obligation to take a more sustainable approach toward their operations.
What are GHG scopes?
It is now commonly accepted that driving down GHG emissions is essential for future environmental sustainability. While this responsibility has thus far been placed on big marine and offshore players, supply chain companies have a duty to join the fight, if they want to retain their position in the energy industry.
Despite playing a key role in the decommissioning process, however, suppliers often do not know what their carbon footprint actually is, nor do they have a GHG reduction strategy in place to help them create and meet viable reduction targets.
To get up to speed, a good starting point is an understanding of the “scopes” that have been defined by the GHG Protocol Initiative for GHG accounting and reporting purposes:
- Scope 1: direct GHG emissions
Scope 1 emissions are direct emissions from company-owned or -controlled sources. For the oil and gas industry, main sources of Scope 1 emissions include stationary combustion, mobile combustion, fugitive emissions, process emissions and land use.
- Scope 2: electricity indirect GHG emissions
For most businesses, indirect Scope 2 emissions are linked to the generation of electricity that has been purchased and used. For oil and gas companies, this puts a focus on asset operations and particularly concerns electricity, steam, heat and compression.
- Scope 3: other indirect GHG emissions
Scope 3 includes all other indirect emissions that occur outside of a company and its assets, but within its value chain, accounting for organizations’ entire business ecosystem. These emissions are the hardest to track and control, but often represent the greatest share of a company’s environmental footprint. GHG emissions from oil and gas use are more than twice that of production, representing a significant portion of the energy industry’s climate impact.
For oil and gas companies, Scope 3 emissions frequently occur in the transportation and distribution of goods and the provision of services—both upstream and downstream.
For example, companies are considered accountable for the emissions of vessels entering and exiting the field, despite not owning or operating them. Within Scope 3, energy providers must push to limit these emissions, ensuring the provision of goods and services is done in a way that limits environmental impact.
Understanding green decommissioning
There is a perceived view that an asset being decommissioned is non-emitting once it has been shut down.
While a decommissioned asset may technically be “switched off,” the activity levels associated with that asset increase, as do the emission levels and need to be reported. The generation of power on the asset as well as the process of bringing and removing material to and from the asset are both huge contributors to GHG emissions.
Additionally, emissions created in the breaking down, disposal or recycling of parts need to be accounted for.
Stronger, sustainability-minded decommissioning services can improve these processes and give a fuller picture of just what actual GHG figures look like. Implementing measures to gain visibility will ensure GHG Protocol requirements are understood and adhered to by the entire supply chain.
Implementing and leveraging a strong GHG reduction strategy
Resulting from the Paris Agreement, operators now have compliance obligations that didn’t exist before. Depending on the size of an organization, carbon footprint and reduction plans need to reported.
The obligations upon large companies are clear, mandated by regulation or law depending on the geography. For smaller organizations, GHG compliance remains voluntary. However, the supply chain will and does fall under the operators’ scope 3 obligations. It is therefore inevitable that a supplier will get questions regarding its green credentials at some point and it may well become a qualification to supply.
While the goal is not to become compliant overnight, carbon-neutral plans need to be set, particularly by suppliers who currently have no GHG emissions reduction strategy in place. This is a formidable challenge to smaller suppliers, who usually do not have the in-house knowledge or capabilities to achieve compliance.
But the advantages to developing this knowledge—or leaning on the established expertise of a green decommissioning industry leader in—are evident. Operators can not only reduce emissions, but work to optimize reuse and recycling. The repurposing of offshore decommissioned assets—using them for CCUS, hydrogen production or offshore wind—can be a key factor, as the industry undergoes the energy transition.
In this way, green decommissioning goes beyond simple emissions reduction. When operators reuse assets and parts such as pipelines and equipment such as valves and turbines, they not only bring about the circular economy: those repurposed parts result in attractive cost savings for operators and the supply chain.
BV Solutions M&O helps clients achieve compliance and reduce GHG emissions. Our sustainability services include carbon footprinting and measuring to begin the green decommissioning journey. It is only by understanding organizations’ current positions (a robust and verified baseline carbon footprint) that we can set up planning and reporting procedures, to start the process.
Additionally, we deploy digital twinning and smart data management systems to optimize decommissioning costs, mitigate safety risks, ensure environmental protection, and enhance collaboration across the supply chain. We also aid decommissioning suppliers with solutions that support improving their vessels’ hull efficiency and controlling emissions.
By choosing BV Solutions M&O, supply chain players can ensure full compliance with regulatory requirements at each stage of the decommissioning process. Our strategies are adapted to fit the needs of each asset. And with a global network of experts, we provide flexible services to support all of our clients’ green decommissioning needs.
Global Strategic Sales Lead
BV Solutions M&O
Our goal is to help supply chain companies understand their obligations and position in the decommissioning process. As protocol and regulations are imposed, we are here to support accurate emissions reporting at all stages of the supply chain.