ENN Energy Holdings Limited is committed to environmental sustainability. By identifying the risks and opportunities posed by climate change, we take timely responses to adapt or mitigate the impact of climate change on business.
ENN Energy formulated the ENN Energy’s Climate Change Policy, which clarifies the company’s climate change targets and risk response. It is used as the basis to respond to climate risks, take advantage of the opportunities arising from climate change, and contribute to the mitigation of global climate issues.
The ESG Committee maintains oversight over climate change-related issues, regularly discusses and monitors climate risks through actions including:
1. Identifying the company’s climate risks and opportunities of climate, assessing the thus to set climate goals;
2. Assessing the impact of potential extreme weather and natural disasters on gas transmission and distribution, pipeline network storage, transportation, and safety, and formulating timely response strategies.
To guarantee the effectiveness of climate risk management and governance, the company incorporates performance indicators of climate risk management into management's remuneration with appropriate implementation and supervision of related activities through the establishment of a management team dedicated to climate change response.
Climate Stategy
Following the guidance of climate change management framework, ENN Energy has developed relevant business strategies to mitigate potential climate risks, while seizing opportunities of low-carbon transformation and benefiting the cooperation with stakeholders. We forwardly work with the government to carry out “goal-to-gas” and promote zero-carbon energy development. Solar energy, geothermal energy, biomass energy, and hydrogen are developed as the green energy business.
limate Risk Identification and Response
With preliminary review and analysis of the climate risk levels of operation area, we have identified significant climate-related matters that have had or are likely to have impacts on ENN Energy, and have formed risk identification results by region (see pages 13-15 of the ENN Energy 2020 ESG Report for details).
In 2020, we had identified the transition risks and physical risks related to climate change, and finally formulate corresponding countermeasures. At the same time, we have referred to the Climate-Related Financial Disclosure Task Force (TCFD) framework to disclose climate-related governance, risks, strategies and objectives.
Physical Risk | Impact | Response | |
Acute Risks | Typhoon | The operation pipeline network, equipment and facilities may be damaged, affecting the stability of gas supply, threatening the safety of employees and customers, and resulting in compensation and legal liabilities for breach of contract due to business interruptions and other issues | · We formulated a typhoon emergency rescue plan; · Used stronger facilities and pipes, and constructed a ring-shaped pipe network to effectively avoid one point destruction causing the overall destruction of the natural gas pipeline network; and · Constructed facilities near to the end user, such as heightened flood defences to improve resistance against natural disasters. |
Extreme Precipitation | The operation pipeline network, equipment and facilities may be damaged, affecting the stability of gas supply, threatening the safety of employees and customers. The risk of flooding of gas supply facilities in low-lying areas may increase. | · We formulated emergency rescue plans for flooding and lightning; · Adopted more robust facilities and pipes; · Increased interconnectedness the urban management information platform to realise the sharing of data and resources. This improves the timeliness of information acquisition, reduces the chance of pipeline damage, realises real time monitoring of third party operations along the pipeline network, provides safety risks alerts promptly, and thus enhances the pipeline network operational safety; · Designed and built a looped pipeline network to effectively avoid the overall damage of the natural gas pipeline network caused by a point damage; · Constructed a ring-shaped pipe network to effectively avoid one point destruction causing the overall destruction of the natural gas pipeline network; and · Constructed facilities near the end user, heightened flood defenses to improve resistance against natural disasters. | |
Flood | |||
Extremely Hot Weather | The health and safety risks of employees, the operating costs of temperature control in the stations, and the maintenance costs of gas supply facilities may increase. | · We formulated an emergency rescue plan for heat stroke. | |
Extremely Cold Weather | The health and safety risks of employees, the operating costs of temperature control in the stations, and the maintenance costs of gas supply facilities may increase. | · Implemented safety risk prevention and control measures for employees to protect their safety under extremely cold weather; and · Established winter gas supply working groups in each member company to insure gas supply for customers. The working groups will carry out temperature forecasting, monitoring, analysing and reporting of changes in resource supply and demand, as well as reviewing and updating their responses so as to actively prepare gas sources in advance to ensure stable supply. | |
Chronic Risks | Sea level Rise | Existing operating pipeline network and equipment and facilities may be damaged, and existing market may be affected due to migration of cities from coastal regions to inland. | · We continuously monitor the trends of sea level rise; and · Research relevant loss prevention and emergency plans. |
Global Warming | The risk of heat waves, droughts and fires may increase the maintenance costs of gas supply facilities. The energy consumption of gas supply facilities in the winter may decline. | · We formulated an emergency plan for extreme environments and an emergency rescue plan for heat stroke. | |
Transition Risks | Risks and Opportunities | Responses |
Risks and Opportunities Align with Transition Risks | In the future, the national energy structure will shift to non-fossil fuel energy. We are responding to the national energy policy by vigorously developing our integrated energy business, adjusting the proportion of renewable energy in the current business to better respond to market demand, and providing downstream customers with more diversified green and low-carbon energy solutions. | · Promoted the use and research and development of new and renewable energy sources, and expand the utilization of renewable energy sources such as solar energy, geothermal resources, and biomass in the pan-energy ecosystem; · Cooperated with local governments to continuously promote the optimization of energy structure, multi-energy complementarity and "coal to gas" policies. |
Objectives of Climate Change Management
In accordance with our medium- to long-term decarbonisation plan, we formulated emission reduction targets for city gas business and integrated energy business respectively.
Business Sector | Short-term (2025) | Medium-term (2030) | Long-term (2050) |
City Gas Business | By 2025, GHG emission intensity will be reduced by 10% compared to the 2019 baseline. | By 2025, GHG emission intensity will be reduced by 20% compared to the 2019 baseline. | Achieve net-zero carbon emissions by 2050 |
Integrated Energy Business | By 2025, GHG emission intensity of the energy generating facilities of integrated energy business will be reduced by 38% compared to the 2019 baseline. | By 2025, GHG emission intensity of the energy generating facilities of integrated energy business will be reduced by 48% compared to the 2019 baseline. |
Decarbonisation Action 2030 – The Journey to Net Zero 2024 Edition
ENN Energy first released “Decarbonisation Action 2030 – Journey to Net Zero” in 2021, proposing a long-term goal of achieving net-zero emissions by 2050 without relying on the purchase of green certificates and other offsets. The publication of the 2024 edition of “Decarbonisation Action 2030 – The Journey to Net Zero” (the “Decarbonisation Action 2024”) fulfils the Company’s commitment to reviewing its decarbonisation action plan every three years, examining the progress and achievements, and adjusting key targets to ensure the smooth advancement of its low-carbon transition.
Low-carbon transition driven by innovation in four key scenarios: Nature Gas, IE, Value Added Business and Low-Carbon Office
As a pioneer in the low-carbon transition, ENN Energy strives to promote the green development of industry and society through continuous innovation of its technology and business model. Based on customers’ actual needs, the Company provides whole-chain, customised energy solutions across four key scenarios: natural gas, IE, value added business and low-carbon office.
The Panorama of Decarbonisation Action 2030 – 2024 Edition
In the Natural Gas scenario, the Company is constantly improving its methane emission control initiatives and exploring innovative technologies to further enhance the energy efficiency of natural gas. Meanwhile, the Company is actively exploring the application prospects of natural-gas-based hydrogen projects. This includes collaborating with customers to build the first hydrogen blending station at a project operation site, achieving the simultaneous development of natural gas and hydrogen. In the IE scenario, the Company is actively advancing the construction of low-carbon factories and industrial parks while providing cleaner energy to facilitate the low-carbon transition in industrial energy use. The Company also leverages its extensive experience in building services management to provide customised building energy-saving solutions. Additionally, the Company is expanding its clean energy solutions with a focus on photovoltaics and biomass energy. This includes customising a distributed photovoltaic and storage project, as well as introducing low-carbon business models such as direct combustion of biomass for energy supply and biomass conversion to biogas. In the Value Added Business scenario, the Company leverages digital technologies to intelligently upgrade basic gas services and actively promotes energy-saving gas appliances to help residential users improve their energy use efficiency. In the Low-Carbon Office scenario, the Company implements a low-carbon operation across four dimensions, including cleaner energy utilisation, optimised energy management in office buildings, low-carbon transportation, and the construction of a low-carbon office system.
Smooth progress on low-carbon transition targets, with several targets achieved ahead of schedule
Over the past three years, the targets set in the Decarbonisation Action 2021 progressed smoothly, with some targets being achieved ahead of schedule. By the end of 2023, ENN Energy made significant strides in reducing greenhouse gas (GHG) emissions and optimising its energy structure, including:
- By continuously optimising methane control management, and promoting energy conservation and emission reduction, the GHG emission intensity of the city-gas business was reduced by 28.5% compared to 2019, surpassing the target of a 20% reduction by 2030 and achieving this significantly ahead of schedule.
- The GHG emission intensity per unit of energy generated in the integrated energy (IE) business decreased by 36.5% compared to 2019 through continuous exploration and promotion of renewable energy and diversification for a cleaner energy mix. The Company is making progress toward the target of a 48% reduction by 2030.
- By improving the energy efficiency of office buildings and implementing energy conservation measures, the energy consumption per unit area of office buildings was reduced by 11% compared to 2021, exceeding the target of a 10% reduction by 2025 and achieving this ahead of schedule.
- As of 30 June 2024, the annual biomass consumption reached 1.87 million tonnes, up 273.5% from 0.5 million tonnes in 2021. The Company is making progress toward the target of 3.27 million tonnes by 2030.
- In December 2023, the Company released its first Climate-Related Financial Disclosure Report, which disclosed its progress in terms of governance, strategy, risk management, metrics and targets by referencing the Task Force on Climate-Related Financial Disclosures (TCFD) framework.
- The updated investment and financing requirements and performance management methods for key green industry projects were included in the 2024 ENN Energy Green Finance Framework, which obtained an independent second-party opinion and certification provided by S&P Global in 2024.
Updates to net-zero roadmap and low-carbon transition targets
Based on its business operations, ENN Energy references leading domestic and international low-carbon transition standards and frameworks to set environmental and corporate low-carbon transition targets, while outlining a clear net-zero roadmap that provides guidance for its energy conservation and emission reduction efforts.
ENN Energy’s Net-Zero Roadmap – 2024 Edition
Since some targets have been achieved ahead of schedule in Decarbonisation Action 2021, the Company has set more ambitious new targets, demonstrating its determination to advance on the path to low-carbon transition. Meanwhile, the Company will optimise the emission reduction measures in various business scenarios to ensure the achievement of its long-term goals. These measures include:
- Using 2019 as the baseline year, the target for GHG emission intensity of the city-gas business has been updated from a 20% reduction by 2030 to a 50% reduction. To achieve this, the Company will continue to optimise the identification of methane emission sources to achieve full coverage of Pan-Tilt-Zoom (PTZ) laser methane monitoring system in all city-gate stations and expand the application of unmanned city-gas stations to significantly reduce the energy consumption.
- The GHG emission intensity reduction target for the IE business has surpassed the halfway mark. The Company will continue to increase the supply of renewable energy, establish an energy supply model that integrates multiple clean energy sources, and intensify the exploration of the application of renewable energy and zero-carbon energy such as photovoltaic, biomass, geothermal, air, and hydrogen energy relying on the IE micro-grid, and develop customised comprehensive energy solutions for customers based on their specific needs.
- The Company remains dedicated to addressing the needs of residential users. Building upon its commitment to ensuring gas safety, the Company will continue to leverage digital solutions to deliver comprehensive services that enhance the quality of life for households, assisting in the creation of green homes.
- Using 2021 as the baseline year, the target for energy consumption per unit area of office buildings has been updated from a 10% reduction by 2025 to a 20% reduction by 2030. To achieve this, the Company will continue to replace traditional lighting fixtures with energy-saving ones in self-sustaining office buildings, actively promote paperless office, deploy energy management systems in self-sustaining office buildings, and establish an internal E-Carbon Pass System to incentivise employees to reduce GHG emissions.
- The proportion of photovoltaic power consumed in self-owned office buildings has been updated from 5% by 2025 to 10% by 2030. To achieve this, the Company will continue to leverage its strong technological advantages of IE business to increase the developable photovoltaic area in office spaces.
Through the release of the Decarbonisation Action 2024, ENN Energy reaffirms its mission to “achieve the coordinated development of its own carbon reduction and the green upgrading of business, contributing to high-quality social development”. Moving forward, the Company will further integrate sustainability into its business practices and deeply explore market demands for green energy consumption driven by customer needs. By leveraging technology, it will continuously innovate products and services to promote intelligent upgrades in the industry. The Company will work hand in hand with upstream and downstream partners to support the realisation of China’s “Dual Carbon” goals.
ENN Energy understands the importance of biodiversity conservation and habitat conservation to the environment. We have now issued the Biodiversity Protection Policy to regulate assessments of biodiversity impacts in day-to-day operations and to implement relevant ecological restoration initiatives. At the same time, the policy also stipulates that ENN Energy should fully respect residents and reduce community impact.
ENN Energy’s biodiversity action map
Conservation of Construction
To standardise environmental management of construction, thus mitigating impacts to the environment, following principles were launched for large-scale projects processing:
Green Construction | |
Pre-construction | · Conducting environmental impact assessments, safety assessments, occupational health assessments and set strict evaluation standards for ecological conservation zone. · Prohibiting construction in nature reserves, ecological function area, forest, dense forest area. |
During Construction | · During the construction, low-noise equipment shall be selected to reduce the sound source level. · Preventing disturbances on trees, vegetation, or animal habitats. · Disposing wastes in accordance with laws and regulations to prevent environmental hazards. |
Post-construction | · Restoring the original site to its original state over time and prevent additional damage to the environment as a result of delayed restoration |
Biodiversity Welfare
ENN Energy actively participates in biodiversity conservation public welfare related to biodiversity conservation, and carries out diversified environmental protection actions on environmental protection theme days such as "World Environment Day". At the same time, we support environmental protection, biodiversity conservation and ecological restoration projects, will organise employees from departments and subsidiaries to participate in environmental protection public welfare activities.
Biodiversity Conservation Gallery
ENN Energy donated funds to support Noah's Ark for building the Naban River Nature Education Base and improving the environmental protection practitioners' capacity
ENN Chuzhou actively participates in wildlife conservation public events
Slope rehabilitation and biodiversity protection at Longyan ENN Gaobei Station
ENN Yueyang participates in the protection of swan habitat in Donggu Lake Wetland
Revegetation of LNG storage and distribution station on Zhanjiang Donghai Island
Implementing methane emission management is an important environmental protection measure in ENN Energy's city gas business segment. We are particularly concerned about safety issues and greenhouse gas emissions caused by methane leakage and release, and continue to carry out technical transformation, upgrade and BOG recovery for gas transmission, distribution and storage processes.
Emission Source Identification
In 2021, we organized a team of experts to identify methane emission sources and emission causes in the main business scenarios of urban gas, and implement methane emission management measures in all aspects to ensure that important potential methane emission sources are included in the management process.
Methane Emissions Management
ENN Energy has now standardized internal systems, standards and procedures related to methane emission reduction. Through the use of digital and intelligent tools, we realized the closed-loop management of "planning-execution-checking-processing" of the operation process, and implement specific measures for methane emission control. At the same time, we enhanced the training of employees' skills, and gradually establish a performance appraisal and salary incentive mechanism for methane emission reduction.
Scenario | Management Initiatives |
Urban station, storage and distribution station, gas station | Strengthen the operation and management of plants and stations, avoid unplanned maintenance, improve the reliability of equipment and facilities, and reduce methane emissions in the operation process: o Use digital and intelligent solutions to improve plant and station operation and plan management. o Improve employee skills through technical competitions, I-craftsmanship projects, and skill training to ensure operational efficiency and quality. • Technology application, improve operation quality and efficiency, ensure safe operation, and reduce methane emission risk. o Use the filling crane arm and interlocking device to replace the unloading hose to ensure the safety of the operation, strengthen the operation and operation management of the plant, avoid unplanned maintenance, improve the reliability of equipment and facilities, and reduce methane emissions in the operation process; use digital and intelligent solutions to improve plant operation and plan management, improve employee skills through technical competitions, I-craftsman projects, skills training, etc., ensure operation efficiency and quality technology application, improve operation quality and efficiency, ensure safe operation, and reduce methane emissions risk; use the filling crane arm and the interlocking device to replace the unloading hose to ensure the safety of the operation. Real-time monitoring of the methane emission of the plant and station by using the laser methane gimbal to ensure the safe operation of the station area.
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Pipe network and supporting facilities | • Carry out inspection of the old pipeline network of urban gas enterprises. • Strengthen the application of industrial IoT technology and pipe network simulation technology: o Use IoT equipment such as pressure regulating facility monitoring, valve wells, valve chambers, and cathodic protection to monitor the operation of the pipeline network and ancillary facilities. o Using online simulation technology, it is possible to dynamically simulate and calculate the operating conditions of the pipeline network, analyze the deviation from the actual operation, and automatically alarm to remind the operator that there may be faults and leaks, so as to assist in monitoring the actual pipeline network operation and identify and prompt hidden faults. • Using advanced methane monitoring instruments, gas leakage laser inspection vehicles, etc. to improve inspection efficiency, and quickly and accurately determine the potential safety threats of pipelines. • Promote the comprehensive coverage and application of the pipeline network visualization system, and realize the closed-loop management of the operation process "planning-executing-checking-processing". • Establish a pipeline integrity management system, build a dynamic preventive operation management model, and ensure pipeline safety.
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Indoor | • Strengthen indoor security check to ensure the safety of users' gas consumption. • Strengthen the education on safe gas use. • Utilize the linkage between the internal alarm and the shut-off valve to prevent leakage accidents.
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Vehicle transportation | • Promoting the installation of residual pressure recovery devices in liquid plants and receiving stations to reduce gas residues in loading and unloading, and reduce direct discharge of residual pressure. • Strengthen the maintenance and update of old vehicles and equipment, and install tank pressure detection equipment. • Continuously optimize dispatching plans through digital and intelligent means, improve vehicle operation efficiency, and optimize transportation routes and mileage. • Improve the safety management ability and safety operation standard of transportation links, and strengthen the training of employees. Make defensive driving training mandatory in carrier admission standards by the end of 2023. |
Benchmarking Industry and International leadership
Became a founding member of China Oil and Gas Company Methane Emission Control Alliance
In 2021, ENN Energy, as one of the founding members, joined the Methane Emission Control Alliance of Chinese Oil and Gas Companies. The alliance is a national, non-profit organization voluntarily initiated by companies engaged in oil and gas exploration, storage, transportation, and sales in China.
The alliance aims to promote the improvement of methane emission control technology and management level of oil and gas companies through sharing and cooperation among members, and support the country to achieve carbon peaking and carbon neutrality goals.
Join the Methane Guiding Principle (MGP)
The Methane Guiding Principle, established in 2019, is an international leading methane emission control organization. It aims to continuously reduce methane emissions, improve the level of methane control in the natural gas supply chain, improve data, advocate methane emission control policies and increase transparency. International large oil and gas companies including BP, Enagas, Shell are all members of the organization.
In 2021, ENN Energy became the second Chinese company to join the organization. We hope to take this opportunity to benchmark and learn from the excellent experience of international methane emission control, learn from excellent emission control measures, and further improve our performance in methane emission control.
Highlights of Methane Emission Control
On October 15, 2021, jointly organized by ENN Energy Holdings Co., Ltd., Beijing Gas Group Co., Ltd., and the Beijing Representative Office of the American Environmental Protection Association, the "11th China Gas Operation and Safety Seminar" and the " 2021 Academic Annual Meeting of the Gas Branch of the Chinese Society of Civil Engineering - Methane Emission Reduction to Help Urban Gas Carbon Neutralization Seminar" were held in Zhengzhou, Henan.
The "Methane Emission Control Initiative of China's Urban Gas Companies " initiated by ENN Energy and Beijing Gas has received positive responses from ten urban gas companies, and jointly signed the "Methane Emission Control Initiative of Chinese Urban Gas Companies". Liu Jianfeng, Chief Financial Officer of ENN Energy, attended the meeting as a guest speaker and presided over the signing ceremony.
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