The head of Portuguese energy company Galp Energia, who previously served as a longtime executive at Shell, made an urgent plea on Tuesday evening for oil and gas companies and other parties to step up efforts to make the energy transition needed to tackle climate change.

“To get to [a warming of] 1.5 degrees, we have to decarbonise by 15% a year,” said Andy Brown, chief executive of Galp, referring to a goal of the Paris climate agreement to cap rising global temperatures.

“We are at about 1.4% a year,” he said of the decarbonisation level. Therefore, “the urgency is intense”, he warned at the Rio Oil & Gas 2022 conference.

Brown, the former head of upstream at Shell, called for oil and gas companies to do more. “We have fundamentally underinvested in renewables,” he said.

Supply-chain mismanagement

Other major problems he highlighted include not properly managing supply chains and not sufficiently backing rare earth minerals, which are key to energy alternatives.

For example, “We’ll need to double the copper we have today by 2025,” he said. “We’re almost too late.”

Brown touted an agreement his company reached with Northvolt last December to build a lithium conversion plant in Portugal.

They expect operations to start by year-end 2025 and to commence commercial operations in 2026, according to a company press release in April. The plant forecast having an initial lithium annual production capacity between 28,000 and 35,000 tons of battery-grade lithium hydroxide.

“There’s no lithium hydroxide conversion in Europe anywhere,” he warned. “It’s all in China.”

The plant estimates it will produce 50 gigawatt-hours of battery production per year, enough for more than 700,000 electric vehicles.

Brown observed, “There’s been a lot of doubt whether oil companies can work with renewables.”

But he said he thinks, “we will meet in the middle.”

He told his industry peers that renewables are “at the core of what our future is and what a lot of international oil companies' is.”

At the same time, he made a plea to reduce criticism of the oil and gas industry, saying that was counterproductive, and they are needed to make the energy transition a success.

“We’re compounding the issue by demonising oil and gas,” he said.

'The moment for hydrogen'

“Galp is going through a very massive transition,” and spending half of its capital on renewable energy products, Brown said.

That includes launching a 100-megawatt initiative in green hydrogen in Portugal next year.

“I think this is the moment for hydrogen,” he said. He expects heavy transport vehicles to be the first adopters and then airlines. Then it’ll move into the industrial sector.

While he acknowledged much remains unproven about clean hydrogen, he said, “Companies will have to take bold risks.”

He also called for governments to do more; for example, “to provide incentives to give a safety net.”

Brown said he thinks Brazil will play a key role in the energy transition.

“It’s really contributing very positively to the energy mix in the world,” he noted. “But it’s just starting.”

Brazil represents more than 50% of Galp’s revenue and its oil production in the country will grow by 30% by 2025. That is even though it has had setbacks in the country.

Brazil has the cheapest energy in the world, he said. “This is an opportunity for Brazil to take a major role.”