Italy's Snam sets 2040 carbon target in clean energy drive

FILE PHOTO: Italian gas group Snam logo is seen outside their office in Rome, Italy, June 4, 2020. REUTERS/Guglielmo Mangiapane

MILAN (Reuters) - Italian gas group Snam aims to be carbon neutral by 2040 and will increase spending to get its network ready for hydrogen and the transition to cleaner energy sources.

Europe’s biggest gas pipeline company said on Wednesday it would invest 7.4 billion euros to 2024, half of which would be to prepare its infrastructure to receive hydrogen.

It said its net zero carbon target did not include emissions beyond its control, but it was working with suppliers to address emissions referred to as Scope 3, generated by the provision and use of its products.

It said it aimed to cut direct and indirect carbon emissions by 50% to 2030 from a previous target of 40%.

“Snam will be one of the first energy companies to reach carbon neutrality in 2040 and provide a wide contribution to the decarbonisation of the system through the development of green gases and, in particular, hydrogen,” Snam CEO Marco Alvera said.

The company, which said it was also interested in involvement in the water sector, said it aspired to transport fully decarbonised gas in its network by 2050 to make Italy a European hydrogen hub.

Snam, which makes most of its revenue from gas transport in Italy, is keen to develop the use of hydrogen in its pipelines and has achieved a hydrogen blend of 10% in a pilot study.

Net profit in the period 2020-2024 is expected to grow by 2.5% a year while core earnings will rise by an average of 3.3%, the company said, confirming dividend growth of 5% a year to 2022.

Reporting by Stephen Jewkes; editing by Agnieszka Flak and Barbara Lewis