The global energy landscape is evolving at an unprecedented pace. The energy transition towards a less carbonised consumption is a need and a reality, driven by growing environmental awareness of the civil society, an ever more stringent regulatory environment, maturing new markets, new technologies and changing economic fundamentals. These developments are not only impacting traditional energy companies but also a wide range of other industries such as the car industry, the farming industry and even the building sector.
How are the various players in the energy sector adapting while the industry is evolving at a fast pace?
The oil industry is evolving pushed by the energy transitionWe are already witnessing changes in regulations that impact the traditional energy sector such as IMO 2020, RED II or diesel car limitation in western cities. Having the energy transition in mind, we expect to see in the future more regulations impacting heavily the market. The IMO revolution is just the prelude to the new world of oil in the next 10-20 years with more and more disruptive regulations to be implemented in the wake of the energy transition.
This transition has also triggered the emergence of strong Megatrends in Europe: the liberalisation of the power and gas trading in Europe and the optimisation of the energy use, as well as the rise of new energy vector such as hydrogen.
The energy transition has been an opportunity for new players to emergeAs often, challenges lead to the emergence of new business landscapes, paving the way for new players and new markets:
- The liberalisation of the power and gas trading in Europe, the volatility implied by solar and wind farms and the need to optimise energy have been a trigger for the quick rise of new innovative companies taking advantage of the flexibility in the energy sector and developing Virtual Power Plants. Those companies are able to reshape our domestic view on energy and how we consume energy in our daily live.
- Megatrends such as the development of new vectors of energy have pushed not only the energy sector but also the entire ecosystem to innovate: farmers investing into biogas facilities or car industry investing into electric vehicle and hydrogen.
What is the role of BNP Paribas in such context?BNP Paribas is committed to act as an accelerator of the energy transition while continuing to play an important role in ensuring the security of energy supplies. This translates into ever increasing and ambitious commitments towards less carbon intensive energy alternatives while maintaining a strong support to traditional oil players. What can the commodity trade finance industry bring to support this diverse energy ecosystem? What are the challenges and opportunities for various players across the whole spectrum of energies trading? BNP Paribas' Commodity Days was an occasion to reunite three companies, each occupying a different niche position in the energy ecosystem,and for them to share with us their insight, ideas and perspectives on these questions and others: a crude oil producer & refiner, a natural gas & power distributor, and a producer & distributor of renewable hydrogen.
This article was first published by BNP Paribas Switzerland.