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Green contracts: What does the future hold and how can Swire Energy Services help?

Posted 08 Jun 2023

Green contracts: What does the future hold and how can Swire Energy Services help?

As the energy sector undergoes a huge transition to reduce its CO2 output in response to ever growing climate change concerns, Swire Energy Services has made a commitment to reduce its carbon emissions as part of its comprehensive sustainability strategy. Following the company’s carbon reduction efforts thus far, the uptake of ‘green contracts’ between Swire and its customers has become a core business KPI.

Following on from part one in our green contracts series, Matt Nicoll, Commercial Director for Swire Energy Services, shares his insights on why they are integral to the future of the energy sector, and how Swire Energy Services has helped clients reduce their CO2 emissions thus far…

Why should companies have CO2 reduction as part of their KPIs?

“At Swire we have experience of working with both Operators and Service companies who have their own KPIs in place, it's advantageous for them, as part of their relationship with their own clients and stakeholders, to be able to say they are reducing their own CO2 emissions through certain initiatives, but are also selecting suppliers based on their performance as well.

“An example of this is that we have chosen a transport provider who uses HVO fuels rather than traditional diesel fuels, as it creates a significant reduction in emissions. We've chosen them as a supplier for exactly the same reason that our customers might choose us as their supplier.

“We are doing our bit - we're investing by meeting these additional costs - but I think each business within the sector has to be doing the same, in order to make an impact. Companies should be looking at their own CO2 emissions, as well as those of every company that they're in partnership with, whether it's a supplier or customer relationship. I believe that businesses simply won't be able to remain competitive if they engage with a supply chain that isn't taking steps to be more sustainable.”

Can you provide a few examples of some green contracts that Swire has won?

“We've worked with a major North Sea operator and other key customers sharing information on our efforts to help them to be more sustainable in their processes. Our expertise in this area has helped us to both win new contracts and extend existing relationships. However, as I’ve alluded to earlier, it’s one factor, albeit an important one, in the overall decision making process for our customers and potential customers. We're all in the supply chain of the operators and it’s important to make sure that we can all pass some reasonable costs up through that supply chain to reduce the emissions of our sector”

“Specific examples at SES include switching from a diesel to electric fleet of forklifts, we've also introduced a wash bay which recycles 95% of the water it uses. When we are providing transport, this is now done using hydrogenated vegetable oil fuels and a lot of Swire's bases around the globe are powered with solar energy, which is something we're hoping to bring to the UK as well.

“Another key example is our investment of £3.5million on an automated blast and paint facility for both the UK and Norway, to ensure a best-in-class refurbishment cycle and extend the lifespan of our equipment.

The background to this is that, historically, we would often scrap units and manufacture new equipment because, for example, there had been a slight revision to the design that the industry preferred. However, we now focus on modification and refurbishment of existing equipment, wherever possible, to extend its life cycle. Not only is this model more financially attractive for our customers, but it also leads to substantial CO2 emissions reductions when compared with the historic model of scrapping older equipment and manufacturing from scratch.

Why do you think that green contracts are so important?

“The oil and gas sector will continue to be an integral part of the UK energy requirements for the next 30 plus years, and as a sector we have to put in significant effort to reduce our CO2 emissions in order to remain credible. We all need to do better collectively and demonstrate that our sector offers a far more environmentally friendly energy source than if we were to switch to a model that involved relying on importing oil and gas to meet our national energy requirements.

“It’s also important to make the energy sector an attractive arena for people to do business. We have to prove to the population as a whole that there is actually a way for us to carry out operations that are less harmful to the environment. There's no possible way for us to immediately switch to renewable energy solutions, so we need to explain the steps that we're taking as a sector to make changes that are better for the planet and share learnings to be passed through the supply chain which can actually help the oil and gas sector have a much more sustainable future.”

In your opinion, what does the future look like for green contracts at Swire Energy Services?

“At the moment I think we are in the infancy of understanding how we best present our carbon footprint efforts, as it’s still fairly high level and focuses on overall emissions. We're currently working towards being able to inform our customers of the carbon footprint and CO2 emissions associated with the products and services that they require, how we have managed to reduce the emissions - whether it's through the use of an electric forklift, automated blast and paint, recycling - and then we’ll be able to illustrate how these levels of emissions have decreased compared to say, 5 years ago.

“Finally, I think there needs to be more discussion on carbon reduction, where everyone can share their learning so the industry can make this collective effort to have greener operations.

This cannot be seen as a competitive advantage - we need to be approaching CO2 reduction in the same way that we would approach safety: it's something we want to get right and then share our learning with the wider industry. There needs to be this collaborative approach in order to make positive, lasting changes in the energy sector.”

Swire Energy Services is committed to the sustainable development of its businesses and aims to create long term value for its shareholders with a target to be carbon neutral by 2030.

Learn more about our sustainability strategy here.