Transition Plan Analysis:

• Engie’s plans to reduce carbon intensity for scope 1 and 3 emissions from generation are not fully aligned with 78% over 2017-30 implied in the goals of the Paris Agreement. Engie’s target of reducing scope 3 emissions from gas supply 22% by 2030 could also be more ambitious.
• Despite higher, volatile gas prices and likely unsustainable levels of profitability, Engie is still building new merchant CCGT. It is not currently considering retiring any of its 15GW of merchant or short-term contracted capacity.
• Engie needs to provide greater granularity of plans to inject biomethane and potentially hydrogen into the French grid. Without this, the grid accounting for 33% of Group EBITDA risks being stranded as Government policy is for full decarbonisation by 2050.
• Engie needs to take steps to deliver on its target of raising the annual renewables capacity build from current levels (2.2GW in H1 ’22) to 6GW from 2026.