OREANDA-NEWS. Total has acknowledged that some of the world's fossil fuel resources cannot be developed now that nations have agreed a plan to limit global warming to 2°C this century.

It is for this reason that the company withdrew from projects in the Arctic and in Canada's oil sands last year, it said in a new report entitled Integrating Climate into Our Strategy.

Following the global Paris deal to reach net zero emissions this century, Total is the second large oil and gas firm after Shell to release a wide-ranging report on how its operations might fit into the 2°C scenario.

The firm operates an internal shadow carbon price of $30-40/t CO2 equivalent (CO2e) and said that, enacted externally, a similar price would be enough to incentivise coal to gas fuel switching and investment in carbon capture and storage (CCS), although it avoids saying such a price would be high enough to constrain global emissions adequately to remain with the 2°C limit.

Total said internal studies have shown that a $40/t CO2e price on carbon would only reduce its total upstream and downstream asset value by 5pc.

"Our portfolio can therefore be considered resilient under such a scenario," the firm said.

The focus of the report is on how coal-to-gas fuel switching, energy efficiency and carbon capture use and storage (CCUS) can help nations reduce emissions in the short term, including a notable plan to spend 10pc of all research and development funding on CCUS technologies.

But the firm provided no quantification of how it expects oil and gas demand to be reduced in a world limited to 2°C warming, instead citing percentage energy mix figures from the Paris-based IEA's 2°C scenario.

Going forward the firm will integrate its climate division with its long-term strategy unit, withdraw from all coal marketing by the end of 2016, invest in energy storage technologies, and have renewables contribute 20pc of its total energy production in 20 years time.

Total has reduced its emissions by 19pc to 42mn t CO2e between 2010 and 2015, and hopes to continue reductions through phasing out routine gas flaring and improving energy efficiency.