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Goldman Sachs does and seeks to do business with companies covered in its research reports. As a

result, investors should be aware that the ﬁrm may have a conﬂict of interest that could affect the

objectivity of this report. Investors should consider this report as only a single factor in making their

investment decision. For Reg AC certiﬁcation and other important disclosures, see the Disclosure

Appendix, or go to www.gs.com/research/hedge.html. Analysts employed by non-US afﬁliates are not

registered/qualiﬁed as research analysts with FINRA in the U.S.

The Goldman Sachs Group, Inc.

EQUITY RESEARCH | March 17, 2022 | 9:21PM GMT

Michele Della Vigna, CFA

+44 20 7552-9383

michele.dellavigna@gs.com

Goldman Sachs International

Zoe Clarke

+44 20 7051-2816

zoe.clarke@gs.com

Goldman Sachs International

Security of Supply and the Return of Energy Capex

We believe that the Russia-Ukraine conﬂict is a turning point for the energy

sector, similar to and potentially greater than the 2011 concurrence of the

Fukushima nuclear accident/Libyan civil war. Similarly to 2011, we expect an

acceleration of US shale and global LNG construction. However, seven years

of hydrocarbon under-investment (2015-21) and an ongoing focus on de-

carbonization mean this energy investment cycle will be different. In this

report, we analyze in detail this Return of Energy Capex, with ﬁve key

conclusions:

1) Primary energy capex fell 35% over the past decade, and we expect it to

grow 60% by 2025 to $1.4 trn (from c.$0.9 trn in 2021).

2) This European energy crisis has a strong seasonal component (winter

demand for gas is >2x higher than in summer) that requires LNG imports

and hydrogen to complement renewable power growth.

3) Analyzing the global LNG project pipeline, we identify 156 mtpa, or

c.US$139 bn of new projects to be sanctioned over the next 5 years, with

average economics of $8-10/mcf.

4) Green Hydrogen is Europe’s long-term solution to security of supply,

seasonal storage and industrial demand. RePowerEU targets a 4x upgrade

to previous Green Hydrogen production by 2030.

5) The average capex intensity of low carbon energy developments is

c.2x that of hydrocarbons, further enhancing the need for energy capex; we

estimate the need for an incremental $1.5trn pa of capex by 2032.

Carbonomics

Bepul Shahab

+44 20 7774-3694

bepul.shahab@gs.com

Goldman Sachs International

Alberto Gandolﬁ

+39 02 8022-0157

alberto.gandolﬁ@gs.com

Goldman Sachs Bank

Europe SE - Milan branch

Daniela Costa

+44 20 7774-8354

daniela.costa@gs.com

Goldman Sachs International

Neil Mehta

+1 212 357-4042

neil.mehta@gs.com

Goldman Sachs & Co. LLC

Note: The following is a redacted version of the original report published March 17, 2022 [34 pgs].

PM Summary: The Return of Energy Capex

We believe that the Russia-Ukraine conﬂict is a turning point for the energy sector

investment cycle, similar to and potentially greater than the 2011 concurrence of the

Fukushima nuclear accident/Libyan Civil War. Similarly to 2011, we expect an

acceleration of US shale and global LNG construction, as the world revives short-cycle

oil production and globally fungible gas supply. However, we also identify several

differences: in 2011, the sector was seven years into a cycle of exploration and

mega-projects build-up that was fuelling resource expansion and a revival of non-OPEC

growth. The current situation is the exact opposite, with seven years of hydrocarbon

under-investment (2015-21), falling oil reserve life (-50% since 2014) and declining

non-OPEC ex-shale, requiring a steeper capex recovery in both long-cycle and

short-cycle production. Also, the ongoing focus on de-carbonization – driving a

higher cost of capital in oil & gas developments – means this energy investment

cycle will be different, characterized by a continued emphasis on renewables.

Primary energy capex fell 40% over the past decade, and we expect it to grow 60% by

2025 to $1.4 trn (from $0.9 trn in 2021)

We believe that the energy industry has been under-investing since the peak of

2014, with investments in traditional energy (oil, gas upstream) falling 61% from the

peak and driving a 35% reduction in global primary energy investments, from US$1.3trn

in 2014 to US$0.8trn in 2020. A number of oil and gas project investment decisions have

been delayed since 2014, translating into 3/10 mboe/d of lost LNG/oil production in

2024-25, on our estimates. The focus has shifted in recent years to energy sustainability,

but we note that the overall growth of the investments in renewables was not sufﬁcient

to compensate for the abrupt drop in investments in the traditional energy space, given

the smaller scale and higher capital intensity per unit of energy output. The average

capex intensity of low carbon energy developments is c.2x that of hydrocarbons,

further enhancing the need for energy capex; we estimate the need for an

incremental $1.5trn pa capex by 2032. We believe that the recent focus on energy

security, resilience and diversiﬁcation will drive a new era for energy investments,

which we argue should rise above the historical peak of US$2trn pa by 2024E to

support the globe’s rising energy needs. This is driven, on our estimates, by a major

increase in renewable power and networks infrastructure capex but also by the revival of

capex in traditional fuels, in particular natural gas (LNG), required to facilitate a more

resilient and affordable energy transition. 2020 marked the ﬁrst year in history when

renewable investments exceeded upstream oil & gas; whilst we expect this trend to

continue, with clean energies (renewables and bioenergy) maintaining a c.25% share in

global total energy supply investments to the middle of this decade, we note that

investments must also be supported in other parts of the energy ecosystem, primarily

natural gas (required for energy resilience and a key transition fuel) in the near term,

networks throughout this decade and clean hydrogen longer term.

17 March 2022 2

Goldman Sachs Carbonomics

The path to next zero: Mobilizing an extra $2trn per annum in low carbon investments

across low carbon technologies and network infrastructure

In aggregate, we estimate a total investment opportunity in clean tech

infrastructure of US$56 trn by 2050 in our path to global net zero by 2050 (GS

1.5°), as outlined in our Carbonomics: Net Zero framework. This ﬁgure focuses solely

on incremental infrastructure investments and does not include maintenance and

other end-use capex. Overall, the average annual investments in de-carbonization that

we estimate over 2021-50 are c.US$1.9 trn, with the peak in 2036 (US$2.9 trn)

representing 2.3% of global GDP (vs. US$1.6 trn pa, with a peak of US$2.5 trn in 2041

in the GS <2.0° scenario). We estimate that c.50% of de-carbonization is reliant on

access to clean power generation, including electriﬁcation of transport and various

industrial processes, electricity used for heating and more. Overall, we expect total

demand for power generation in a global net zero scenario by 2050 to increase

three-fold (vs. that of 2019) and surpass 70,000 TWh as the de-carbonization

process unfolds. Based on our GS 1.5° model, power generation almost entirely

de-carbonizes by 2040 (2055 under the GS <2.0° scenario).

This European energy crisis has a strong seasonal component (winter demand for gas is

>2x higher than in summer) that requires LNG imports and hydrogen to complement

renewable power growth

Renewable power generation is a key driver of the path to net zero carbon. However, it

suffers from two key problems that need to be addressed: intermittency and

seasonality. The seasonal nature of natural gas consumption, with EU average monthly

consumption of c.20bcm in Jun/July/Aug vs. c.45-50 bcm in Dec/Jan/Feb, will make it

very difﬁcult for Russian gas to be substituted with renewable power – especially solar

power, which has opposite seasonality. As the growth in renewable power accelerates,

intraday and seasonal variability has to be addressed through energy storage solutions.

To reach full replacement of coal and natural gas and de-carbonization of power

markets, we believe two key technologies will likely contribute to solving the

energy storage challenge: utility-scale batteries and hydrogen, each having a

complementary role, with batteries addressing intermittency and hydrogen addressing

seasonality. This low carbon infrastructure however will require decades to be

built. In the meantime, LNG remains a key transition fuel that both improves

security of supply and offers a lower-carbon alternative to coal-ﬁred power

generation. We analyze the global LNG project pipeline, identifying 156 mtpa, or

c.US$139 bn of new projects to be sanctioned over the next 5 years, with average

economics of $8-10/mcf. Our Top Projects analysis indicates a new wave of LNG

projects potentially coming at very competitive cost levels relative to history

(US$1.0-2.1bn/mtpa in 2022-2025E vs US$4.0bn/mtpa in 2015-16) in Qatar, Canada and

the US among others, contributing to a signiﬁcantly lower cost curve in 2022 vs 2014.

17 March 2022 3

Goldman Sachs Carbonomics

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GoldmanSachsdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethattheﬁrmmayhaveaconﬂictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertiﬁcationandotherimportantdisclosures,seetheDisclosureAppendix,orgotowww.gs.com/research/hedge.html.Analystsemployedbynon-USafﬁliatesarenotregistered/qualiﬁedasresearchanalystswithFINRAintheU.S.TheGoldmanSachsGroup,Inc.EQUITYRESEARCHMarch17,20229:21PMGMTMicheleDellaVigna,CFA+44207552-9383michele.dellavigna@gs.comGoldmanSachsInternationalZoeClarke+44207051-2816zoe.clarke@gs.comGoldmanSachsInternationalSecurityofSupplyandtheReturnofEnergyCapexWebelievethattheRussia-Ukraineconﬂictisaturningpointfortheenergysector,similartoandpotentiallygreaterthanthe2011concurrenceoftheFukushimanuclearaccident/Libyancivilwar.Similarlyto2011,weexpectanaccelerationofUSshaleandglobalLNGconstruction.However,sevenyearsofhydrocarbonunder-investment(2015-21)andanongoingfocusonde-carbonizationmeanthisenergyinvestmentcyclewillbedifferent.Inthisreport,weanalyzeindetailthisReturnofEnergyCapex,withﬁvekeyconclusions:1)Primaryenergycapexfell35%overthepastdecade,andweexpectittogrow60%by2025to$1.4trn(fromc.$0.9trnin2021).2)ThisEuropeanenergycrisishasastrongseasonalcomponent(winterdemandforgasis>2xhigherthaninsummer)thatrequiresLNGimportsandhydrogentocomplementrenewablepowergrowth.3)AnalyzingtheglobalLNGprojectpipeline,weidentify156mtpa,orc.US$139bnofnewprojectstobesanctionedoverthenext5years,withaverageeconomicsof$8-10/mcf.4)GreenHydrogenisEurope’slong-termsolutiontosecurityofsupply,seasonalstorageandindustrialdemand.RePowerEUtargetsa4xupgradetopreviousGreenHydrogenproductionby2030.5)Theaveragecapexintensityoflowcarbonenergydevelopmentsisc.2xthatofhydrocarbons,furtherenhancingtheneedforenergycapex;weestimatetheneedforanincremental$1.5trnpaofcapexby2032.CarbonomicsBepulShahab+44207774-3694bepul.shahab@gs.comGoldmanSachsInternationalAlbertoGandolﬁ+39028022-0157alberto.gandolﬁ@gs.comGoldmanSachsBankEuropeSE-MilanbranchDanielaCosta+44207774-8354daniela.costa@gs.comGoldmanSachsInternationalNeilMehta+1212357-4042neil.mehta@gs.comGoldmanSachs&Co.LLCNote:ThefollowingisaredactedversionoftheoriginalreportpublishedMarch17,2022[34pgs].PMSummary:TheReturnofEnergyCapexWebelievethattheRussia-Ukraineconﬂictisaturningpointfortheenergysectorinvestmentcycle,similartoandpotentiallygreaterthanthe2011concurrenceoftheFukushimanuclearaccident/LibyanCivilWar.Similarlyto2011,weexpectanaccelerationofUSshaleandglobalLNGconstruction,astheworldrevivesshort-cycleoilproductionandgloballyfungiblegassupply.However,wealsoidentifyseveraldifferences:in2011,thesectorwassevenyearsintoacycleofexplorationandmega-projectsbuild-upthatwasfuellingresourceexpansionandarevivalofnon-OPECgrowth.Thecurrentsituationistheexactopposite,withsevenyearsofhydrocarbonunder-investment(2015-21),fallingoilreservelife(-50%since2014)anddecliningnon-OPECex-shale,requiringasteepercapexrecoveryinbothlong-cycleandshort-cycleproduction.Also,theongoingfocusonde-carbonization–drivingahighercostofcapitalinoil&gasdevelopments–meansthisenergyinvestmentcyclewillbedifferent,characterizedbyacontinuedemphasisonrenewables.Primaryenergycapexfell40%overthepastdecade,andweexpectittogrow60%by2025to$1.4trn(from$0.9trnin2021)Webelievethattheenergyindustryhasbeenunder-investingsincethepeakof2014,withinvestmentsintraditionalenergy(oil,gasupstream)falling61%fromthepeakanddrivinga35%reductioninglobalprimaryenergyinvestments,fromUS$1.3trnin2014toUS$0.8trnin2020.Anumberofoilandgasprojectinvestmentdecisionshavebeendelayedsince2014,translatinginto3/10mboe/doflostLNG/oilproductionin2024-25,onourestimates.Thefocushasshiftedinrecentyearstoenergysustainability,butwenotethattheoverallgrowthoftheinvestmentsinrenewableswasnotsufﬁcienttocompensatefortheabruptdropininvestmentsinthetraditionalenergyspace,giventhesmallerscaleandhighercapitalintensityperunitofenergyoutput.Theaveragecapexintensityoflowcarbonenergydevelopmentsisc.2xthatofhydrocarbons,furtherenhancingtheneedforenergycapex;weestimatetheneedforanincremental$1.5trnpacapexby2032.Webelievethattherecentfocusonenergysecurity,resilienceanddiversiﬁcationwilldriveaneweraforenergyinvestments,whichweargueshouldriseabovethehistoricalpeakofUS$2trnpaby2024Etosupporttheglobe’srisingenergyneeds.Thisisdriven,onourestimates,byamajorincreaseinrenewablepowerandnetworksinfrastructurecapexbutalsobytherevivalofcapexintraditionalfuels,inparticularnaturalgas(LNG),requiredtofacilitateamoreresilientandaffordableenergytransition.2020markedtheﬁrstyearinhistorywhenrenewableinvestmentsexceededupstreamoil&gas;whilstweexpectthistrendtocontinue,withcleanenergies(renewablesandbioenergy)maintainingac.25%shareinglobaltotalenergysupplyinvestmentstothemiddleofthisdecade,wenotethatinvestmentsmustalsobesupportedinotherpartsoftheenergyecosystem,primarilynaturalgas(requiredforenergyresilienceandakeytransitionfuel)inthenearterm,networksthroughoutthisdecadeandcleanhydrogenlongerterm.17March20222GoldmanSachsCarbonomicsThepathtonextzero:Mobilizinganextra$2trnperannuminlowcarboninvestmentsacrosslowcarbontechnologiesandnetworkinfrastructureInaggregate,weestimateatotalinvestmentopportunityincleantechinfrastructureofUS$56trnby2050inourpathtoglobalnetzeroby2050(GS1.5°),asoutlinedinourCarbonomics:NetZeroframework.Thisﬁgurefocusessolelyonincrementalinfrastructureinvestmentsanddoesnotincludemaintenanceandotherend-usecapex.Overall,theaverageannualinvestmentsinde-carbonizationthatweestimateover2021-50arec.US$1.9trn,withthepeakin2036(US$2.9trn)representing2.3%ofglobalGDP(vs.US$1.6trnpa,withapeakofUS$2.5trnin2041intheGS<2.0°scenario).Weestimatethatc.50%ofde-carbonizationisreliantonaccesstocleanpowergeneration,includingelectriﬁcationoftransportandvariousindustrialprocesses,electricityusedforheatingandmore.Overall,weexpecttotaldemandforpowergenerationinaglobalnetzeroscenarioby2050toincreasethree-fold(vs.thatof2019)andsurpass70,000TWhasthede-carbonizationprocessunfolds.BasedonourGS1.5°model,powergenerationalmostentirelyde-carbonizesby2040(2055undertheGS<2.0°scenario).ThisEuropeanenergycrisishasastrongseasonalcomponent(winterdemandforgasis>2xhigherthaninsummer)thatrequiresLNGimportsandhydrogentocomplementrenewablepowergrowthRenewablepowergenerationisakeydriverofthepathtonetzerocarbon.However,itsuffersfromtwokeyproblemsthatneedtobeaddressed:intermittencyandseasonality.Theseasonalnatureofnaturalgasconsumption,withEUaveragemonthlyconsumptionofc.20bcminJun/July/Augvs.c.45-50bcminDec/Jan/Feb,willmakeitverydifﬁcultforRussiangastobesubstitutedwithrenewablepower–especiallysolarpower,whichhasoppositeseasonality.Asthegrowthinrenewablepoweraccelerates,intradayandseasonalvariabilityhastobeaddressedthroughenergystoragesolutions.Toreachfullreplacementofcoalandnaturalgasandde-carbonizationofpowermarkets,webelievetwokeytechnologieswilllikelycontributetosolvingtheenergystoragechallenge:utility-scalebatteriesandhydrogen,eachhavingacomplementaryrole,withbatteriesaddressingintermittencyandhydrogenaddressingseasonality.Thislowcarboninfrastructurehoweverwillrequiredecadestobebuilt.Inthemeantime,LNGremainsakeytransitionfuelthatbothimprovessecurityofsupplyandoffersalower-carbonalternativetocoal-ﬁredpowergeneration.WeanalyzetheglobalLNGprojectpipeline,identifying156mtpa,orc.US$139bnofnewprojectstobesanctionedoverthenext5years,withaverageeconomicsof$8-10/mcf.OurTopProjectsanalysisindicatesanewwaveofLNGprojectspotentiallycomingatverycompetitivecostlevelsrelativetohistory(US$1.0-2.1bn/mtpain2022-2025EvsUS$4.0bn/mtpain2015-16)inQatar,CanadaandtheUSamongothers,contributingtoasigniﬁcantlylowercostcurvein2022vs2014.17March20223GoldmanSachsCarbonomicsGreenHydrogenisEurope’slong-termsolutiontosecurityofsupply,seasonalstorageandindustrialdemand.Green(renewable)hydrogenisidentiﬁedasacriticaltechnologyinhelpingtounlockfurtherdiversiﬁcationawayfromnaturalgasinthecomingyearsandtheREPowerEUproposalincludesanotableupgradeofthe‘Fitfor55’targetof5.6Mtofrenewablehydrogenby2030to20Mtoverthesametimeframebasedonacombinationoflocallyproducedandimportedvolumes.Thisrepresentsac.4xupwardrevisionofanalreadyambitioustargetfortheregionandcanaidthereplacementof25-50bcmpaby2030,representingc.16%-32%ofimportedRussiangasvolumes,accordingtothedocument.Inthisreport,weoutlinethekeyrolewebelievethetechnologywillplayinenhancingEurope’senergysecurityandenergyresilience:(1)Thepushforelectriﬁcationandrenewablepoweracceleratestheneedforseasonalenergystorage,withgreenhydrogentheoptimalsolution.(2)Renewablehydrogenandbiogasarethenaturalsuccessorsoffossilgasfordiversiﬁcationofenergysupplyinenergy-intensiveindustrialprocesses:weviewhydrogenandbiogasasthekeynaturalsuccessorsofnaturalgasinhigh-temperatureindustrialprocesses.Around30%ofEurope’s(EU27+UK)naturalgasdemandstemsfromindustrialprocessesincludingsteel,chemicalplants,cementandothers.Giventhehighenergyintensity(temperatures)requiredformanyoftheseprocesses,directelectriﬁcationisoftennotfeasible,makinghydrogenandbiogasthetwonaturalmolecularsuccessorsforthedisplacementoffossilgas.(3)HigherspotEUnaturalgaspricestiltthescaleinfavourofgreen(renewable)vsblueandgrey(naturalgas-based)hydrogen,providingupsideforinstalledelectrolysiscapacityandtechnologicalinnovation:atcurrentspotEuropeangasprices,greenhydrogenisalreadyachievingcostparitywithgrey(fossil-based)hydrogeninkeypartsofEurope(greenhydrogenprojectswithlow-costrenewablepowerrelyingonPPAsnotexposedtothepowerpricevolatility).Thisistiltingthescaleinfavourofgreenvsgreyandbluehydrogen,leadingtoupsidetotheglobalinstalledelectrolysiscapacityestimatesandencouragingfurthertechnologicalinnovationintheelectrolysisspace.17March20224GoldmanSachsCarbonomicsTheEnergyCapexCorporateEcosystemPleasenotethatthelistofcompaniesintheecosystemwepresentaboveisnotexhaustiveSource:GoldmanSachsGlobalInvestmentResearch17March20225GoldmanSachsCarbonomicsCarbonomics:Thesisin12chartsExhibit1:Primaryenergycapexfell35%overthepastdecade,butweexpectittogrow60%by2025...Energysupplycapexsplitbyfuelandpowersupplysource(US$bn-LHS),andcleanenergy(renewables,biofuels)asa%oftotal(%-RHS)Exhibit2:...signallingtheendofsevenyearsofhydrocarbonunder-investment(2015-21)...TopProjectscapexsanctionedinoilbyyear,splitbywinzone0%5%10%15%20%25%30%05001,0001,5002,0002,5002010201120122013201420152016201720182019202020212022E2023E2024E2025ECleanenergyasa%oftotalEnergycapex(US$bn)Oil&gas-upstreamOil&gas-downstreamCoal-mining&infraBiofuelsCoal&gas-powerNuclearRenewablesNetworksREScapexshare(%)FuelsupplyPowersupply05010015020025020002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022E2023E2024ETotalcapex(US$bn)TraditionalHeavyOilDeepwaterLNGSource:IEAWEI(historicals),GoldmanSachsGlobalInvestmentResearchSource:Companydata,GoldmanSachsGlobalInvestmentResearchExhibit3:...thatweestimatewillcost10mnblsdofoilproductionby2025.TopProjectslostLNG,offshoreandonshoreoilproductionfromlong-cycledevelopments;TopProjects2021vs.2014expectationsExhibit4:Theshifttolowcarbonwillcontinue,fuelledbyadivergenceinthecostofcapital...TopProjectsIRRforoil&gasandrenewableprojectsbyyearofprojectsanction-12,000-10,000-8,000-6,000-4,000-2,00002,000201420152016201720182019202020212022E2023E2024E2025ELostLNGproductionLostoilproduction0%5%10%15%20%25%20102011201220132014201520162017201820192020TopProjectsIRRandrenewablesIRRbyyearofprojectsanctionOffshoreoilLNGSolarOnshorewindOffshorewindSource:GoldmanSachsGlobalInvestmentResearchSource:GoldmanSachsGlobalInvestmentResearchExhibit5:...enhancingcapitalintensity,aslowcarbonenergydevelopmentsarec.2xmorecapexintensivethanhydrocarbons.Capexperﬂowingunitofenergy(US$/GJ)Exhibit6:Weestimatethatanincremental$1.5trnpacapexisneededby2032.Annualinfrastructureinvestmentsfornetzeroby2050(US$tn)050100150200250300350400450NuclearLTONaturalgasCGGTCoal-firedcombustionSolarPVOnshorewindBiomassGeo-thermalNuclearnewbuildOffshorewindHydroCSPCapitalintensityperflowingunitofenergy($/GJ)Capexperflowingunitofenergy-rangeCapexperflowingunitofenergy-GSbasecase0.0%0.5%1.0%1.5%2.0%2.5%-5001,0001,5002,0002,5003,000202120222023202420252026202720282029203020312032203320342035203620372038203920402041204220432044204520462047204820492050Annualinfrastructureinvestemtsforpathconsistentwithglobalnetzeroby2050(US$bn)PowergenerationPowernetworksEnergystorage(batteries)EVandFCEVchargingstationsBiorefineriesIndustry(incl.CCUS)HydrogenplantsBuildingupgrades/retrofitsDACCSasa%ofglobalGDP-RHSLTO:Long-termoperationofexistingnuclearassetsSource:IRENA,EIA,GoldmanSachsGlobalInvestmentResearchSource:GoldmanSachsGlobalInvestmentResearch17March20226GoldmanSachsCarbonomicsExhibit7:ThisEuropeanenergycrisishasastrongseasonalcomponent(winterdemandforgasis>2xhigherthaninsummer)...Averagemonthlynaturalgasconsumption,bcmExhibit8:...thatrequiresLNGimportsandhydrogentocomplementrenewablepowergrowth(especiallysolar)EU27averagemonthlypowergenerationbyfueltyperelativetoannualaverage,rebased01020304050JanFebMarAprMayJunJulAugSepOctNovDecAveragemonthlynaturalgasconsumption,bcmEUItalyGermanySpainFrance30507090110130150170190JanFebMarAprMayJunJulAugSepOctNovDecMonthlypowergenerationbyfuel,relativetoannualaverage(rebased)TotalNaturalGasWindonshoreWindoffshoreSolarCoalEU27Source:Eurostat,GoldmanSachsGlobalInvestmentResearchSource:Eurostat,GoldmanSachsGlobalInvestmentResearchExhibit9:WeanalyzetheglobalLNGprojectpipeline,identifying156mtpa,orc.US$139bnofnewprojectsoverthenext5years...LNGcapexsanctionedincludinginfrastructure(US$bn)Exhibit10:...withaveragefull-cycleeconomicsof$8-10/mcf.Commercialbreakevenbyproject(US$/mcf)0204060801001201401602004200520062007200820092010201120122013201420152016201720182019202020212022E2023E2024ELNGcapexsanctionedincl.infra.(US$bn)BigOilsNOCOthers46810121416182002,0004,0006,0008,00010,00012,000Commercialbreakeven(US$/mcf)Cumulativepeakproduction(kboe/d)QatarLNGExpansionElk/AntelopeLNGSabinePassElbaLNGMambaCameronGoldenPassDriftwoodLakeCharlesCostaAzulCalcasieuPassCameronPlaqueminesCorpusChristiHilliEpiseyoFreeportLNGSakhalinTortueProsperidadeNigeriaLNGGolfinho-AtumArcticCoralFLNGGreaterSunriseLNGAbadiLNGTanzaniaLNGPreludePortArthurScarboroughprojectssanctionedbetween2021-2024Source:GoldmanSachsGlobalInvestmentResearchSource:GoldmanSachsGlobalInvestmentResearchExhibit11:GreenHydrogenisEurope’slong-termsolutiontosecurityofsupply,seasonalstorageandindustrialdemand.Levelizedcostofelectricity-LCOE(US$/MWh)Exhibit12:RePowerEUtargetsa4xupgradetopreviousGreenHydrogenproductionby2030Europe’shydrogenaim(Mtpa)by2030E-50100150200250300$10/mcf$15/mcf$20/mcf$25/mcf$10/mcf$15/mcf$20/mcf$25/mcf$10/mcf$15/mcf$20/mcf$25/mcf$1.5/kgH2$2.0/kgH2$3.0/kgH2$4.0/kgH2$1.5/kgH2$2.0/kgH2$3.0/kgH2$4.0/kgH2$1.5/kgH2$2.0/kgH2$3.0/kgH2$4.0/kgH2GasturbineNGCCGTNGCCGTNG+CCUSGasturbineH2CCGTH2FuelcellH2LCOE(US$/MWh)CapexOtheropexFuelcostCCUS(all-incost)Carbonprice($100/tnCO2)Europeanspotnaturalgas5.6200510152025'Fitfor55'targetREPowerEUproposalEurope'shydrogentarget(Mtpa)by2030ESource:Companydata,GoldmanSachsGlobalInvestmentResearchSource:EUCommission,GoldmanSachsGlobalInvestmentResearch17March20227GoldmanSachsCarbonomicsTherevivalofenergyinvestments:Reversalofaseven-yearunder-investmentperiodfortheenergyindustryTheenergyindustryhasbeenunder-investingsincethepeakin2014,mostlyacrosshydrocarbons,butalsoinrenewables,giventheirhighercapitalintensityperunitofoutputenergy...Webelievethattheenergyindustryhasbeenunder-investingsincethepeakof2014,withinvestmentsintraditionalenergy(oil,gasupstream)falling61%fromthepeakanddrivinga35%reductioninglobalprimaryenergyinvestments,fromUS$1.3trnin2014toUS$0.8trnin2020(asshowninExhibit13).Thefocushasshiftedinrecentyearstoenergysustainability,butwenotethattheoverallgrowthoftheinvestmentsinrenewableswasnotsufﬁcienttocompensatefortheabruptdropininvestmentsinthetraditionalenergyspace,giventhesmallerscaleandhighercapitalintensityperunitofenergyoutput.Exhibit13:Globalenergyinvestmentsaresettoreturntogrowth(11%perannumto2025E)andexceedthehistoricalpeakofUS$2trnpaby2024Energysupplycapexsplitbyfuelandpowersupplysource(US$bn-LHS),andcleanenergy(renewables,biofuels)asa%oftotal(%-RHS)0%5%10%15%20%25%30%05001,0001,5002,0002,5002010201120122013201420152016201720182019202020212022E2023E2024E2025ECleanenergyasa%oftotalEnergycapex(US$bn)Oil&gas-upstreamOil&gas-downstreamCoal-mining&infraBiofuelsCoal&gas-powerNuclearRenewablesNetworksREScapexshare(%)FuelsupplyPowersupplyPrimaryenergycapexisdeﬁnedasthesumofupstreamoil,gas&coal,biofuels,renewablesandnuclear.Source:IEAWEI(historicals),GoldmanSachsGlobalInvestmentResearch17March20228GoldmanSachsCarbonomics...andwebelieveitistimeforthistrendtoreverse,supportingenergyresilienceandsecurityWebelievethattherecentfocusonenergysecurity,resilienceanddiversiﬁcationwilldriveaneweraforenergyinvestments,whichweargueshouldriseabovethehistoricalpeakofUS$2trnpaby2024Etosupporttheglobe’srisingenergyneeds.Thisisdriven,onourestimates,byamajorincreaseinrenewablepowerandnetworksinfrastructurecapexbutalsobytherevivalofcapexintraditionalfuels,inparticularnaturalgas(LNG),requiredtofacilitateamoreresilientandaffordableenergytransition.2020markedtheﬁrstyearinhistorywhenrenewableinvestmentsexceededupstreamoil&gas,whilstweexpectthistrendtocontinue,withcleanenergies(renewablesandbioenergy)maintainingac.25%shareinglobaltotalenergysupplyinvestmentstothemiddleofthisdecade,wenotethatinvestmentsmustalsobesupportedinotherpartsoftheenergyecosystem,primarilynaturalgas(requiredforenergyresilienceandakeytransitionfuel)inthenearterm,networksthroughoutthisdecadeandcleanhydrogenlongerterm.Inoil&gastheunder-investmentisnowstartingtoreverse,particularlyfornaturalgasandLNGWithCO2emissionsonapersistentupwardtrajectorygloballyoverthepastfewyears,investorsaretakingaleadingroleindrivingtheclimatechangedebate,pushingcorporatemanagementofoil&gasproducerstowardincorporatingclimatechangeactionsintheirbusinessplansandstrategy.Thenumberofclimate-relatedshareholderproposalshasmorethandoubledsince2011andthepercentageofshareholdersvotinginfavortripledoverthesameperiod,accordingtoProxyInsight.Thisisreﬂectedinastructuralshiftintheindustry’sscaleofinvestments(capexcommitmentsforlongcycledevelopmentshavefallen45%inthepast6yearscomparedtotheprevioussix)anditsmix(morefocusongasandbrownﬁelddevelopmentsandlessonlong-cyclegreenﬁeldoildevelopments).Accordingtoouranalysis,theresourcelifeofourdatabaseofthelargestoil&gasdevelopmentsintheworld–TopProjects(recoverableresources/production)fallstoc.25yearsin2022Efrom>50yearsin2014,ahalvingsincetheendofthe2004-14‘super-cycle’.YettheeconomicsaremuchhealthierevenunderlowerBrentandgaspriceassumptions,withc.70%oftheundevelopedresourcesproﬁtableataBrentprice<US$60/blvs.only18%in2014,onourestimates.Inourview,thisissymptomaticofthenew‘AgeofRestraint’,withthemarketplacinglowvalueonundevelopedresourcesduetoahighriskpremiumandwiththevalueaccruingtothecompaniesthatcanself-ﬁnancethedevelopmentandmanagetheirriskthroughalargediversiﬁedportfoliowithbeneﬁtsofscale.Webelievethatasthefocusshiftsfromenergysustainabilitytoenergysecurityandaffordability,theenergyindustrywillexperiencearevivalininvestmentstosupportamoreaffordableandinclusiveenergytransition.Whilstwedonotexpectthehydrocarbonindustrytoreturntothelevelofinvestmentsseenin2014,wedobelievethatanormalizationofinvestmentsisunderway,particularlyfornaturalgas.17March20229GoldmanSachsCarbonomicsExhibit14:Underinvestmentinoilandgassince2015hasledtodepletioninoilreserves,consuming25yearsofoilresourcelifesince2014...TopProjectsreservelife,byyearofreportandbreakevenExhibit15:...butwebelieveoilandgascapexshouldrecoverfrom2022E...TopProjectscapexsanctionedinoilbyyear,splitbywinzone051015202530350102030405060201120122013201420152016201720182019202020212022EProduction(mnb/d)Reservelife(years)Producing<$30$30-$40$40-$50$50-$60$60-$70$70-$80$80+Production(RHS)05010015020025020002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022E2023E2024ETotalcapex(US$bn)TraditionalHeavyOilDeepwaterLNGSource:GoldmanSachsGlobalInvestmentResearchSource:Companydata,GoldmanSachsGlobalInvestmentResearchExhibit16:...withgascapex(includingLNG),inparticular,recoveringonourestimates...Totalcapexsanctionedsplitbetweenoil&gas(inc.LNG)relativeto2000-21average(%)Exhibit17:...drivenprimarilybyLNGcapexLNGcapexsanctionedincludinginfrastructure(US$bn)-100%-50%0%50%100%150%200%250%20002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022E2023E2024ETotalcapexsanctionedsplitbetweenoil&gasrelativeto2000-21avearge(%)Oil(incl.heavyoil,deepwater,traditional,exploitation,ex.Russia)Naturalgas(incl.LNG,traditional,ex.Russia)0204060801001201401602004200520062007200820092010201120122013201420152016201720182019202020212022E2023E2024ELNGcapexsanctionedincl.infra.(US$bn)BigOilsNOCOthersSource:GoldmanSachsGlobalInvestmentResearchSource:GoldmanSachsGlobalInvestmentResearch17March202210GoldmanSachsCarbonomicsInvestmentdecisionshavebeenatahistoricaltrough,taking10/3mboe/dofoil/LNGoutof2025EsupplyInExhibit18,weshowlostoilproductioninthefutureowingtoFIDdelayssincethebeginningofthepreviousoilpricedownturnbylookingatourcurrentTopProjectsoilandLNGproductionestimatesversusourinitialexpectationsin2014.WithoilpricesfallingsincetherecoveryfromthepreviousdownturnandNOCs/internationalE&Psretreatingtotheirdomesticbasinstofocusonbalancesheetmanagement,anumberofprojectFIDshavebeendelayed,translatinginto3/10mboe/doflostLNG/oilproductionin2024-25,onourestimates.Thiswasexacerbatedbythemacrocommoditydownturnin2020,whichcameatatimewhenwehadpreviouslyexpectedacatch-upintheprojectFIDspipelinefromtheindustryandwhichprolongedprojectsanctionsdelaysforanothertwoyears.ThishasstartedtonotablycontributetoamuchtightermarketforbothoilandLNG,asindicatedbythestructurallyhighercommoditypricesweareexperiencingatpresent.Webelievethatthistrendisinneedofreversal,andExhibit19showsthattheramp-uppaceoflong-cyclemegaprojectoilproductionislikelytoacceleratemoderatelyfromhere,backtoc.0.3-0.6mnbl/dfrom2022E.Exhibit18:Delayedinvestmentdecisionsonlong-cycledevelopmentstakec.10/3mnboepdoutof2025Eoil/LNGsupply...TopProjectslostLNG,offshoreandonshoreoilproductionfromlong-cycledevelopments;TopProjects2021vs.2014expectationsExhibit19:...butmoderategrowthmustbefacilitatedfromhere,albeitremainingbelow2015-18levelsYoYoilproductiongrowth(kboe/d)fromnon-OPEC,excludingRussia,shaleprojects(excludingimpactofshut-ins)andnetproductiongrowthincludingproductionshut-insimpact-12,000-10,000-8,000-6,000-4,000-2,00002,000201420152016201720182019202020212022E2023E2024E2025ELostLNGproductionLostoilproduction-900-700-500-300-1001003005007009001,1001,3001,50020152016201720182019202020212022E2023E2024E2025E2026EBrazilCanadaUSNorwayKazakhstanGuyanaOthersAzerbaijanNeyyoyproductiongrowthProductioncallonTopProjectsover2015-18forflatnon-OPEC,ex-shaleoilproductionSource:GoldmanSachsGlobalInvestmentResearchSource:GoldmanSachsGlobalInvestmentResearch17March202211GoldmanSachsCarbonomicsAsustainableenergyfuturecallsforamajoraccelerationincleanenergyinvestments,drivingcapexupsidefromhereWhilstinvestmentsincleanenergy(renewablesandbioenergy)havebeentrendinghigher,webelieveamajoraccelerationisrequired,aslowcarbonenergytechnologiesrequire2-3xthecapexperunitofoutputenergycomparedtothehydrocarbonstheydisplaceThecostofcapitalfornewcleanenergyprojectscontinuesonadownwardtrajectory,improvingtheaffordabilityandcompetitivenessofcleanenergy.Onthecontrary,ﬁnancialconditionskeeptighteningforlong-termhydrocarbondevelopments,creatinghigherbarrierstoentry,loweractivity,andultimatelyloweroil&gassupplyinourview.Greeninfrastructurewillplayamajorroleinthefutureofenergyinvestments,withcleantechnologiesingeneral(globalaveragecosts)beingmorecapitalintensiveonaveragecomparedtothetraditionalenergy(hydrocarbon)theydisplace,butalsobeneﬁtsfromamuchlowercostofcapitalundertherightregulatoryframework,makingitastrongexampleofasuccessfulpro-growthpro-environmentpublic-privatepartnership.Investmentsinlowcarbonaretobefurtheracceleratedbytheneedforenergydiversiﬁcationandlowercarbonintensity.Moreover,weestimatethatonaverage,cleantechnologies(renewablesinpowergenerationandelectricmobility)requirec.2-3xthecapexperunitofoutputenergycomparedtothetraditionalhydrocarbonsourcesandtechnologiestheydisplace,furtherexacerbatingtheneedforhigherinvestmentstosupportgrowingenergydemand.Exhibit20:Thebifurcationinthecostofcapitalforhydrocarbonsvs.renewableenergydevelopmentsiswidening,onthebackoninvestorpressureforde-carbonizationTopProjectsIRRforoil&gasandrenewableprojectsbyyearofprojectsanction80100120140dbythepremiumvetorenewablesCO2)0%5%10%15%20%25%20102011201220132014201520162017201820192020TopProjectsIRRandrenewablesIRRbyyearofprojectsanctionOffshoreoilLNGSolarOnshorewindOffshorewindSource:GoldmanSachsGlobalInvestmentResearch17March202212GoldmanSachsCarbonomicsIntheexhibitsthatfollow,wepresentthecapitalintensity(capex)perunitofoutputenergyforeachtypeofpowergenerationandtransporttechnologies.Wepresenttheresultsbothinunitsofcapexperﬂowingunitofenergy(US$/GJofpeakenergycapacity)andperunitofenergyoverthelifeoftheasset(US$/GJ).Thisshowshighercapitalintensityperunitofenergyaswemovetocleaneralternativesforpowergenerationandtransport.Thishoweverdoesnotnecessarilytranslateintohighercostsfortheconsumer,thankstotheavailabilityofcheapﬁnancing(underanattractiveandstablelong-termregulatoryframework)andloweropex,comparedtotraditionalhydrocarbondevelopments.Exhibit21:Allrenewablecleantechnologiesinpowergenerationhavehighercapitalintensitycomparedtotraditionalfossilfuelsourcesbasedonperﬂowingunitofenergy...Capexperﬂowingunitofenergy(US$/GJ)Exhibit22:...andoverthelifetimeoftheassetCapexperunitofenergyoverthelifeoftheasset(US$/GJ)foreachtechnology050100150200250300350400450NuclearLTONaturalgasCGGTCoal-firedcombustionSolarPVOnshorewindBiomassGeo-thermalNuclearnewbuildOffshorewindHydroCSPCapitalintensityperflowingunitofenergy($/GJ)Capexperflowingunitofenergy-rangeCapexperflowingunitofenergy-GSbasecase0246810121416NaturalgasCGGTCoal-firedcombustionSolarPVOnshorewindBiomassGeo-thermalNuclearnewbuildOffshorewindHydroCSPCapitalintensityperunitofenergyoverthelifetimeoftheasset($/GJ)Capexperunitofenergyoverassetlife-rangeCapexperunitofenergyoverassetlife-GSbasecaseLTO:LongtermoperationofexistingnuclearassetsSource:IRENA,EIA,GoldmanSachsGlobalInvestmentResearchSource:IRENA,EIA,GoldmanSachsGlobalInvestmentResearchExhibit23:Similarly,intransport,cleantechnologyalternativeshaveahighercapitalintensitythantheirequivalenttraditionalfossil-fueltechnologiesperunitofﬂowingoutputenergy...Capexperﬂowingunitofenergy(US$/GJ)Exhibit24:...andperunitofenergyoverthelifetimeofthetechnology.Capexperunitofenergyoverthelifeoftheasset(US$/GJ)foreachtechnology05001,0001,5002,000ICEpassenger,oilICEpassenger,biofuelEVpassenger,renewableelectricitymixEVpassenger,solarPVelectricityEVpassenger,onshorewindelectricityEVpassenger,offshorewindelectricityICEtruck,light-dutyEVtruck,light-duty,renewableelectricityCapitalintensityperflowingunitofenergy($/GJ)Capexperflowingunitofenergy-rangeCapexperflowingunitofenergy-GSbasecase050100150200ICEpassenger,oilICEpassenger,biofuelEVpassenger,renewableelectricitymixEVpassenger,solarPVelectricityEVpassenger,onshorewindelectricityEVpassenger,offshorewindelectricityICEtruck,light-dutyEVtruck,light-duty,renewableelectricityCapitalintensityperunitofenergyoverassetlife($/GJ)Capexperunitofenergyoverassetlife-rangeCapexperunitofenergyoverassetlife-GSbasecaseSource:EIA,GoldmanSachsGlobalInvestmentResearchSource:EIA,GoldmanSachsGlobalInvestmentResearch17March202213GoldmanSachsCarbonomicsThepathtonextzero:Mobilizinganextra$2trnperannuminlowcarboninvestmentsacrosslowcarbontechnologiesandnetworkinfrastructureInaggregate,weestimateatotalinvestmentopportunityincleantechinfrastructureofUS$56trnby2050inourpathtoglobalnetzeroby2050(GS1.5°),asoutlinedinourCarbonomics:NetZeroframework.Thisﬁgurefocusessolelyonincrementalinfrastructureinvestmentsanddoesnotincludemaintenanceandotherend-usecapex.Overall,theaverageannualinvestmentsinde-carbonizationthatweestimateover2021-50arec.US$1.9trn,withthepeakin2036(US$2.9trn)representing2.3%ofglobalGDP(vs.US$1.6trnpawithapeakofUS$2.5trnin2041intheGS<2.0°scenario).Weestimatethatc.50%ofde-carbonizationisreliantonaccesstocleanpowergeneration,includingelectriﬁcationoftransportandvariousindustrialprocesses,electricityusedforheatingandmore.Overall,weexpecttotaldemandforpowergenerationinaglobalnetzeroscenarioby2050toincreasethree-fold(vs.thatof2019)andsurpass70,000TWhasthede-carbonizationprocessunfolds.BasedonourGS1.5°model,powergenerationalmostentirelyde-carbonizesby2040(2055undertheGS<2.0°scenario).Exhibit25:WeexpectUS$56trnofinfrastructureinvestmentstoglobalNetZerocarbon...CumulativeinfrastructureinvestmentopportunityforourGS1.5°globalnetzeroby2050model(US$tn)Exhibit26:...reaching>2%ofGDPby2032inthe1.5°scenarioAnnualinfrastructureinvestmentsfornetzeroby2050(US$tn)8.48.55.03.31.11.01.86.62.14.12.11.95.72.61.00.856.0-102030405060RenewablepowerNGpower(incl.CCUSretrofit)NuclearpowerPowernetworksEnergystorage(batteries)Trans.infra.(EVs,FCEVs)Bio-fuelsH2plantsIndustryincl.CCUSBuildings(heatpumps,hydrogenpipelines)DACCSNat.sinksCum.GS1.5ºpathinvestmentsto2050Globalcumulativeinvestmentsfornetzeroby2050(US$tn)SolarPVOnshorewindOffshorewindHydroelectric0.0%0.5%1.0%1.5%2.0%2.5%-5001,0001,5002,0002,5003,000202120222023202420252026202720282029203020312032203320342035203620372038203920402041204220432044204520462047204820492050Annualinfrastructureinvestemtsforpathconsistentwithglobalnetzeroby2050(US$bn)PowergenerationPowernetworksEnergystorage(batteries)EVandFCEVchargingstationsBiorefineriesIndustry(incl.CCUS)HydrogenplantsBuildingupgrades/retrofitsDACCSasa%ofglobalGDP-RHSSource:GoldmanSachsGlobalInvestmentResearchSource:GoldmanSachsGlobalInvestmentResearch17March202214GoldmanSachsCarbonomicsAwinterenergycrisis:TheimperativeneedforseasonalenergystoragetosupportreliabilityArapidswitchfromnaturalgastorenewablepowerandtheriseofelectriﬁcationintheabsenceofenergystorageinfrastructureposesriskstoenergyreliabilityInthecontextofthecurrentgeopoliticaldevelopments,naturalgaspricesandsupplyuncertainties,policymakersarefocusedonreducingrelianceonnaturalgasthroughacceleratingtherenewablesroll-out(windoffshore,onshoreandsolar),especiallyinEurope.BasedonourCarbonomicsCostCurveanalysis,powergenerationcurrentlydominatesthelowendofthecarbonabatementcostspectrum,withrenewablepowertechnologiesalreadydevelopedatscaleandcostshavingfallenrapidlyoverthepastdecade,makingthemcompetitivewithfossilfuelpowergenerationtechnologiesinmanyregionsglobally.However,renewablepowergenerationsuffersfromtwokeyproblemsthatneedtobeaddressed:intermittencyandseasonality.Inthechartsthatfollow,weemphasizetheseasonalnatureofnaturalgasconsumption,withEUaveragemonthlyconsumptionofc.20bcminJun/July/Augvs.c.45-50bcminDec/Jan/Feb.Further,weshowthesigniﬁcantlyhigherseasonalityofpowergenerationbysolarandwindcomparedtonaturalgasandcoalbothattheEUlevelandatthecountrylevel,highlightingGermanyandSpainspeciﬁcally.Exhibit27:European(EU27)naturalgasconsumptioninwintermonthsisonaveragec.2.5xthatofsummermonths...Averagemonthlynaturalgasconsumption,bcmExhibit28:...requiredtomeetgrowingseasonalpowerdemandandaddressthecounter-seasonalityofrenewablepower(inparticularsolar),whichtroughsattimesofpeakdemand.EU27averagemonthlypowergenerationbyfueltyperelativetoannualaverage,rebased01020304050JanFebMarAprMayJunJulAugSepOctNovDecAveragemonthlynaturalgasconsumption,bcmEUItalyGermanySpainFrance30507090110130150170190JanFebMarAprMayJunJulAugSepOctNovDecMonthlypowergenerationbyfuel,relativetoannualaverage(rebased)TotalNaturalGasWindonshoreWindoffshoreSolarCoalEU27Source:Eurostat,GoldmanSachsGlobalInvestmentResearchSource:Eurostat,GoldmanSachsGlobalInvestmentResearch17March202215GoldmanSachsCarbonomicsAsthegrowthinrenewablepoweraccelerates,intradayandseasonalvariabilityhastobeaddressedthroughenergystoragesolutions.Toreachfullreplacementofcoalandnaturalgasandde-carbonizationofpowermarkets,webelievetwokeytechnologieswilllikelycontributetosolvingtheenergystoragechallenge:utility-scalebatteriesandhydrogen,eachhavingacomplementaryrole.Weincorporatebothofthesetechnologiesinourpathtonetzero.Energystorageandtheneedforextensivenetworkinfrastructureareparticularlyimportantconsiderationsasdemandforpowergenerationgrowthaccelerates,toensurearesilientglobalenergyecosystem.Whilebatteriesarecurrentlythemostdevelopedtechnologyforintradaypowergenerationstorage,weconsiderhydrogenasamorerelevanttechnologyforseasonalstorage,implyingtheneedforinnovationanddevelopmentofbothtechnologies.Batteries,forinstance,areparticularlysuitedtosunnyclimates,wheresolarPVproductionislargelystablethroughouttheyearandcanbestoredforeveningusage.Hydrogenontheotherhand,andtheprocessofstoringenergyinchemicalformandreconvertingittopowerthroughfuelcells,couldbeusedtooffsettheseasonalmismatchbetweenpowerdemandandrenewableoutput.Untiltherelevantenergystorageinfrastructure(networksandsmartgrids)andtechnologies(utilityscalebatteriesandhydrogen)arereadytosupportanincreasinglyelectriﬁedenergyeconomy,wearguethatbothnaturalgasandnuclearpowerhavearoletoplayintheneartermtoenableasmoothenergytransitionandhelpavoidapowercrunch.Exhibit29:InGermany,theseasonalityinpowergenerationbysolarandwindishigherthantheEUaverage,makingtheneedforseasonalenergystorageofcriticalimportance.Germanyaveragemonthlypowergenerationbyfueltyperelativetoannualaverage,rebasedExhibit30:InSpain,widersolaravailabilitymakesrenewablepowerrelativelylessseasonallyvariedcomparedtotheEUaverageSpainaveragemonthlypowergenerationbyfueltyperelativetoannualaverage,rebased1030507090110130150170190JanFebMarAprMayJunJulAugSepOctNovDecMonthlypowergenerationbyfuel,indexedtoyearlyaverageTotalNaturalGasWindSolarCoalGermany1030507090110130150170190JanFebMarAprMayJunJulAugSepOctNovDecMonthlypowergenerationbyfuel,indexedtoyearlyaverageTotalNaturalGasWindSolarCoalSpainSource:Eurostat,GoldmanSachsGlobalInvestmentResearchSource:Eurostat,GoldmanSachsGlobalInvestmentResearch17March202216GoldmanSachsCarbonomicsSolvingforEurope’senergycrisis:LNGcapexandcapacityreturningtogrowthatatimeofneedREPowerEU:ApolicyboostforLNGandhydrogenTheEuropeanCommissionhaspublishedanoutlineofthe‘REPowerEU’planaimedatreducingEurope’sdependencyonRussianfossilfuelsbeforetheendofthisdecade(2030)inlightofrecentgeopoliticalevents.Theplanoutlinesasetofjointactionswhichcouldunlockamoreaffordable,secureandsustainableenergyfortheregion,respondingtorisingenergypricesinEuropewithafocusonreplenishinggasstocksfornextwinterbutalsodiversifyinggassupplies,speedinguptheroll-outofrenewablegasesandreplacinggasinheatingandpowergeneration.TheEUCommissionproposestodevelopaREPowerEUplanthatwillincreasetheresilienceoftheEU-wideenergysystembasedondiversifyinggassuppliesviahigherLiqueﬁedNaturalGas(LNG)andpipelineimportsfromnon-Russiansuppliers,andlargervolumesofbiomethaneandrenewablehydrogenproductionandimports.TheREPowerEUplanaimstoremoveatleast155bcmoffossilgasuse,whichistheequivalentofthevolumeimportedfromRussiain2021.Twothirdsofthereductionisaimedby2022.Wesummarizebelowthesourcesofgasdiversiﬁcationaccordingtotheproposal:Exhibit31:REPowerEUsummarygraphicSource:EuropeanCommission,GoldmanSachsGlobalInvestmentResearch17March202217GoldmanSachsCarbonomicsThelasttwoyearshavebeencharacterizedbycapitaldisciplineacrosstheindustry,withFIDpostponementsandcapitalexpenditurereductionsasaresultofCOVID-19.Capexin2021remainedatverylowlevelsfortheindustry,bothinoilandLNG.OurTopProjectsanalysissuggeststhataggregatecapexin2021increasedby6%comparedto2020yetremainedc.31%/16%below2015/2016levels,respectively,duringthepreviouscommoditydowncycle,andsufferedamoreabruptchangeastheindustryreactedquickertorebasecapexlevelslower.In2022,weanticipatetheoveralllevelofTopProjectscapextoincreasebyc.13%yoy,yettoremainwellbelowthehistoricalandnormalizedlevels(-12%vs2019).Lookinginto2022-2024,weseeLNGasalikelyareaofcapexincreases;thisisprimarilyowingtoalreadycommittedcapexthatislargelyspentandrampinguponLNGprojectssanctionedoverthepast2-3years,manyofwhichfaceddelaysduringthe2020downturn.Ashighlightedearlierinthisreport,LNGbeneﬁtsfromamuchlowercostofcapital,makingitastrongerareaofcapexgrowththatispro-environmentandalignswithEurope’splantodiversifyawayfromRussianoilandgasintheshort-to-mediumterm.OurTopProjectsanalysisindicatesanewwaveofLNGprojectscomingatverycompetitivecostlevelsrelativetohistory(US$1.0-2.1bn/mtpain2022-2025EvsUS$4.0bn/mtpain2015-16)asshowninExhibit33andwithprojectsinQatar,CanadaandtheUS,amongothers,contributingtoasigniﬁcantlylowercostcurvein2022vs2014.Exhibit32:TheLNGmarketissettoreturntocapacitygrowthpost2022E,withmostofthesupplyadditionscomingin2025-26E.AnnualincreaseinLNGproductionandcapacityinmtpaExhibit33:ThenewwaveofLNGprojectsiscomingataverycompetitivecostrelativetohistory...TopProjectscapexperﬂowingLNGoutput,US$bnpermtpa0510152025303540452010201120122013201420152016201720182019202020212022E2023E2024E2025E2026EmtpaCapacityadditionProductiongrowth0.00.51.01.52.02.53.03.54.04.52010201120122013201420152016201720182019202020212022E2023E2024ECapexperflowingLNGincludinginfra.(US$bn/mtpa)Source:GoldmanSachsGlobalInvestmentResearchSource:GoldmanSachsGlobalInvestmentResearch17March202218GoldmanSachsCarbonomicsExhibit34:...contributingtoanaccelerationinLNGcapexcommitmentsLNGcapexsanctionedincl.infrastructure(US$bn)Exhibit35:Qatar,CanadaandtheUSamongothersarecontributingtocapacitygrowthgiventheirlowcostpositioningLNGcostcurvebyregioninTopProjects2022vs.20140204060801001201401602004200520062007200820092010201120122013201420152016201720182019202020212022E2023E2024ELNGcapexsanctionedincl.infra.(US$bn)BigOilsNOCOthersQatarCanadaMexicoUSCameroonMozambiqueSenegalNigeriaTanzaniaPapuaNewGuineaRussiaAustraliaIndonesiaYemenMozambiqueUSRussiaPapaNewGuineaTanzaniaAngolaCanadaIsraelAustraliaNigeriaIndonesia3579111315171902,0004,0006,0008,00010,00012,000Commercialbreakeven(US$/mcf)Cumulativepeakproduction(kboe/d)20222014Source:GoldmanSachsGlobalInvestmentResearchSource:Companydata,GoldmanSachsGlobalInvestmentResearchExhibit36:LNGprojectssanctionedbetween2021and2024displaycompetitivebreakevens,placingthemonthelowerendofourLNGcostcurveCommercialbreakevenbyproject(US$/mcf)46810121416182002,0004,0006,0008,00010,00012,000Commercialbreakeven(US$/mcf)Cumulativepeakproduction(kboe/d)QatarLNGExpansionElk/AntelopeLNGCanadaSabinePassElbaLNGMambaCameronGoldenPassDriftwoodLakeCharlesCostaAzulCalcasieuPassCameronPlaqueminesCorpusChristiHilliEpiseyoFreeportLNGSakhalinTortueProsperidadeNigeriaLNGGolfinho-AtumArcticLNG-2CoralFLNGGreaterSunriseLNGAbadiLNGTanzaniaLNGPreludePortArthurScarboroughprojectssanctionedbetween2021-2024Source:GoldmanSachsGlobalInvestmentResearch17March202219GoldmanSachsCarbonomicsSolvingforEurope’senergycrisis:ThegreenhydrogenrevolutionWebelievetherecentgeopoliticaleventshavechangedtheEU’spriorityinrelationtoitsenergypolicy,withtheEuropeanCommissionpublishingthe‘REPowerEU‘planlastweek(March8th)outliningasetofjointactionstoreduceEurope’sdependenceonRussiangasimportsandunlockincreasedinvestmentsandreformsformoreaffordable,sustainableandsecureenergysupply.Whiletheenergypolicyfocusappearstohaveshiftedtoenergysecurity,onekeyprioritywhichremainsintactandisgainingmomentumfortheEUistheneedtoacceleratetherenewablesbuild-upandelectriﬁcation,aswellasfast-tracktheroll-outofrenewablegases:hydrogenandbiogas.Green(renewable)hydrogenisidentiﬁedasacriticaltechnologyinhelpingtounlockfurtherdiversiﬁcationawayfromnaturalgasinthecomingyears;theproposalincludesanotableupgradeofthe‘Fitfor55’targetof5.6Mtofrenewablehydrogenby2030to20Mtoverthesametimeframebasedonacombinationoflocallyproducedandimportedvolumes.Thisrepresentsa>3.5xupwardrevisionofanalreadyambitioustargetfortheregionandcanaidthereplacementof25-50bcmpaby2030,representingc.16%-32%ofimportedRussiangasvolumes,accordingtothedocument.WeoutlinebelowthekeyrolewebelievethetechnologywillplayinenhancingEurope’senergysecurityandenergyresilience:n(1)Thepushforelectriﬁcationandrenewablepoweracceleratestheneedforseasonalenergystoragewithgreenhydrogentheoptimalsolution,webelieve:Wehavepreviouslyargued(seehere)thatgreenhydrogenishighlyinterconnectedwithrenewablepower,actingasakeyenablerofhigherrenewablepowerpenetrationandelectriﬁcation.Itsroleasatransformationaldriverforthepowerindustryliesinitsabilitytoactasthecleanenergyvectorforseasonalenergystorage,providingbufferandresilienceinanincreasinglyelectriﬁedeconomy.AsrenewablepowerincreasesitsshareinEurope’senergymix,theissuesofintermittencybutalsoseasonalityarebecomingmoreprominent,especiallyaselectriﬁcationgainsmomentuminheating,resultinginlargepowerdemandvariationsacrossseasons.Whilebatteries,super-capacitorsandcompressedaircanalsosupportbalancing,theylackthepowercapacityorthestoragetimespanneededtoaddressseasonalimbalances,leavinghydrogenasthekeyseasonalenergystoragesolutiontosupportanincreasinglyelectriﬁedenergyecosystem.Electrolysiscanconvertexcesselectricityintohydrogenintimesofpoweroversupplyandtheproducedhydrogencanthenbeusedtoprovideback-uppowerduringperiodsofpowerdeﬁcits,preventingpowercrunchesandenhancingtheenergysystem’sresilience.n(2)Renewablehydrogenandbiogasarethenaturalsuccessorsoffossilgasfordiversiﬁcationofenergysupplyinenergy-intensiveindustrialprocesses:Weviewhydrogenandbiogasasthekeynaturalsuccessorsofnaturalgasinhigh-temperatureindustrialprocesses.Around30%ofEurope’s(EU27+UK)naturalgasdemandstemsfromindustrialprocessesincludingsteel,chemicalplants,cementandothers.Giventhehighenergyintensity(temperatures)requiredfor17March202220GoldmanSachsCarbonomicsmanyoftheseprocesses,directelectriﬁcationisoftennotfeasible,makinghydrogenandbiogasthetwonaturalmolecularsuccessorsforthedisplacementoffossilgas.Hydrogenblendinginnaturalgasnetworkshasalreadystarted,albeittoasmallextent,andwebelievethisislikelytoaccelerateinthecomingyearsasEuropeintensiﬁesitseffortstodiversifyitsenergysupply.Thiscanleadtoaprofoundreconﬁgurationofthegasgridinfrastructurelongerterm.(3)HigherspotEUnaturalgaspricestiltthescaleinfavourofgreenn(renewable)vsblueandgrey(naturalgas-based)hydrogen,providingupsideforinstalledelectrolysiscapacityandtechnologicalinnovation:AtcurrentspotEuropeangasprices,greenhydrogenisalreadyachievingcostparitywithgrey(fossil-based)hydrogeninkeypartsofEurope(greenhydrogenprojectswithlow-costrenewablepowerrelyingonPPAsnotexposedtothepowerpricevolatility).Thisistiltingthescaleinfavourofgreenvsgreyandbluehydrogenleadingtoupsidetotheglobalinstalledelectrolysiscapacityestimatesandencouragingfurthertechnologicalinnovationontheelectrolysisspace.Exhibit37:EU’senergysecurityproposalaimstoaddress(reduceby2/3)EU’sdependenceonRussianenergyimports(speciﬁcallygas)...Europeannetgasimports(EUR27+UK)andshareofEuropeangasimportsfromRussia(%)Exhibit38:...withRussiahavingaccountedfor>40%ofEU27+UK’sgaseousimportsin2020ShareofRussiangasimportsasa%oftotalnetgasimportvolumes0%10%20%30%40%50%60%70%80%0501001502002503003504004501990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020NaturalgasnetimportstoEU(bcm)NaturalgasnetimportstoEU28ShareofEU28gasimportsfromRussia11111111112222222222222222222220%20%40%60%80%100%SlovakiaNorthMacedoniaBosniaandHerzegovinaMoldovaSerbiaCzechiaEstoniaFinlandHungaryBulgariaPolandGermanyItalyLithuaniaRomaniaTurkeyGreeceNetherlandsLuxembourgFranceSloveniaSpainBelgiumUnitedKingdomPortugalDenmarkIrelandShareofRussiagasimportsasa%oftotalgasimports20002020Source:Eurostat,GoldmanSachsGlobalInvestmentResearchSource:Eurostat,GoldmanSachsGlobalInvestmentResearch17March202221GoldmanSachsCarbonomicsExhibit39:Europe’s(EU27+UK)naturalgasdemandstemsfromthreekeyindustries:(a)industry,(b)powergeneration,and(c)buildings(commercialandresidential,primarilyforheating)...EU27+UKnaturalgasdemandbysector(2020,%)Exhibit40:...andgreenhydrogencanhelpaddresseachoftheseareasthroughitsabilityto(a)actasanenergyfuelandfeedstockforkeyhard-to-electrifyindustrialprocesses,(b)provideasolutionforseasonalenergystorage,and(c)blendinexistingnaturalgasnetworksandgridsGlobalhydrogendemand(MtH2)underthethreeGSnetzeromodelsPowergeneration28%Industry&other30%Residential31%Commercial11%Other42%PowergenerationIndustry&otherResidentialCommercial1230100200300400500600202020252030203520402045205020202025203020352040204520502020202520302035204020452050BullscenarioBasescenarioBearscenarioGlobalhydrogendemand(MtH2)RefiningAmmoniaMethanolIron&SteelTransport-LDVsTransport-HDVs(trucks,inclbuses)Transport-RailTransport-ShippingTransport-AviationGridblending(heatingindustrial&buildings)PowergenerationGlobalnetzeroby2060-<2.0ºBasescenarioGlobalnetzeroby2070-2.0ºBearscenarioGlobalnetzeroby2050-1.5ºBullscenarioc.6-7xc.4xc.2xSource:EurostatFormoredetailsonourscenarios,seehere.Source:GoldmanSachsGlobalInvestmentResearch17March202222GoldmanSachsCarbonomicsGreenhydrogenakeyenablerofelectriﬁcation,unlockingseasonalenergystorageandhavinggridbuffercapabilitiesHydrogencurrentlyhasanicheroleinpowergeneration.However,aspowergenerationundergoesacompletetransformation,hydrogencouldemergeasacriticaltechnologyinthisindustry,complementingrenewablepowerasitunlocksseasonalenergystoragecapabilitiesandenhancestheresilienceofanincreasinglyelectriﬁedenergysystem.Theroleofpowergenerationis,inourview,onlylikelytoincreaseinthecomingdecades,asthepenetrationandpaceofelectriﬁcationrapidlyincreaseacrosssectors(includingroadtransport,buildingheating,industrialmanufacturingprocessesandlow-temperatureindustrialheat)astheyprogressivelyfollowtheirownde-carbonizationpath.Acceleratedelectriﬁcationofheatingislikelytoresultinlargepowerdemandandsupplyimbalances,makingtheroleofamolecularseasonalenergystoragesolutionvital.Weidentifythreekeyrolesofcleanhydrogeninthepowergenerationindustrythatcanenhancesystemresilienceandenablehigheruptakeofrenewablepower:(a)Large-scaleseasonalenergystorage:Webelievehydrogenwillbethepreferredsolutionforlong-termenergystoragerequiredtobalancetheseasonalvariationofpowergenerationdemand;particularlyimportantisthatelectricitythroughheatpumpsforresidentialheatingbecomesamoreprominentfeatureandrisesinshareintotalpowergenerationdemand.Whilebatteries,super-capacitors,andcompressedaircanalsosupportbalancing,theylackthepowercapacityorthestoragetimespanneededtoaddressseasonalimbalances,asoutlinedbytheHydrogenCouncilandshowninExhibit41.Whilepumpedhydroinparticularoffersanalternativetohydrogenforlarge-scale,long-termenergystorageandhasbeentodatethepreferredpowerstoragesolution,accountingformorethan95%ofglobalpowerstorage,itsremaininguntappedpotentialissubjecttolocalgeographicconditions.Thekeydisadvantageofhydrogen-basedstorageoptionsremainsitslowround-tripefﬁciency,withtheprocessofelectrolysisandthenconversionofhydrogenbacktoelectricityconsumingc.60%ofthetotalenergy.Yetgiventheabundanceofthemolecule(mostabundantintheuniverse),webelievethat,intheabsenceofalternativemolecular,cleanseasonalenergystoragesolutions,lowerefﬁciencyshouldnotbeaconstraintforitswideradoption.17March202223GoldmanSachsCarbonomics(b)Flexiblepowergeneration:Hydrogen-ﬁredgasturbinesandcombined-cyclegasturbinescouldbeusedasasourceofﬂexibilityinelectricitysystems(substitutingnaturalgas)withincreasingsharesofvariablerenewableenergy(VRE)aidingtheintermittencyproblem.Fuelcellscanalsobeusedwithelectricalefﬁcienciestypicallyexceeding50%-60%(similartothoseofturbines),andthestationaryfuelcellsmarkethasbeengrowingsteadilyoverthepastdecade.However,fuelcellstypicallyhaveshortertechnicallifetimesthangasturbinesandsmallerpoweroutput,makingthemmoresuitedtodistributedpower.Inthepowersector,thetimingofvariableelectricitysupplyanddemandisnotwell-matched,requiringadditionaloperationalﬂexibility.Variousoptionsexisttoresolvethisintermittencyissuesuchasgridinfrastructureupgradesortechnologiesforshort-orlonger-termbalancingofsupplyanddemand(dynamicpowernetworks),ﬂexibleback-upgeneration,demand-sidemanagement,orenergystoragetechnologies.GiventhecurrentfocusonreducingEuropeannaturalgasdemand,hydrogen-ﬁredturbinescanhelpcomplementrenewablepowerinthepowermix,withspotnaturalgaspricesinEuropealreadymakinggas-basedCCGTsandgasturbineslesscostcompetitivecomparedtolow-costgreenhydrogen(producedwithRESﬁxedPPAswithLCOE<US$30/MWh).Exhibit41:Hydrogencouldbetheoptimalsolutionforlarge-scale,long-durationenergystorage,particularlyfordischargedurationsbeyond50hoursCapacityvsdischargedurationforenergystorageSource:HydrogenCouncil17March202224GoldmanSachsCarbonomics(c)Buffer,back-upandoff-gridpowersupply:Hydrogenhasvaluableattributesthatcouldmakeitakeysolutionforpowergenerationsystemback-upaselectrolysiscanconvertexcesselectricityintohydrogenduringtimesofoversupply.Theproducedhydrogencanthenbeusedtoprovideback-uppowerduringpowerdeﬁcitsorcanbeusedinothersectorssuchastransport,industryorresidential.Hydrogenoffersacentralizedordecentralizedsourceofprimaryorback-uppower.Inaddition,electrolyzersmayprovideancillaryservicestothegrid,suchasfrequencyregulation.Fuelcellstherefore,incombinationwithstorage,arelikelytobeconsideredacost-effectivedecarbonizationalternativetodieselgeneration(currentlyoftendeployedforback-uppower).Exhibit42:Hydrogenturbinesandfuelcellscanbeusedforloadbalancing;theyarebecomingincreasinglycompetitivegiventhehighspotEUgaspricesLevelizedcostofelectricity-LCOE(US$/MWh)-50100150200250300$10/mcf$15/mcf$20/mcf$25/mcf$10/mcf$15/mcf$20/mcf$25/mcf$10/mcf$15/mcf$20/mcf$25/mcf$1.5/kgH2$2.0/kgH2$3.0/kgH2$4.0/kgH2$1.5/kgH2$2.0/kgH2$3.0/kgH2$4.0/kgH2$1.5/kgH2$2.0/kgH2$3.0/kgH2$4.0/kgH2GasturbineNGCCGTNGCCGTNG+CCUSGasturbineH2CCGTH2FuelcellH2LCOE(US$/MWh)CapexOtheropexFuelcostCCUS(all-incost)Carbonprice($100/tnCO2)Europeanspotnaturalgasprices2023ESource:Companydata,GoldmanSachsGlobalInvestmentResearch17March202225GoldmanSachsCarbonomicsHydrogenthenaturalsuccessorofnaturalgasfordiversiﬁcationofenergysupplyinenergy-intenseindustrialprocessesHighernaturalgaspricesleadtogreenhydrogencostparitywithgrey(natural-gasbased)acrosskeypartsofEurope,pushingforwardtheﬁrstlegofthegreenhydrogenrevolution:thesubstitutionofgreyhydrogeninexistingindustrialapplicationsIndustrialuseofnaturalgasaccountsforc.30%ofEurope’stotalnaturalgasconsumption,asthecommodityisusedasbothafuel(forenergyuse)andasafeedstock(primarilyforchemicals)acrossindustrialprocesses.Whilemanyoftheseindustrialsub-segmentscouldpotentiallybeelectriﬁed(machinerymanufacturing,transportequipment,textiles,food,beverages&tobacco),>50%oftheregion’snaturalgasconsumptionstemsfromheavyindustries,typicallyrequiringhighoperatingtemperaturesmakingdirectelectriﬁcationunfeasible.Wethereforebelievethatrenewablegaseswillbekeyinsubstitutingnaturalgasinthesesub-industrialsegments.Amongthesearehightemperaturechemicalandpetrochemicalsmanufacturing,iron&steel,andnon-metallicminerals(clay,limestone,cement).Whilegreenhydrogen’smovetowardscostparitywithgreyhydrogenisaccelerating,andweexpectthistobereachedbefore2030acrossregionsoflowrenewablepowercosts,wenotethatthecurrentmacroenvironmentofhighercommodityprices,inparticularforEuropeannaturalgas,combinedwithcarbonpricesiscreatingauniquegreenhydrogencostparitydynamicinEurope.Withmostcurrentlyproducedhydrogenbeingsourcedfromnaturalgasintheregion,thenotablyhighernaturalgaspricetowhichtheregioniscurrentlyexposedistiltingthescaleinfavourofgreenhydrogenfromaneconomicstandpoint.Weestimatethatthecarbonpriceimpliedbythecurrenthighernaturalgaspriceenvironmentintheregionisequivalentto>US$200/tnCO2eq(whenaccountingforthescope1,2,3carbonintensityofnaturalgas)evenwithoutconsideringEuropeanETScarbonprices,whicharecurrentlyaboveUS$50/tnCO2eqdespitetheirrecentcorrectionfromthepeak.ThisismorethansufﬁcienttobridgethecostofgreyhydrogenwithgreenacrossregionsofEuropewheregreenhydrogenisproducedwithdedicatedRESandarenewablepowerLCOElowerthanUS$70/MWh.17March202226GoldmanSachsCarbonomicsCurrently,H2isprimarilyusedasafeedstockinanumberofkeyindustrialprocessesandthereforeplaysaverylimitedroleintheenergytransitionaswearestilltounlockhydrogen’spotentialasanenergyvectorandfuel,thedirectioninwhichtheEUwishestomove.AccordingtotheIEA,globalhydrogendemandwasaround90Mtin2020.Thisincludesmorethan70MtH2usedaspurehydrogen,primarilyinoilreﬁningandammoniaproduction,andlessthan20MtH2mixedwithcarboncontaininggases,primarilyinmethanolproductionandsteelmanufacturing.Thisexcludesaround20MtH2thatispresentinresidualgasesfromindustrialprocessesusedforheatandelectricity.Webelievethecleanhydrogenrevolutionbeginswiththede-carbonizationofexistinghydrogenendmarketsgivencostparityonlyneedstobereachedatthepointofhydrogenproductionintheseindustries.Therefore,weseethestartingpointofthecleanhydrogeneconomyasthedecarbonizationofthe70Mtpaofcurrentdedicatedfossilfuel-basedhydrogenproduction.Exhibit43:RisingEuropeangaspriceshavenowentereddemandrationingterritoryforindustrialusesofnaturalgas...EUETScarbonpricesandcarbonpricesimpliedbynaturalgaspricesinEurope(TTF)inUS$/tnCO2eqExhibit44:...with>50%ofnaturalgasconsumptioninEurope’sindustryattributedtoheavyindustrialsub-segmentswhicharetoughtoelectrify,includingsteel,cement,chemicalsEU27ﬁnalconsumptionofnaturalgasinindustrysplitbysub-industry050100150200250300350400Jan-20Feb-20Mar-20Apr-20May-20Jun-20Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21Jan-22Feb-22Mar-22EUETScarbonpriceandimpliedcarbonpriceassociatedwithEuropeannaturalgasprices(US$/tnCO2)EUETScarbonpriceNaturalgasTTFimpliedcarbonpriceIron&Steel,8%Chemicalandpetrochemical,38%Nonferrousmetals,3%Nonmetallicminerals,14%Transportequipment,2%Machinery,6%Mining&quarring,1%Food,beveragesandtobacco,14%Paper,pulpandpackaging,7%Woodandwoodproducts,1%Construction,2%Textileandleather,2%Others,2%Source:ThomsonReutersDatastream,GoldmanSachsGlobalInvestmentResearchSource:EurostatExhibit45:TheEUCommission’sproposed20Mtofhydrogenby2030representsanotableupgradeofthe5.6Mtincludedaspartof‘Fitfor55’...Europe’shydrogenaim(Mtpa)by2030EExhibit46:...withgreenhydrogenalreadyatcostparitywithgreyhydrogenacrosskeypartsofEurope(forLCOE<US$70/MWh)Levelizedcostofproductionofhydrogen(LCOH-US$/kgH2)5.6200510152025'Fitfor55'targetREPowerEUproposalEurope'shydrogentarget(Mtpa)by2030E0.01.02.03.04.05.06.07.0NG:US$5/mcfNG:US$10/mcfNG:US$15/mcfNG:US$20/mcfNG:US$25/mcfNG:US$30/mcfNG:US$5/mcfNG:US$10/mcfNG:US$15/mcfNG:US$20/mcfNG:US$25/mcfNG:US$30/mcfLCOE:US$15/MWhLCOE:US$30/MWhLCOE:US$45/MWhLCOE:US$60/MWhLCOE:US$75/MWhGreyH2-SMRBlueH2-SMR+CCUSGreenH2Levelisedcostofproductionofhydrogen-LCOH(US$/kgH2)CapexOpexFuel/electricityCarbontax-$50/tnCO2Europeangasprices-2023ESource:EUCommission,GoldmanSachsGlobalInvestmentResearchSource:GoldmanSachsGlobalInvestmentResearch17March202227GoldmanSachsCarbonomicsGridblending:Amajorpotentialaddressablemarketforhydrogenthatisimportantforvariousexistingnaturalgasend-usersandbeneﬁtsfromexistinginfrastructureTodiversifyEurope’sindustrialandheatingdemand(residentialandcommercial),webelievethatanotherpowerfultoolistheblendingofhydrogeninthenaturalgasgrid,alsoofferingauniqueopportunitytoutilizeexistingassetsthatfacetheriskofbecomingstrandedinanetzeroworld.Furthermore,gridblendingcanaidthedecarbonizationofabroadrangeofnaturalgascustomerscurrently,includingindustry,buildingsandpowergeneration,leadingtoamuchlargeraddressablemarketthanbuildings’heatingalonewouldsuggest.Overall,onourestimates,hydrogenblendinginexistinginfrastructurewouldlikelyincreasecostsbyaroundUS$0.2-0.5$/kgH2ontopofthecostsofhydrogenproductionduetotheneedforinjectionstationsonthetransmissionanddistributiongridsaswellashigheroperationalcosts.Nonetheless,evensmallhydrogenblendingvolumeratescanhaveamajorimpactontheaddressablemarket.However,anumberofchallengeshavetobeaddressed:(a)thelowenergydensityperunitvolumeofhydrogencomparedtogas(aroundathird),whichwouldimplygreaterrequiredgasvolumes,(b)thesmallersizeofhydrogenmolecules,whichwouldimplyhigherriskofleakagethroughsteelpipelinenetworks,suggestingtheneedforpolymer-basedretroﬁttingatblendingratesthatexceed20%-30%,(c)theincreasedriskofﬂammabilityandtheodorless,colorlessnatureofthegasleadingtorisingneedforﬂamedetectorsandmonitoring,(d)variabilityofthevolumeofhydrogenblendedintothestream,whichcouldhaveanadverseimpactontheoperationoftheequipment,whichisoftendesignedwithanarrowrangeofadaptabilitytodifferentgases.Europeisoneoftheleadingcountrieswhenitcomestosettingtheregulatoryframeworkforhydrogenblending.Germany,forinstance,speciﬁesamaximumof10%providedtherearenoCNGﬁllingstationsconnectedtothenetwork.TherearecurrentlymanyprojectsinEuropeexaminingthepotentialforhydrogenblendinginexistinggasnetworksincludingGRHYDinFrance,andHyDeploy,H21andHy4HeatintheUK.The‘EuropeanHydrogenBackbone’,adedicatedhydrogeninfrastructurestudypublishedin2020,authoredbyelevengasinfrastructureplayers,describedthevisionofhowdedicatedhydrogeninfrastructurecanbecreatedinasigniﬁcantportionofEurope.Thisdescribesa6,800kmpipelinenetworkby2030anditsfurtherscale-upto23,000kmby2040,requiringanestimatedEUR27-64bnbasedontheassumptionof75%naturalgaspipelinesconvertedand25%newpipelinestretches.Assumingthebackboneisequippedwitharobustcompressionsystem,theproposednetworkshouldbeabletomeet1130TWhannualhydrogendemandinEuropeby2040.Morerecently,inDecember2021,theEuropeanCommissionproposedanewEUframeworktode-carbonizegasmarkets,promotehydrogenandreducemethaneemissions.Themarketruleswillbeappliedintwophases,beforeandafter2030,andnotablycoveraccesstohydrogeninfrastructure,separationofhydrogenproductionandtransportactivities,andtariffsetting.AnewgovernancestructureintheformoftheEuropeanNetworkofNetworkOperatorsforHydrogen(ENNOH)willbecreatedtopromotededicatedhydrogeninfrastructure,cross-bordercoordinationandinterconnectingnetworkconstruction,andelaborateonspeciﬁctechnicalrules.Thenewruleswillmakeiteasierforrenewableandlow-carbongasestoaccesstheexistinggasgrid,byremovingtariffsforcross-borderinterconnectionsandloweringtariffsat17March202228GoldmanSachsCarbonomicsinjectionpoints.Theyalsocreateacertiﬁcationsystemforlow-carbongases,tocompletetheworkstartedintheRenewableEnergyDirectivewiththecertiﬁcationofrenewablegases.Initsmostrecentproposal,REPowerEU,theCommissionwill,accordingtothedocument,furtherdeveloptherelevantregulatoryframeworktopromoteaEuropeanmarketforhydrogenandsupportthedevelopmentofanintegratedgasandhydrogeninfrastructure,hydrogenstoragefacilitiesandportinfrastructure,andhashighlightedthatnewcross-borderinfrastructureshouldbehydrogencompatible.Exhibit47:Gridblendingofhydrogeninexistingnaturalgasinfrastructurecouldbeaquickwaytoreducegasconsumption,yetwouldrequirefurthertestingandanupgradeofglobalhydrogenblendinglimits...Hydrogenblendinglimitsinnaturalgasgridbyvolume(%)Exhibit48:...withhigherblendingvolumesofhydrogen(>10%-20%)alsolikelytorequireupgradesofkeycomponentsofthenaturalgasgridsystemSensitivityofnaturalgasinfrastructurecomponentstohydrogenblending0%5%10%15%20%25%30%CaliforniaBelgiumJapanLatviaFinlandNetherlandsSwitzerlandLithuaniaUSAAustriaSpainAustraliaFranceUKGermanyHydrogenblendinglimitsinnaturalgasgridbyvolume(%)H2blendlimitAllowableundercertaincircumstances0%10%20%30%40%50%60%70%80%90%100%DistributionPressureregulationGasmetersSeals/valvesTransmissionCompressorsUndergroundstorageBoilersCNGstoragetanksHousegasburners/stovesCo-generationplantsGasturbinesTransmission&distributionEnd-useSensitivityofnaturalgasinfrastructuretohydrogenblending(%,volume)H2blendinguncriticalAllowableundercertaincircumstancesSource:S&PGlobalPlattsSource:S&PPlatts,PG&E,IEA17March202229GoldmanSachsCarbonomicsDisclosureAppendixRegACWe,MicheleDellaVigna,CFA,ZoeClarke,BepulShahab,AlbertoGandolﬁ,DanielaCostaandNeilMehta,herebycertifythatalloftheviewsexpressedinthisreportaccuratelyreﬂectourpersonalviewsaboutthesubjectcompanyorcompaniesanditsortheirsecurities.Wealsocertifythatnopartofourcompensationwas,isorwillbe,directlyorindirectly,relatedtothespeciﬁcrecommendationsorviewsexpressedinthisreport.Unlessotherwisestated,theindividualslistedonthecoverpageofthisreportareanalystsinGoldmanSachs’GlobalInvestmentResearchdivision.GSFactorProﬁleTheGoldmanSachsFactorProﬁleprovidesinvestmentcontextforastockbycomparingkeyattributestothemarket(i.e.ourcoverageuniverse)anditssectorpeers.Thefourkeyattributesdepictedare:Growth,FinancialReturns,Multiple(e.g.valuation)andIntegrated(acompositeofGrowth,FinancialReturnsandMultiple).Growth,FinancialReturnsandMultiplearecalculatedbyusingnormalizedranksforspeciﬁcmetricsforeachstock.Thenormalizedranksforthemetricsarethenaveragedandconvertedintopercentilesfortherelevantattribute.Theprecisecalculationofeachmetricmayvarydependingontheﬁscalyear,industryandregion,butthestandardapproachisasfollows:Growthisbasedonastock’sforward-lookingsalesgrowth,EBITDAgrowthandEPSgrowth(forﬁnancialstocks,onlyEPSandsalesgrowth),withahigherpercentileindicatingahighergrowthcompany.FinancialReturnsisbasedonastock’sforward-lookingROE,ROCEandCROCI(forﬁnancialstocks,onlyROE),withahigherpercentileindicatingacompanywithhigherﬁnancialreturns.Multipleisbasedonastock’sforward-lookingP/E,P/B,price/dividend(P/D),EV/EBITDA,EV/FCFandEV/DebtAdjustedCashFlow(DACF)(forﬁnancialstocks,onlyP/E,P/BandP/D),withahigherpercentileindicatingastocktradingatahighermultiple.TheIntegratedpercentileiscalculatedastheaverageoftheGrowthpercentile,FinancialReturnspercentileand(100%-Multiplepercentile).FinancialReturnsandMultipleusetheGoldmanSachsanalystforecastsattheﬁscalyear-endatleastthreequartersinthefuture.Growthusesinputsfortheﬁscalyearatleastsevenquartersinthefuturecomparedwiththeyearatleastthreequartersinthefuture(onaper-sharebasisforallmetrics).ForamoredetaileddescriptionofhowwecalculatetheGSFactorProﬁle,pleasecontactyourGSrepresentative.M&ARankAcrossourglobalcoverage,weexaminestocksusinganM&Aframework,consideringbothqualitativefactorsandquantitativefactors(whichmayvaryacrosssectorsandregions)toincorporatethepotentialthatcertaincompaniescouldbeacquired.WethenassignaM&Arankasameansofscoringcompaniesunderourratedcoveragefrom1to3,with1representinghigh(30%-50%)probabilityofthecompanybecominganacquisitiontarget,2representingmedium(15%-30%)probabilityand3representinglow(0%-15%)probability.Forcompaniesranked1or2,inlinewithourstandarddepartmentalguidelinesweincorporateanM&Acomponentintoourtargetprice.M&Arankof3isconsideredimmaterialandthereforedoesnotfactorintoourpricetarget,andmayormaynotbediscussedinresearch.QuantumQuantumisGoldmanSachs’proprietarydatabaseprovidingaccesstodetailedﬁnancialstatementhistories,forecastsandratios.Itcanbeusedforin-depthanalysisofasinglecompany,ortomakecomparisonsbetweencompaniesindifferentsectorsandmarkets.DisclosuresRegulatorydisclosuresDisclosuresrequiredbyUnitedStateslawsandregulationsSeecompany-speciﬁcregulatorydisclosuresaboveforanyofthefollowingdisclosuresrequiredastocompaniesreferredtointhisreport:managerorco-managerinapendingtransaction;1%orotherownership;compensationforcertainservices;typesofclientrelationships;managed/co-managedpublicofferingsinpriorperiods;directorships;forequitysecurities,marketmakingand/orspecialistrole.GoldmanSachstradesormaytradeasaprincipalindebtsecurities(orinrelatedderivatives)ofissuersdiscussedinthisreport.Thefollowingareadditionalrequireddisclosures:Ownershipandmaterialconﬂictsofinterest:GoldmanSachspolicyprohibitsitsanalysts,professionalsreportingtoanalystsandmembersoftheirhouseholdsfromowningsecuritiesofanycompanyintheanalyst’sareaofcoverage.Analystcompensation:AnalystsarepaidinpartbasedontheproﬁtabilityofGoldmanSachs,whichincludesinvestmentbankingrevenues.Analystasofﬁcerordirector:GoldmanSachspolicygenerallyprohibitsitsanalysts,personsreportingtoanalystsormembersoftheirhouseholdsfromservingasanofﬁcer,directororadvisorofanycompanyintheanalyst’sareaofcoverage.Non-U.S.Analysts:Non-U.S.analystsmaynotbeassociatedpersonsofGoldmanSachs&Co.LLCandthereforemaynotbesubjecttoFINRARule2241orFINRARule2242restrictionsoncommunicationswithsubjectcompany,publicappearancesandtradingsecuritiesheldbytheanalysts.Distributionofratings:Seethedistributionofratingsdisclosureabove.Pricechart:Seethepricechart,withchangesofratingsandpricetargetsinpriorperiods,above,or,ifelectronicformatorifwithrespecttomultiplecompanieswhicharethesubjectofthisreport,ontheGoldmanSachswebsiteathttps://www.gs.com/research/hedge.html.17March202230GoldmanSachsCarbonomicsAdditionaldisclosuresrequiredunderthelawsandregulationsofjurisdictionsotherthantheUnitedStatesThefollowingdisclosuresarethoserequiredbythejurisdictionindicated,excepttotheextentalreadymadeabovepursuanttoUnitedStateslawsandregulations.Australia:GoldmanSachsAustraliaPtyLtdanditsafﬁliatesarenotauthoriseddeposit-takinginstitutions(asthattermisdeﬁnedintheBankingAct1959(Cth))inAustraliaanddonotprovidebankingservices,norcarryonabankingbusiness,inAustralia.Thisresearch,andanyaccesstoit,isintendedonlyfor“wholesaleclients”withinthemeaningoftheAustralianCorporationsAct,unlessotherwiseagreedbyGoldmanSachs.Inproducingresearchreports,membersoftheGlobalInvestmentResearchDivisionofGoldmanSachsAustraliamayattendsitevisitsandothermeetingshostedbythecompaniesandotherentitieswhicharethesubjectofitsresearchreports.InsomeinstancesthecostsofsuchsitevisitsormeetingsmaybemetinpartorinwholebytheissuersconcernedifGoldmanSachsAustraliaconsidersitisappropriateandreasonableinthespeciﬁccircumstancesrelatingtothesitevisitormeeting.Totheextentthatthecontentsofthisdocumentcontainsanyﬁnancialproductadvice,itisgeneraladviceonlyandhasbeenpreparedbyGoldmanSachswithouttakingintoaccountaclient’sobjectives,ﬁnancialsituationorneeds.Aclientshould,beforeactingonanysuchadvice,considertheappropriatenessoftheadvicehavingregardtotheclient’sownobjectives,ﬁnancialsituationandneeds.AcopyofcertainGoldmanSachsAustraliaandNewZealanddisclosureofinterestsandacopyofGoldmanSachs’AustralianSell-SideResearchIndependencePolicyStatementareavailableat:https://www.goldmansachs.com/disclosures/australia-new-zealand/index.html.Brazil:DisclosureinformationinrelationtoCVMResolutionn.20isavailableathttps://www.gs.com/worldwide/brazil/area/gir/index.html.Whereapplicable,theBrazil-registeredanalystprimarilyresponsibleforthecontentofthisresearchreport,asdeﬁnedinArticle20ofCVMResolutionn.20,istheﬁrstauthornamedatthebeginningofthisreport,unlessindicatedotherwiseattheendofthetext.Canada:Thisinformationisbeingprovidedtoyouforinformationpurposesonlyandisnot,andundernocircumstancesshouldbeconstruedas,anadvertisement,offeringorsolicitationbyGoldmanSachs&Co.LLCforpurchasersofsecuritiesinCanadatotradeinanyCanadiansecurity.GoldmanSachs&Co.LLCisnotregisteredasadealerinanyjurisdictioninCanadaunderapplicableCanadiansecuritieslawsandgenerallyisnotpermittedtotradeinCanadiansecuritiesandmaybeprohibitedfromsellingcertainsecuritiesandproductsincertainjurisdictionsinCanada.IfyouwishtotradeinanyCanadiansecuritiesorotherproductsinCanadapleasecontactGoldmanSachsCanadaInc.,anafﬁliateofTheGoldmanSachsGroupInc.,oranotherregisteredCanadiandealer.HongKong:FurtherinformationonthesecuritiesofcoveredcompaniesreferredtointhisresearchmaybeobtainedonrequestfromGoldmanSachs(Asia)L.L.C.India:FurtherinformationonthesubjectcompanyorcompaniesreferredtointhisresearchmaybeobtainedfromGoldmanSachs(India)SecuritiesPrivateLimited,ResearchAnalyst-SEBIRegistrationNumberINH000001493,951-A,RationalHouse,AppasahebMaratheMarg,Prabhadevi,Mumbai400025,India,CorporateIdentityNumberU74140MH2006FTC160634,Phone+912266169000,Fax+912266169001.GoldmanSachsmaybeneﬁciallyown1%ormoreofthesecurities(assuchtermisdeﬁnedinclause2(h)theIndianSecuritiesContracts(Regulation)Act,1956)ofthesubjectcompanyorcompaniesreferredtointhisresearchreport.Japan:Seebelow.Korea:Thisresearch,andanyaccesstoit,isintendedonlyfor“professionalinvestors”withinthemeaningoftheFinancialServicesandCapitalMarketsAct,unlessotherwiseagreedbyGoldmanSachs.FurtherinformationonthesubjectcompanyorcompaniesreferredtointhisresearchmaybeobtainedfromGoldmanSachs(Asia)L.L.C.,SeoulBranch.NewZealand:GoldmanSachsNewZealandLimitedanditsafﬁliatesareneither“registeredbanks”nor“deposittakers”(asdeﬁnedintheReserveBankofNewZealandAct1989)inNewZealand.Thisresearch,andanyaccesstoit,isintendedfor“wholesaleclients”(asdeﬁnedintheFinancialAdvisersAct2008)unlessotherwiseagreedbyGoldmanSachs.AcopyofcertainGoldmanSachsAustraliaandNewZealanddisclosureofinterestsisavailableat:https://www.goldmansachs.com/disclosures/australia-new-zealand/index.html.Russia:ResearchreportsdistributedintheRussianFederationarenotadvertisingasdeﬁnedintheRussianlegislation,butareinformationandanalysisnothavingproductpromotionastheirmainpurposeanddonotprovideappraisalwithinthemeaningoftheRussianlegislationonappraisalactivity.ResearchreportsdonotconstituteapersonalizedinvestmentrecommendationasdeﬁnedinRussianlawsandregulations,arenotaddressedtoaspeciﬁcclient,andarepreparedwithoutanalyzingtheﬁnancialcircumstances,investmentproﬁlesorriskproﬁlesofclients.GoldmanSachsassumesnoresponsibilityforanyinvestmentdecisionsthatmaybetakenbyaclientoranyotherpersonbasedonthisresearchreport.Singapore:GoldmanSachs(Singapore)Pte.(CompanyNumber:198602165W),whichisregulatedbytheMonetaryAuthorityofSingapore,acceptslegalresponsibilityforthisresearch,andshouldbecontactedwithrespecttoanymattersarisingfrom,orinconnectionwith,thisresearch.Taiwan:Thismaterialisforreferenceonlyandmustnotbereprintedwithoutpermission.Investorsshouldcarefullyconsidertheirowninvestmentrisk.Investmentresultsaretheresponsibilityoftheindividualinvestor.UnitedKingdom:PersonswhowouldbecategorizedasretailclientsintheUnitedKingdom,assuchtermisdeﬁnedintherulesoftheFinancialConductAuthority,shouldreadthisresearchinconjunctionwithpriorGoldmanSachsresearchonthecoveredcompaniesreferredtohereinandshouldrefertotheriskwarningsthathavebeensenttothembyGoldmanSachsInternational.Acopyoftheseriskswarnings,andaglossaryofcertainﬁnancialtermsusedinthisreport,areavailablefromGoldmanSachsInternationalonrequest.EuropeanUnionandUnitedKingdom:DisclosureinformationinrelationtoArticle6(2)oftheEuropeanCommissionDelegatedRegulation(EU)(2016/958)supplementingRegulation(EU)No596/2014oftheEuropeanParliamentandoftheCouncil(includingasthatDelegatedRegulationisimplementedintoUnitedKingdomdomesticlawandregulationfollowingtheUnitedKingdom’sdeparturefromtheEuropeanUnionandtheEuropeanEconomicArea)withregardtoregulatorytechnicalstandardsforthetechnicalarrangementsforobjectivepresentationofinvestmentrecommendationsorotherinformationrecommendingorsuggestinganinvestmentstrategyandfordisclosureofparticularinterestsorindicationsofconﬂictsofinterestisavailableathttps://www.gs.com/disclosures/europeanpolicy.htmlwhichstatestheEuropeanPolicyforManagingConﬂictsofInterestinConnectionwithInvestmentResearch.Japan:GoldmanSachsJapanCo.,Ltd.isaFinancialInstrumentDealerregisteredwiththeKantoFinancialBureauunderregistrationnumberKinsho69,andamemberofJapanSecuritiesDealersAssociation,FinancialFuturesAssociationofJapanandTypeIIFinancialInstrumentsFirmsAssociation.Salesandpurchaseofequitiesaresubjecttocommissionpre-determinedwithclientsplusconsumptiontax.Seecompany-speciﬁcdisclosuresastoanyapplicabledisclosuresrequiredbyJapanesestockexchanges,theJapaneseSecuritiesDealersAssociationortheJapaneseSecuritiesFinanceCompany.Ratings,coverageuniverseandrelateddeﬁnitionsBuy(B),Neutral(N),Sell(S)AnalystsrecommendstocksasBuysorSellsforinclusiononvariousregionalInvestmentLists.BeingassignedaBuyorSellonanInvestmentListisdeterminedbyastock’stotalreturnpotentialrelativetoitscoverageuniverse.AnystocknotassignedasaBuyoraSellonanInvestmentListwithanactiverating(i.e.,astockthatisnotRatingSuspended,NotRated,CoverageSuspendedorNotCovered),isdeemedNeutral.Eachregion’sInvestmentReviewCommitteemanagesRegionalConvictionlists,whichrepresentinvestmentrecommendationsfocusedonthesizeofthetotalreturnpotentialand/orthelikelihoodoftherealizationofthereturnacrosstheirrespectiveareasofcoverage.TheadditionorremovalofstocksfromsuchConvictionlistsdonotrepresentachangeintheanalysts’investmentratingforsuchstocks.Totalreturnpotentialrepresentstheupsideordownsidedifferentialbetweenthecurrentsharepriceandthepricetarget,includingallpaidoranticipateddividends,expectedduringthetimehorizonassociatedwiththepricetarget.Pricetargetsarerequiredforallcoveredstocks.Thetotalreturnpotential,pricetargetandassociatedtimehorizonarestatedineachreportaddingorreiteratinganInvestmentListmembership.CoverageUniverse:Alistofallstocksineachcoverageuniverseisavailablebyprimaryanalyst,stockandcoverageuniverseathttps://www.gs.com/research/hedge.html.NotRated(NR).Theinvestmentrating,targetpriceandearningsestimates(whererelevant)havebeensuspendedpursuanttoGoldmanSachspolicywhenGoldmanSachsisactinginanadvisorycapacityinamergerorinastrategictransactioninvolvingthiscompany,whentherearelegal,regulatoryorpolicyconstraintsduetoGoldmanSachs’involvementinatransaction,andincertainothercircumstances.RatingSuspended(RS).GoldmanSachsResearchhassuspendedtheinvestmentratingandpricetargetforthisstock,becausethereisnotasufﬁcientfundamentalbasisfordetermininganinvestmentratingortargetprice.Thepreviousinvestmentratingandtargetprice,ifany,arenolongerineffectforthisstockandshouldnotbereliedupon.CoverageSuspended(CS).GoldmanSachshassuspendedcoverageofthiscompany.NotCovered(NC).GoldmanSachsdoes17March202231GoldmanSachsCarbonomicsnotcoverthiscompany.NotAvailableorNotApplicable(NA).Theinformationisnotavailablefordisplayorisnotapplicable.NotMeaningful(NM).Theinformationisnotmeaningfulandisthereforeexcluded.Globalproduct;distributingentitiesTheGlobalInvestmentResearchDivisionofGoldmanSachsproducesanddistributesresearchproductsforclientsofGoldmanSachsonaglobalbasis.AnalystsbasedinGoldmanSachsofﬁcesaroundtheworldproduceresearchonindustriesandcompanies,andresearchonmacroeconomics,currencies,commoditiesandportfoliostrategy.ThisresearchisdisseminatedinAustraliabyGoldmanSachsAustraliaPtyLtd(ABN21006797897);inBrazilbyGoldmanSachsdoBrasilCorretoradeTítuloseValoresMobiliáriosS.A.;PublicCommunicationChannelGoldmanSachsBrazil:08007275764and/orcontatogoldmanbrasil@gs.com.AvailableWeekdays(exceptholidays),from9amto6pm.CanaldeComunicaçãocomoPúblicoGoldmanSachsBrasil:08007275764e/oucontatogoldmanbrasil@gs.com.Horáriodefuncionamento:segunda-feiraàsexta-feira(excetoferiados),das9hàs18h;inCanadabyGoldmanSachs&Co.LLC;inHongKongbyGoldmanSachs(Asia)L.L.C.;inIndiabyGoldmanSachs(India)SecuritiesPrivateLtd.;inJapanbyGoldmanSachsJapanCo.,Ltd.;intheRepublicofKoreabyGoldmanSachs(Asia)L.L.C.,SeoulBranch;inNewZealandbyGoldmanSachsNewZealandLimited;inRussiabyOOOGoldmanSachs;inSingaporebyGoldmanSachs(Singapore)Pte.(CompanyNumber:198602165W);andintheUnitedStatesofAmericabyGoldmanSachs&Co.LLC.GoldmanSachsInternationalhasapprovedthisresearchinconnectionwithitsdistributionintheUnitedKingdom.EffectivefromthedateoftheUnitedKingdom’sdeparturefromtheEuropeanUnionandtheEuropeanEconomicArea(“BrexitDay”)thefollowinginformationwithrespecttodistributingentitieswillapply:GoldmanSachsInternational(“GSI”),authorisedbythePrudentialRegulationAuthority(“PRA”)andregulatedbytheFinancialConductAuthority(“FCA”)andthePRA,hasapprovedthisresearchinconnectionwithitsdistributionintheUnitedKingdom.EuropeanEconomicArea:GSI,authorisedbythePRAandregulatedbytheFCAandthePRA,disseminatesresearchinthefollowingjurisdictionswithintheEuropeanEconomicArea:theGrandDuchyofLuxembourg,Italy,theKingdomofBelgium,theKingdomofDenmark,theKingdomofNorway,theRepublicofFinland,theRepublicofCyprusandtheRepublicofIreland;GS-SuccursaledeParis(Parisbranch)which,fromBrexitDay,willbeauthorisedbytheFrenchAutoritédecontrôleprudentieletderesolution(“ACPR”)andregulatedbytheAutoritédecontrôleprudentieletderesolutionandtheAutoritédesmarchesﬁnanciers(“AMF”)disseminatesresearchinFrance;GSI-SucursalenEspaña(Madridbranch)authorizedinSpainbytheComisiónNacionaldelMercadodeValoresdisseminatesresearchintheKingdomofSpain;GSI-SwedenBankﬁlial(Stockholmbranch)isauthorizedbytheSFSAasa“thirdcountrybranch”inaccordancewithChapter4,Section4oftheSwedishSecuritiesandMarketAct(Sw.lag(2007:528)omvärdepappersmarknaden)disseminatesresearchintheKingdomofSweden;GoldmanSachsBankEuropeSE(“GSBE”)isacreditinstitutionincorporatedinGermanyand,withintheSingleSupervisoryMechanism,subjecttodirectprudentialsupervisionbytheEuropeanCentralBankandinotherrespectssupervisedbyGermanFederalFinancialSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsicht,BaFin)andDeutscheBundesbankanddisseminatesresearchintheFederalRepublicofGermanyandthosejurisdictionswithintheEuropeanEconomicAreawhereGSIisnotauthorisedtodisseminateresearchandadditionally,GSBE,CopenhagenBranchﬁlialafGSBE,Tyskland,supervisedbytheDanishFinancialAuthoritydisseminatesresearchintheKingdomofDenmark;GSBE-SucursalenEspaña(Madridbranch)subject(toalimitedextent)tolocalsupervisionbytheBankofSpaindisseminatesresearchintheKingdomofSpain;GSBE-SuccursaleItalia(Milanbranch)totherelevantapplicableextent,subjecttolocalsupervisionbytheBankofItaly(Bancad’Italia)andtheItalianCompaniesandExchangeCommission(CommissioneNazionaleperleSocietàelaBorsa“Consob”)disseminatesresearchinItaly;GSBE-SuccursaledeParis(Parisbranch),supervisedbytheAMFandbytheACPRdisseminatesresearchinFrance;andGSBE-SwedenBankﬁlial(Stockholmbranch),toalimitedextent,subjecttolocalsupervisionbytheSwedishFinancialSupervisoryAuthority(Finansinpektionen)disseminatesresearchintheKingdomofSweden.GeneraldisclosuresThisresearchisforourclientsonly.OtherthandisclosuresrelatingtoGoldmanSachs,thisresearchisbasedoncurrentpublicinformationthatweconsiderreliable,butwedonotrepresentitisaccurateorcomplete,anditshouldnotbereliedonassuch.Theinformation,opinions,estimatesandforecastscontainedhereinareasofthedatehereofandaresubjecttochangewithoutpriornotiﬁcation.Weseektoupdateourresearchasappropriate,butvariousregulationsmaypreventusfromdoingso.Otherthancertainindustryreportspublishedonaperiodicbasis,thelargemajorityofreportsarepublishedatirregularintervalsasappropriateintheanalyst’sjudgment.GoldmanSachsconductsaglobalfull-service,integratedinvestmentbanking,investmentmanagement,andbrokeragebusiness.WehaveinvestmentbankingandotherbusinessrelationshipswithasubstantialpercentageofthecompaniescoveredbyourGlobalInvestmentResearchDivision.GoldmanSachs&Co.LLC,theUnitedStatesbrokerdealer,isamemberofSIPC(https://www.sipc.org).Oursalespeople,traders,andotherprofessionalsmayprovideoralorwrittenmarketcommentaryortradingstrategiestoourclientsandprincipaltradingdesksthatreﬂectopinionsthatarecontrarytotheopinionsexpressedinthisresearch.Ourassetmanagementarea,principaltradingdesksandinvestingbusinessesmaymakeinvestmentdecisionsthatareinconsistentwiththerecommendationsorviewsexpressedinthisresearch.Theanalystsnamedinthisreportmayhavefromtimetotimediscussedwithourclients,includingGoldmanSachssalespersonsandtraders,ormaydiscussinthisreport,tradingstrategiesthatreferencecatalystsoreventsthatmayhaveanear-termimpactonthemarketpriceoftheequitysecuritiesdiscussedinthisreport,whichimpactmaybedirectionallycountertotheanalyst’spublishedpricetargetexpectationsforsuchstocks.Anysuchtradingstrategiesaredistinctfromanddonotaffecttheanalyst’sfundamentalequityratingforsuchstocks,whichratingreﬂectsastock’sreturnpotentialrelativetoitscoverageuniverseasdescribedherein.Weandourafﬁliates,ofﬁcers,directors,andemployees,excludingequityandcreditanalysts,willfromtimetotimehavelongorshortpositionsin,actasprincipalin,andbuyorsell,thesecuritiesorderivatives,ifany,referredtointhisresearch.TheviewsattributedtothirdpartypresentersatGoldmanSachsarrangedconferences,includingindividualsfromotherpartsofGoldmanSachs,donotnecessarilyreﬂectthoseofGlobalInvestmentResearchandarenotanofﬁcialviewofGoldmanSachs.Anythirdpartyreferencedherein,includinganysalespeople,tradersandotherprofessionalsormembersoftheirhousehold,mayhavepositionsintheproductsmentionedthatareinconsistentwiththeviewsexpressedbyanalystsnamedinthisreport.Thisresearchisnotanoffertosellorthesolicitationofanoffertobuyanysecurityinanyjurisdictionwheresuchanofferorsolicitationwouldbeillegal.Itdoesnotconstituteapersonalrecommendationortakeintoaccounttheparticularinvestmentobjectives,ﬁnancialsituations,orneedsofindividualclients.Clientsshouldconsiderwhetheranyadviceorrecommendationinthisresearchissuitablefortheirparticularcircumstancesand,ifappropriate,seekprofessionaladvice,includingtaxadvice.Thepriceandvalueofinvestmentsreferredtointhisresearchandtheincomefromthemmayﬂuctuate.Pastperformanceisnotaguidetofutureperformance,futurereturnsarenotguaranteed,andalossoforiginalcapitalmayoccur.Fluctuationsinexchangeratescouldhaveadverseeffectsonthevalueorpriceof,orincomederivedfrom,certaininvestments.Certaintransactions,includingthoseinvolvingfutures,options,andotherderivatives,giverisetosubstantialriskandarenotsuitableforallinvestors.InvestorsshouldreviewcurrentoptionsandfuturesdisclosuredocumentswhichareavailablefromGoldmanSachssalesrepresentativesorathttps://www.theocc.com/about/publications/character-risks.jspandhttps://www.ﬁadocumentation.org/ﬁa/regulatory-disclosures_1/ﬁa-uniform-futures-and-options-on-futures-risk-disclosures-booklet-pdf-version-2018.Transactioncostsmaybesigniﬁcantinoptionstrategiescallingformultiplepurchaseandsalesofoptionssuchasspreads.Supportingdocumentation17March202232GoldmanSachsCarbonomicswillbesupplieduponrequest.DifferingLevelsofServiceprovidedbyGlobalInvestmentResearch:ThelevelandtypesofservicesprovidedtoyoubytheGlobalInvestmentResearchdivisionofGSmayvaryascomparedtothatprovidedtointernalandotherexternalclientsofGS,dependingonvariousfactorsincludingyourindividualpreferencesastothefrequencyandmannerofreceivingcommunication,yourriskproﬁleandinvestmentfocusandperspective(e.g.,marketwide,sectorspeciﬁc,longterm,shortterm),thesizeandscopeofyouroverallclientrelationshipwithGS,andlegalandregulatoryconstraints.Asanexample,certainclientsmayrequesttoreceivenotiﬁcationswhenresearchonspeciﬁcsecuritiesispublished,andcertainclientsmayrequestthatspeciﬁcdataunderlyinganalysts’fundamentalanalysisavailableonourinternalclientwebsitesbedeliveredtothemelectronicallythroughdatafeedsorotherwise.Nochangetoananalyst’sfundamentalresearchviews(e.g.,ratings,pricetargets,ormaterialchangestoearningsestimatesforequitysecurities),willbecommunicatedtoanyclientpriortoinclusionofsuchinformationinaresearchreportbroadlydisseminatedthroughelectronicpublicationtoourinternalclientwebsitesorthroughothermeans,asnecessary,toallclientswhoareentitledtoreceivesuchreports.Allresearchreportsaredisseminatedandavailabletoallclientssimultaneouslythroughelectronicpublicationtoourinternalclientwebsites.Notallresearchcontentisredistributedtoourclientsoravailabletothird-partyaggregators,norisGoldmanSachsresponsiblefortheredistributionofourresearchbythirdpartyaggregators.Forresearch,modelsorotherdatarelatedtooneormoresecurities,marketsorassetclasses(includingrelatedservices)thatmaybeavailabletoyou,pleasecontactyourGSrepresentativeorgotohttps://research.gs.com.Disclosureinformationisalsoavailableathttps://www.gs.com/research/hedge.htmlorfromResearchCompliance,200WestStreet,NewYork,NY10282.©2022GoldmanSachs.Nopartofthismaterialmaybe(i)copied,photocopiedorduplicatedinanyformbyanymeansor(ii)redistributedwithoutthepriorwrittenconsentofTheGoldmanSachsGroup,Inc.17March202233GoldmanSachsCarbonomics

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