Carnarvon Petroleum Limited (ASX: CVN) shares are on the rise today after the company announced it has formed a joint venture to produce green diesel with Frontier Impact Group.
At the time of writing, the Carnarvon share price is trading 1.75% higher at 29 cents.
Let's take a look at what the company announced this morning.
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Green diesel joint venture
Investors are driving the Carnarvon share price higher after the company reported its 50/50 joint venture with Frontier Impact Group will prioritise the production of renewable diesel from plant biomass.
The company reports the $100 million facility can also produce biochar, which can then be refined into graphene for use in the production of batteries and electronics.
The bio-refinery is poised to begin production in late 2022 and will rely on "internationally proven technology" which has never been implemented in Australia before.
Speaking about the company's latest joint venture, Carnarvon chief executive Adrian Cook said:
This joint venture demonstrates a clear and pragmatic start to delivering on our net-zero commitment, while ensuring long-term, sustainable shareholder value remains a key determinant in our decision making.
He added:
There is a clear link between the delivery of our core projects, securing carbon offsets for these through this venture and producing valuable products such as renewable diesel.
Pivoting to show climate-change risks
Carnarvon was on the Australian Securities and Investments Commission's radar in 2020, alongside a run of oil and gas players, for failing to report on its climate-change impacts.
Since these "climate pressures" emerged, the company has produced its first sustainability report, disclosing climate-change risks and actions taken to offset the same.
Carnarvon has today also committed to producing net-zero carbon emissions by 2050 or sooner.
Carnarvon share price snapshot
Over the past month, the Carnarvon share price has climbed by 16%. It has also posted gains of more than 52% over the previous 12 months.
Although the company's shares have outpaced the returna of the S&P/ASX 200 Index (ASX: XJO) over these periods, they have lagged the index on a year-to-date basis, dipping 3.33% since the start of 2021.
At the current share price of 29 cents, Carnarvon has a market capitalisation of $454 million. The share price is off its 52-week high of 34 cents but is aloft its 52-week low of 18 cents.
