Oil, gas sector emission pledges stalling – report
Oil and gas firms' emission reduction commitments fall short, jeopardizing climate goals and investor interests
Oil and gas sector emission reduction pledges have stalled and in some cases gone backwards, a report said on Thursday, warning that many corporate climate plans were not credible.
Fossil fuel use is set to be the main bone of contention at key UN talks aimed at curbing climate change, starting on November 30 in the oil-rich United Arab Emirates.
A report by financial think tank Carbon Tracker assessed and ranked emissions reductions commitments by 25 of the world’s largest oil and gas firms, as measured by 2022 production volumes.
According to its criteria, all but one of the companies’ emissions goals are not aligned with the 2015 Paris Agreement’s aspirational target of limiting global warming to 1.5 degrees Celsius above pre-industrial levels.
The weakest commitments came from US major ExxonMobil and five majority state-owned oil firms: Saudi Aramco, Brazil’s Petrobras and Chinese companies Sinopec, PetroChina and CNOOC.
Aramco was ranked at the bottom because it was the only company to limit emissions reductions targets to assets it wholly owns and operates.
It has only pledged to reduce emissions against amounts forecast under “business-as-usual” scenarios and set no baseline, Carbon Tracker said.
Some 16 firms only covered operational emissions and failed to take into account indirect emissions linked to the full life cycle and use of their products.
Others such as British-Dutch giant Shell and Norway’s Equinor have 2050 net-zero goals covering full life cycle emissions, but have not set interim targets.
Some company pledges have regressed since Carbon Tracker’s 2022 analysis.
BP watered down a previous 2030 production cut target and Shell has announced its “liquids” production will remain stable to the end of this decade, the report noted, referring to liquefied natural gas and liquefied natural petroleum.
Change is ‘inevitable’
Italy’s Eni was “potentially” the exception, but even its emissions targets are questionable as they rely heavily on asset sales, nature-based solutions, offsets and the unproven technology of carbon capture and storage.
Divestments and selling assets do not necessarily reduce emissions, and a reliance on third-party offsets and unproven technology undermine the credibility of climate plans, said report co-author Saidrasul Ashrafkhanov.
The pace of emissions reductions must be fast enough to meet the 1.5C goal and deliver “real cuts in global emissions”, he added.
These industry titans “are continuing to put investors at risk by failing to plan for production cuts” in line with the Paris goal, wrote co-author Mike Coffin.
“Financial services firms should monitor whether the companies they fund or underwrite are adequately prepared for the inevitable change in the global energy system.”
At previous high-level climate talks, key oil producers and consumers — including Saudi Arabia and China — have focused on the need to reduce emissions rather than the use of fossil fuels per se.
That clashes with demands by other nations to phase out “unabated” fossil fuel use.
The report excluded national oil companies fully owned by the state or firms based in Russia where investors have little influence.