Exxon pledges $15bn to meet updated decarbonisation targets, but fails to align with climate science
ExxonMobil has announced a new plan to reduce absolute emissions by 20% by 2030 and kick-started a $15bn investment plan through to 2027. But the firm will likely continue to face intense scrutiny from the green economy.
The US-based, multinational energy major has this week announced that it will reach its 2025 targets for reducing emissions by the end of 2021. These include reducing the emissions intensity of upstream operations by 15-20% against a 2016 baseline, with a more rapid reduction in methane than in carbon.
As such, Exxon has set new targets through to 2030 which it has stated will reduce the company’s direct (Scope 1) and power-related (Scope 2) emissions by 20% against 2020 levels.
These include reducing the emissions intensity of upstream activities by 40-50%. Steeper targets have been set for flaring (60-70% intensity reduction) and methane across the corporation (70-80% intensity reduction).
Exxon will allocate $15bn through to 2027 to deliver the efficiency improvements needed to deliver the new targets. There will also be increased investments in carbon capture and storage (CCS), biofuels and low-carbon hydrogen – but only in markets where “supportive policies currently exist”.
However, Exxon has stopped short of setting any new plans for tackling Scope 3 (indirect) emissions. For fossil fuel majors, the end-use of products typically accounts for the majority of overall emissions. Exxon first disclosed Scope 3 emissions earlier this year.
Additionally, a 20% reduction in absolute emissions is in no way compatible with the Paris Agreement’s temperature pathways. The Intergovernmental Panel on Climate Change (IPCC) has repeatedly stated that global emissions will need to be at least halved by 2030 to give the best chance of capping the global temperature increase to 1.5C. The International Energy Agency (IEA) is recommending that all new fossil fuel exploration is halted to put the world on track for a net-zero energy system by 2050.
Exxon has described its new emissions goals as “more aggressive” but they are unlikely to impress green groups or sustainability-minded investors. Back in May, Exxon shareholders appointed two independent director candidates from climate action group Engine No. 1 to the board.
Exxon’s chairman and chief executive Darren Woods has stated that the company wishes to “leverage its competitive advantages while maintaining flexibility to respond to future policy changes and technology advances associated with the energy transition.”
Nonprofit Ceres has stated that Exxon remains “well behind its peers” in terms of climate strategy.
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