Equinor to dramatically increase wind investment under new climate strategy
Energy major Equinor has pledged to grow its renewable energy generation capacity tenfold over the next six years, in a major shake-up to its climate targets.
The firm announced late last week a new ambition to reduce the net carbon intensity of its energy by at least 50% by 2050, against a 2019 baseline. Emissions from across the value chain, from initial production to final consumption, will be measured under this metric.
In order to reach this target, Equinor has pledged to develop a wind generation portfolio of at least 4-6GW by 2026, rising to 12-16GW by 2035. The firm currently has around 400-600MW of wind capacity and says its ability to grow this will “depend on the availability of attractive project opportunities”.
Equinor will also up investment in hydrogen and carbon capture, usage and storage (CCUS) technologies, it confirmed in a statement.
At the same time, Equinor has said it will produce less oil. But it has not set any numerical, time-bound targets on degrowth for its oil business. Instead, it has vowed to reach net-zero carbon in global operations by 2030 by investing in efficiency measures across oil and gas projects before offsetting residual emissions. Routine flaring will also be banned at all fossil fuel facilities by 2030.
“We are now looking 30 years into the future, and it is not possible to predict an exact shape and pace of the transition,” Equinor chief executive Eldar Saetre said.
“But we know there will have to be significant changes in the energy markets, and our portfolio will change accordingly to remain competitive. We will produce less oil in a low carbon future, but value creation from oil and gas will still be high, and renewables give significant new opportunities to create attractive returns and growth.”
Road to (near) zero
Equinor first announced plans to set a 2050 carbon intensity target last month, when it unveiled an ambition to bring the carbon footprint of its onshore plants and offshore fields to "near zero" by mid-century.
This long-term aim is bolstered by interim targets of a 40% emissions reduction by 2030 and a 70% reduction by 2040 – both set against a 2018 baseline.
The business has earmarked 50 billion NOK (£4.33bn) for meeting its 2030 target alone and has pledged to increase its internal carbon price to $55 per tonne in order to spur further investment.
Equinor claims that these targets are in line with the Paris Agreement’s 1.5C trajectory and that its work will support “the establishment of global carbon market mechanisms as outlined in the Paris texts”.
But critics have claimed that the firm’s strategy is “too little, too late”, and called for it to move out of oil and gas entirely in order to prove it is serious about capping the global temperature increase at 1.5C. WWF Norway has led this call to action.
More broadly, a recent report from the International Energy Agency (IEA) found that less than 1% of the investments collectively made by oil and gas giants in 2018 went towards low-carbon activities such as building renewable energy infrastructure or installing CCUS.