ExxonMobil discloses emissions of oil and gas product use for the first time
ExxonMobil has disclosed the full extent of its Scope 3 (indirect) emissions from the final use of its energy products, which are more than Canada's national annual emissions.
The US-based fossil fuel major has repeatedly been criticised by investors and green groups for focusing on Scope 1 (direct) and Scope 2 (power-related) emissions in its environmental disclosures, given that Scope 3 will make up the largest proportion of most corporates’ emissions.
Criticism had been intensifying during the climate strikes of 2019 and the Covid-19 pandemic, which led to a slump in oil demand and serves as the backdrop for the global green recovery movement. March 2020 saw ExxonMobil successfully throwing out a shareholder proposal that would require it to disclose Scope 3 emissions and set out Paris-Agreement-aligned plans.
But the firm has since made a U-turn. In an ‘Energy and Carbon Summary’ published this week, ExxonMobil revealed that its Scope 3 emissions from petroleum product sales in 2019 were equivalent to 730 million metric tonnes of CO2.
Bloomberg claims this is the highest figure for that year among all Western oil majors. Moreover, unlike competitors including Shell and BP, ExxonMobil has not included time-bound numerical targets to cut Scope 3 emissions in its long-term climate plan.
ExxonMobil said in the summary that it was providing Scope 3 data as “stakeholders have expressed a growing interest”. The summary also states that, because ExxonMobil has not disclosed annual Scope 3 emissions before, the data “do not provide meaningful insight into the company’s emission-reduction performance”.
As for Scope 1 and 2 emissions, the summary claims that figures were down 3.2% year-on-year in 2019 to 120 million tonnes of CO2e – making them the lowest for the company in more than a decade.
The publication of the summary comes shortly after ExxonMobil outlined new emission reduction plans through to 2025. It is ultimately striving to ensure that every barrel of oil produced in 2025 generates one-fifth fewer emissions over its life cycle than in 2016. Supporting targets to decrease methane intensity by 40-50% and flaring intensity by 35%-45% have been set.
The plans were broadly criticised by green groups, who pointed to the company’s short-termism and argued that more ambitious reductions will be necessary to prevent warming beyond the Paris Agreement’s trajectories. Anger was directed at ExxonMobil’s decision to use metrics that would enable it to increase production, and its assertation that oil and gas will “face little risk from declining demand” through to 2040 in a Paris-aligned world.
Some analysts believe that a side effect of the ongoing pandemic will be that peak oil will come sooner. BP recently claimed that it may have already happened, should governments deliver a joined-up green recovery approach. As such, there are growing financial risks, as well as climate risks, attached to fossil fuel assets.
ExxonMobil recently confirmed plans to write down the value of its gas assets by $17-20bn, prompting a fall in its share prices. The summary states that the board has a “well-established and rigorous” framework for assessing and minimising climate risks, but investors and green groups have been pushing the business – and others in the sector – to get ahead of the regulatory curve and adopt the recommendations of the Taskforce on Climate-Related Disclosures (TCFD).