Report: Oil majors over-reliant on ‘risky, expensive and unproven’ tech plus offsetting to cut climate impact
A new analysis of the climate plans of 15 of the world’s largest listed oil and gas firms has found that, while 14 now claim they are committed to net-zero, their targets continue to lack credibility.
Published today (12 May) by Carbon Tracker, the ‘Absolute Impact’ report accesses what level of emissions mitigation the 15 companies have committed to and how they plan to deliver their targets.
All of the companies except Chevron have publicly claimed to support the transition to net-zero by 2050, with 13 of 15 having made their target timelines more ambitious in the past 12 months. But the report reveals that many net-zero plans within the sector do not cover emissions from all scopes and are, therefore, not properly science-based. ExxonMobil, for example, does not include Scope 3 (indirect) emissions in its targets, despite the fact that they account for 95% of its total emissions. A further ten of the companies assessed are also failing to cover all Scope 3 emissions from downstream product use in their target remit.
The report also reveals a lack of robust interim targets to back up long-term net-zero visions. Just four of the companies assessed – Eni, Repsol, TotalEnergies and BP – have committed to mitigating emissions by 2030 on an absolute basis. Intensity-based targets are not deemed credible by Carbon Tracker, as they leave room for businesses to continue expanding their absolute emissions footprint.
None of the four companies have committed to at least halving their net absolute emissions by 2030. The most ambitious 2035 target is BP’s, which entails a reduction of at least 35% and as much as 40%. This is despite the Intergovernmental Panel on Climate Change’s (IPCC) recommendation that halving global annual emissions by 2030 will give the world the best chance of limiting the global temperature increase to 1.5C. This is the Paris Agreement’s more ambitious pathway.
Carbon Tracker’s report also expresses concern about how several of the businesses, instead of prioritising in-house emissions reductions, are turning to approaches that may well have less of a real-world climate impact. These approaches include buying offsets, selling assets and scaling up carbon capture technologies.
On offsetting, the report outlines a number of oft-discussed challenges, including sourcing offsets that deliver additional and permanent emissions removal. It questions whether projects which purport to preserve habitats, like a forest scheme in Peru backed by TotalEnergies, are delivering any additional emissions removal.
Selling assets – divestment – is becoming a more popular approach as energy majors strive to meet updated climate goals. But, as the New York Times has stated his week, divestment often results in assets being taken on by buyers with looser climate goals who are willing to exploit production to the maximum. This may well, in reality, increase the lifecycle emissions of the assets.
Carbon Tracker’s report calls man-made carbon capture and storage (CCS) technologies “expensive and unproven at scale”. As of 2020, the global collective capacity of all operational CCS and carbon capture and usage (CCU) plants was estimated to be 38.5 million tonnes, or around one thousandth of global annual emissions.
Companies covered in the Carbon Tracker report with CCS investment plans for their own operations include Occidental and ConocoPhillips. Eni is also investing in CCS at industrial clusters as a means of generating offsets.
Carbon Tracker is concerned that fossil fuel firms may use CCS and CCU as a ‘get-out-of-jail free’ card to continue expanding production, despite bodies including the IPCC and International Energy Agency (IEA) calling for a scaling back of future oil and gas exploration.
“Most of these technologies are still at an early stage of development, with few large projects working at anything like the scale required by company goals, while solutions that involve tree planting require huge areas of land,” said Carbon Tracker analyst Maeve O’Connor, the lead author for today’s report.
“It remains to be seen whether these technologies will be technically feasible or economically viable given the huge costs involved. While limiting global temperature rise to 1.5C will likely require some level of [carbon removal technologies], they should be used to reduce or offset emissions for sectors like aviation or chemicals, where few low-carbon alternatives currently exist, rather than to justify new fossil production.”
O’Connor’s point of view is shared by several organisations to have given evidence to MPs on the UK’s Environmental Audit Committee recently. The Committee stated in March that the future benefits of man-made carbon-negative technologies are “highly uncertain”.
On the other hand, organisations including the Energy Transitions Commission and the Centre for Climate Repair are arguing that carbon removals – man-made and nature-based – will be needed at scale even in the case of “deep” decarbonisation happening globally – largely due to current and historical levels of emissions.
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