Oil companies set climate goals: – Greenwashing – E24

On Monday, the world’s largest and leading oil companies joined forces to achieve a common climate goal and zero emissions from their operations by 2050.

The letter was signed by senior executives of Saudi Aramco, BP, Chevron, CNBC, Eni, Equinor, ExxonMobil, Occidental, Petrobras, Repsol, Shell and Total. Together, they make up about 30 percent of the world’s oil and gas production.

What does it mean that the world’s largest oil companies have set such goals?

Nordea’s senior analyst for sustainable finance and former oil analyst Thena Saltvedt thinks this shows pressure on oil companies today.

– There is no doubt that this does not come voluntarily. The role of oil companies in society is beginning to change. It is very important that they take responsibility now, Saltvedt tells E24.

Only applicable to emissions in production

Oil companies have listed measures they believe will reduce emissions by about 50 million tons per year by 2025.

This means, among other things, reduced methane emissions in upstream gas production, reduced carbon intensity in special operations, and an end to routine flaring by 2030, which is illegal in Norway.

– The oil companies did not list the most important emissions, which are those that occur in Band 3, that is, when oil and gas are burned, says Saltvedt.

About 90 percent of emissions from oil and gas occur when fossil fuels are used in the market. However, the Saltvedt is positive.

A year and a half ago, it would have been enough if oil companies invested a little in renewables. The analyst says it is now more or less required that they accept and stand behind the 1.5 degree target.

Summon Greenwashing Goals

Helge Drang, a climate researcher at the University of Bergen, is more skeptical about oil companies’ climate goals. He points out that today’s annual global greenhouse gas emissions are about 50 billion tons of carbon dioxide equivalent.

– If oil companies aim to reduce their emissions by 50 million tons of carbon dioxide equivalent per year, as stated in the press release, that represents 0.1 percent of global emissions. It’s almost nothing, Dring says to E24.

He believes the targets set by the oil companies look good, but the level of ambition and activity as such is miles away from the necessary cuts.

Global CO2 emissions must be reduced by 11 percent per year to have a certain probability (67 percent) of limiting global warming to 1.5 degrees. The corresponding reduction is 4 percent per year to limit heating to two degrees.

We know that fossil energy is the main cause of man-made climate change, so it’s hard to see initiatives as anything other than (attempts to) wash one’s activity down, says Dring.

Important with real discounts

Thina Saltvedt believes that it is absolutely essential that oil companies participate in restructuring, cooperate and pay each other.

There will now be a distinction between companies that have strict goals and those that don’t, she says, indicating that more investors expect companies to operate in line with the goals set in the Paris Agreement.

Do you think we will reach zero emissions targets by 2050?

– I think we should make it. We just have to. But how painful will it be? The more we put off big control, Saltvedt says, the worse things get after a while.

The senior analyst thinks it is realistic for the oil companies to reach the targets they have set, but notes that it is important not to rely too much now on the new, uncertain technology that will remove CO2, but they are already planning to make changes to the processes that lead to the reductions.

There is a difference between absolute reductions and carbon intensity reductions. If you only measure density, you can increase oil and gas production, if you only increase the amount of renewable energy. There will be no real discounts.

Equinor will grow in renewables

Equinor’s Chief Information Officer Cecil Rende has received criticism and writes that it is critical to collaborate across national borders, between authorities, industry, investors and society.

It notes that Equinor will reduce net carbon intensity by 40 percent by 2035, and net zero emissions by 2050, including emissions from energy production and consumption.

We will achieve this by reducing emissions from oil and gas production, growing aggressively in renewable energy, especially offshore wind, and developing new low-carbon solutions through the development of carbon capture and storage value chains and hydrogen, Rende says.

Equinor has previously been criticized for not setting absolute short- and medium-term cutting targets. This is because the goal is lower carbon density It does not necessarily mean that the company’s actual emissions will decrease.

The company says it will increase the share of total investments in renewable energy and low-carbon solutions from about 4 percent in 2020 to more than 50 percent by 2030.

– It’s an important change for the company, says Rinde.