Stockholm (NordSIP) – According to the Transition Pathways Initiative’s (TPI) latest briefing on the carbon performance of European integrated oil and gas companies, the industry still has a long way to go before it can make claims of alignment with below 2°C scenarios.
Leaders and Laggards
The new research from the TPI assesses the recent climate change announcements from BP, OMV, Repsol, Total, Shell and Eni and whether they are consistent with the Paris Agreement. According to the briefing paper, of the top six European oil and gas companies, Shell and Eni have the most ambitious emissions-reduction plans, followed by Total.
Shell has committed to cut emissions intensity by 65% by 2050. According to the TPI, this goal puts Shell ahead of the pack and close to being aligned with a 2°C scenario. Eni’s has committed to reducing intensity by 55% and absolute emissions by 80%. TPI commends the commitment for including disclosure on the expected contribution of offsets and represents a comprehensive strategic response. France’s Total has committed to a 60% cutting emissions intensity by 2050. However, the TPI was not impressed with BPs commitment to reduce emissions (including Scope 3) by 50% by 2050, given that the commitment excludes trading/supply and crude oil sales, which account for over 800 MtCO2e emissions annually, according to the TPI.
“Shell and Eni are leaders, and Shell have introduced a new concept of not selling energy to customers that are not also aligned to net-zero pathways in key sectors such as aviation, shipping and freight. This warrants further analysis to quantify the emissions reductions of such an approach,” noted Adam Matthews, Co-Chair of TPI, and Director of Ethics and Engagement for the Church of England Pensions Board.
More Ambitious Commitments are Needed
The TPI argues that claims to be aligned with ‘net-zero’ or 1.5°C are exaggerated. “The claims of ‘net zero’ or 1.5°C alignment that has been made by these companies are not substantiated by TPI’s analysis.” According to its assessment, “the average European oil and gas company would need to cut its emissions intensity by over 70% between 2018 and 2050 to align with a 2°C climate scenario by 2050, while a genuine net-zero strategy would require a 100% cut in absolute emissions.”
“The European integrated oil and gas sector is changing rapidly. Three years ago, no company had set targets to reduce the carbon intensity of the energy they supply. Today all six oil and gas majors assessed by TPI have set such targets,” Matthews adds.
However, “TPI’s analysis underlines that these commitments are not all equal in ambition or in scope and deeper decarbonisation is needed to align with a 1.5°C or even a 2°C scenario. Investor engagement, through initiatives such as CA100+, will be critical in ensuring current momentum toward net-zero is sustained. Based on TPI’s analysis investors can now determine a net-zero standard for the oil and gas sector that includes absolute emissions and emissions intensity targets covering all downstream, Scope 3 emissions. Critically, these targets must apply to all energy products sold, including those acquired from third parties.”