The climate targets of oil and gas majors rely heavily on emissions mitigation technologies (EMTs) that are expensive and unproven at scale, analysis by Carbon Tracker has uncovered.
In a report published today, the think tank claims that only four of the world's 15 largest publicly traded oil and gas companies plan absolute cuts in emissions from production and use of products.
Instead, these firms have turned to EMTs, selling assets and buying offsets to cut emissions while justifying continued investment in production.
For example, Eni plans to build plants in the North West of Britain and Ravenna, Italy, which will each capture and store 10 million tonnes (10Mt) of CO2 a year by 2030. However, this only covers industrial processes, and will not reduce emissions from its own products.
Meanwhile, Total lists a 13,500 square kilometre forest in Peru among its offsetting projects, claiming it will help “prevent” more than 15Mt of CO2 over 10 years, but it is not planting any new trees.
The report warns that companies could face litigation, regulatory sanctions, and reputational damage if EMT projects fail to capture or offset the intended amount of carbon.
“Oil and gas companies are gambling on emissions mitigation technologies that pose a huge risk to both investors and the climate,” said Maeve O’Connor, Carbon Tracker analyst and report author.
“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.
“While limiting global temperature rise to 1.5°C will likely require some level of EMTs, 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.”
The report highlights how Chevron, Shell and ExxonMobil have been obliged to buy AU$184m of carbon offsets because their jointly owned Gorgon carbon capture plant in Australia failed to meet targets agreed with the government.
Looking beyond offsets and EMTs, the researchers also explain how selling assets to cut emissions can also lack credibility, because this just shifts emissions from one owner to another who could increase production or operate under less stringent environmental standards.
The analysis shows that Eni is the company with the strongest climate policy, having pledged a 35% cut in absolute emissions by 2030. ExxonMobil has the weakest policy, with its net-zero target excluding 95% of lifecycle emissions from the products it sells.
Mike Coffin, Carbon Tracker's head of oil, gas and mining, said: “Financial institutions must scrutinise companies’ emissions targets and whether their plans to achieve them are practical and credible in order to assess alignment with global climate goals.
“This is particularly so for companies which seek to 'create space' for further fossil investment. The best way for companies to reduce both their climate impact and transition risk exposure for investors is to allow their existing production to decline without investing in new assets.”
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