Talking Transition
A pivotal year for OGCI member companies’ climate ambitions

December 17, 2020

OGCI published its annual Progress Report this month outlining the progress it made over the year in key areas like reducing methane and carbon dioxide emissions, advancing its CCUS KickStarter hubs and working to accelerate the decarbonization of transport.

But 2020 was also a pivotal year for many of its members. Seven companies announced ground-breaking net zero climate ambitions, targets and strategies – and OGCI has been a forum for companies to catalyse and share the thinking behind and the impact of these announcements both externally and internally. While each company uses its own targets and methodology to track its progress, all seven embrace the goal of being a net zero emissions company by 2050 and address the issue of reducing emissions from the use of oil and gas products (known as Scope 3).

Repsol launched the wave of rethinking when it announced in December 2019 that it was aiming to be a net zero company by 2050, on both its operations and the use of its products. It presented its detailed 2021-25 strategic plan in November 2020, outlining more ambitious intermediate targets on the road to decarbonizing its asset portfolio. This strategy relies on a multi-energy offering that combines all the technologies needed for the decarbonization of energy.

Equinor announced in January 2020 that it would reduce absolute greenhouse gas emissions from its Norwegian operations by 40% by 2030. In February, it announced it would aim to make its global operations carbon-neutral by 2030 and halve the net carbon intensity of energy produced by 2050. And in November, the new CEO Anders Opedal announced Equinor’s ambition to become a net zero company by 2050, including emissions from both production and final consumption.

bp’s new CEO Bernard Looney announced the company’s ambition to be net zero by 2050 or sooner in February 2020, covering both its operations and products. In August, bp laid out its strategy to 2030, with plans to increase low carbon investment ten-fold, cut oil and gas production by 40% and reduce the carbon intensity of products by 15% over the next decade.

Eni announced in February 2020 a detailed business strategy to reduce net absolute lifecycle emissions, associated with operation and products, by 80% by 2050, and net carbon intensity by 55% by 2050 versus 2018, while reaching carbon neutrality across its upstream operations by 2030 and across the group’s global operations by 2040.

Shell, announced its ambition in April 2020 to become a net-zero emissions energy business by 2050 or sooner. It aims to be net zero on emissions from its operations by 2050 at the latest, with a reduction that is aligned with a 1.5DC scenario. For the energy products sold to customers, Shell aims to reduce the net carbon footprint by 30% by 2035 and by 65% by 2050.

Total proposed in May 2020 three major steps towards meeting its climate ambitions for 2050. These were: net zero across its worldwide operations, net zero across energy products used by its customers in Europe, and at least a 60% reduction in the average carbon intensity of its energy products used by customers worldwide.

Occidental announced in November 2020 a target to reach net zero emissions associated with its operations before 2040 and an ambition to achieve net zero emissions associated with the use of its products by 2050. Occidental is the first US oil major to announce a net zero ambition that includes Scope 3 emissions.

Driving ambition

The ability to learn and take inspiration from each other’s experiences is a major factor driving climate ambition across OGCI member companies.

CNPC announced in July that it would halve its upstream methane intensity by 2025, having launched initial pilot projects in support of OGCI’s collective target. It is now working on a strategy to meet China’s national target to achieve carbon neutrality by 2060, announced in September.

Petrobras announced in July its explicit support to the Taskforce on Climate-related Financial Disclosure and improved its disclosure on performance and financial metrics. In November. Petrobras raised its ambitions again, releasing a commitment to reduce absolute company-wide operational greenhouse gas emissions 25% by 2030. Petrobras has already reduced upstream carbon intensity by 42% over the past decade and its total operated absolute emissions are now at 2009 levels.

In December, ExxonMobil announced 2025 greenhouse gas reduction plans that are projected to be consistent with the goals of the Paris Agreement. The plans include reducing the intensity of operated upstream greenhouse gas emissions by 15-20% by 2025, compared to 2016 levels. This will be supported by a 40-50% decrease in methane intensity, and a 35-45% decrease in flaring intensity across its global operations. The company aims for industry-leading greenhouse gas performance across its businesses by 2030.

Aramco was a key driver behind OGCI’s new carbon intensity target, having reduced the carbon intensity of its own operations to one of the lowest in the industry. Aramco experts are actively sharing the lessons from its successful efficiency and emissions reduction programmes with other member companies and the wider industry. Aramco and CNPC also led the efforts this year to identify opportunities for reducing transport emissions.

Chevron supports the global net zero ambitions of the Paris Agreement. The company has set net short-term greenhouse gas intensity targets by commodity on an equity basis and tied these to an annual variable pay programme for Chevron’s executives and most employees. The 2023 intensity metrics include upstream greenhouse gas intensity for oil (5-10%), gas (2-5%), methane (20-25%) and flaring (25-30%).

Now on to 2021…

As this challenging but important year draws to a close, OGCI looks forward to working with stakeholders throughout 2021 to help make the COP26 climate summit in Glasgow a turning point in both global climate ambition and implementation.