What Big Oil says about climate change

By Adam Branson

November 9, 2023

What strategies do the oil majors have to achieve net zero?

Debate on fossil fuels will continue at Cop28
Some are calling for a speedy phase-out
Oil companies have their own net zero targets

The role to be played by Big Oil in global efforts to tackle climate change will be central to the debate at the Cop28 summit that begins in Dubai in three weeks.

Ending the world’s dependence on oil in its current form is seen as vital if the worst effects of rising temperatures are to be avoided.

There is little agreement on how the largest oil companies can change. Opec secretary general Haitham Al Ghais said in October that energy security could only be achieved if the industry pumps oil for another two decades.

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“We see investments required from now to 2045 for the oil industry alone of around $14 trillion,” he told the Adipec conference in Abu Dhabi. “This is what we need to assure energy security for Europe and the rest of the world.”

Meanwhile, European Union diplomats are calling for a “global phase-out of fossil fuels” in their latest draft proposal for Cop28, according to Reuters.

So, what do the Big Oil companies – some of which are expected to attend the summit – have to say on the matter? Here are the strategies adopted by the world’s five largest oil companies (based on revenue for the full year 2022, according to market data provider YCharts).

Saudi Aramco

Revenue: $590.3 billion

Saudi Aramco is placing a great deal of emphasis on the development and deployment of carbon reduction technologies. In October the oil giant said it was “further advancing the development of emissions reduction solutions, including lower-carbon hydrogen, direct air capture of carbon dioxide – a novel approach to CO2 storage that involves turning carbon dioxide into stone – and the harnessing of geothermal energy”.

This, Aramco added, was in line with its previously stated ambition to achieve net-zero greenhouse gas emissions across its wholly owned and operated assets by 2050, as well as the kingdom’s national 2060 net-zero ambition. The 2050 target covers scope 1 emissions, which are those directly made by the company, and scope 2 emissions – those linked to the energy that a company buys to run its operations.

“We are working on multiple fronts, partnering with leaders in a variety of fields, to advance technology solutions with the potential to make a real impact,” said Ahmad Al Khowaiter, Aramco’s executive vice-president of technology and innovation.

China Petroleum & Chemical Corp (Sinopec)

Revenue: $486.8 billion

Sinopec has committed to achieving net zero emissions by 2050, with goals for scope 1, 2 and 3 emissions, according to research firm GlobalData (scope 3 measures other emissions in a company’s value chain – those that are outside its operations, but it is responsible for).

GlobalData said in July: “Sinopec’s carbon emissions trend has been decreasing, with direct and energy indirect greenhouse gas emissions falling from 59-61 million tonnes CO2-equivalent in 2021 to 51-57 million tonnes CO2-equivalent in 2022.”

Citing Sinopec’s 2022 Sustainability Report, the research consultancy added: “In 2022, [Sinopec] launched energy initiatives that reduced carbon dioxide emissions by 1.44 million tonnes.” The company has also set targets to reduce its energy consumption and increase its use of clean energy.

PetroChina Co

Revenue: $486.4 billion

PetroChina has set out a three-stage plan to achieve “near zero” emissions by 2050. Between 2021 and 2025, it intends to “enhance clean energy utilisation, promote integration of natural gas and new energy, conduct research on hydrogen supply chains and implement energy-saving and pollution reduction measures to facilitate a transition to clean and sustainable energy sources”, according to GlobalData.

Over 2026-2035, the plan is to “surpass self-consumption of fossil fuel with green and zero-carbon energy” and “achieve a balanced portfolio of new energies, oil and natural gas while transitioning to thermal power, electricity and hydrogen power”.

Exxon Mobil Corp

Revenue: $386.8 billion

The Texas company is planning to reduce emissions intensity significantly by 2030. It has set targets for:

A 20-30 percent cut in corporate-wide greenhouse gas intensity
A 40-50 percent reduction in upstream greenhouse gas intensity
A 70-80 percent drop in corporate-wide methane intensity
A 60-70 percent reduction in corporate-wide flaring intensity.

All targets cover scope 1 and 2 emissions compared to a 2016 baseline.

A report, published last December, outlined recent updates. Exxon Mobil has “increased the amount we intend to invest through 2027 on lower-emission initiatives to approximately $17 billion, up by nearly 15 percent” and “reduced our scope 1 and 2 emissions intensity in our operated assets by more than 10 percent, resulting in an approximately 15 percent absolute reduction through year-end 2022 versus 2016 levels”, it said.

Shell

Revenue: $365.3 billion

Shell says its target is to “become a net-zero emissions energy business by 2050”. In order to “step up the pace of change”, it set a target in October 2021 to reduce absolute emissions by 50 percent by 2030, compared to 2016 levels. The target covers all scope 1 and scope 2 emissions.

“This complements our targets to reduce the net carbon intensity of the energy products we sell, [which] includes short-term targets of 3-4 percent by 2022, 6-8 percent by 2023, 9-12 percent by 2024 and 9-13 percent by 2025 compared to 2016,” the company said.

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