Commitments to reducing overall greenhouse emissions stall for second year running
LONDON, 14 November – Oil and gas companies are exacerbating the climate crisis by failing to set strict targets to stop methane leaking into the atmosphere, while overall action to cut emissions globally remains weak at best and sometimes non-existent, finds a report from the financial think tank Carbon Tracker released today.
Methane is a powerful greenhouse gas, and while most large producers have announced plans to cut emissions from their operated Upstream assets to “near zero” by 2030, the report reveals none have set targets that cover all methane emissions related to their business activities.
Absolute Impact 2024 assesses and ranks pledges to reduce greenhouse gas emissions made by 30 of the largest oil and gas producers. It reveals that the industry’s commitment to reducing emissions has stalled for the second year running and also warns that companies’ strategies for meeting their emissions targets are of “questionable credibility”.
It finds that no company is aligned with the Paris goal of limiting global warming to well below 2°C. European companies Eni, TotalEnergies, Repsol and bp rank highest, pledging absolute reductions in greenhouse gas emissions from the production and use of their products by 2030. However, most companies’ targets cover emissions from their operations only, including ExxonMobil, ConocoPhillips, and state-owned national oil companies (NOCs) such as Pemex, Petrobras and Saudi Aramco.
Olivia Bisel, lead author and Associate Analyst, Oil & Gas, said: “Oil and gas companies are paying lip service to climate action while emissions from their products are fuelling increasingly severe storms, droughts, floods and heatwaves around the world. Greenhouse gas emissions must fall rapidly to avert even more devastating impacts and so it is essential that companies incorporate within their targets the huge volume of emissions that result from the use of the products they sell.”
Richard Collett-White, co-author and an Analyst, Oil & Gas, said: “Oil and gas producers are not setting targets to cut methane emissions from all their activities, despite this being one of the most feasible and high-impact climate solutions available. They also continue to rely on doubtful estimates rather than measure emissions directly, and their targets should be viewed with scepticism until they do so.”
The report is designed to help investors, banks, regulators and policy makers navigate the complexity of companies’ different climate targets by assessing them against key criteria. This year Carbon Tracker has added a new criterion focussing on methane and it has also added five wholly state-owned national oil companies to its analysis.
Reducing methane emissions is one of the fastest and most achievable ways of slowing global warming. Methane has 82-87 times the warming potential of CO2 in the 20 years after it is released into the atmosphere[1] and is responsible for about a third of the global warming to date. About a third of human-driven methane emissions come from fossil fuels.[2]
While nearly all companies aim to achieve “near-zero” methane emissions, as defined by the UN Environment Programme’s Oil & Gas Methane Partnership 2.0 and World Bank criteria, the report identifies major loopholes.
Joint ventures that companies do not directly operate often account for a significant proportion of corporate methane emissions,[3] yet Chevron is the only company whose target covers these. “This is a particular blind spot for the other majors, including Eni and TotalEnergies, that hold significant stakes in assets operated by companies with worse methane standards and in countries with high average methane intensities, such as Algeria and Egypt” the report says.
Many companies own or operate midstream gas infrastructure, such as gas pipelines and LNG tankers, which can emit a large amount of methane, but these are not covered by most targets.
The report notes that a reduction in flaring gas is a cost-effective way of reducing methane emissions. While 25 of the 30 oil and gas producers have committed to eliminate “routine” flaring by 2030, it says this accounts for a small proportion of some companies’ total reported flaring and very few have committed to eliminate all non-emergency flaring.
Absolute Impact 2024 assesses companies against four key “Hallmarks of Paris-Aligned Emissions Targets”. To be potentially considered Paris-aligned, greenhouse gas emissions targets must:
- Cover the full lifecycle emissions of their oil and gas products, including “Scope 3” emissions from end use, which account for around 85% of lifecycle emissions;
- Target net zero by 2050 on a full lifecycle basis, setting interim targets for absolute reductions;
- Cover worldwide emissions from all projects in which they have a stake, including sales of products they refine from crude oil bought from other companies;
- Target near-zero methane by 2030 across all projects in which they have a stake for both upstream oil and gas and midstream gas activities. (applies to methane-specific targets only)
Although Shell and Equinor are among companies that have updated their overall GHG targets since 2023 the report finds these changes are “unlikely to materially reduce emissions”. No company fully meets the fourth Hallmark on methane.
To provide a relative ranking of corporate targets. Carbon Tracker groups companies into four bands according to the strength of their targets.
Eni remains the company with the strongest overarching targets, the only one to meet all of the first three Hallmarks.
bp, Repsol and TotalEnergies have also pledged absolute full lifecycle reductions by 2030, but their targets do not cover every project in which they have a stake, and bp and Repsol also fail to include downstream products made from third party crude oil.
Shell, Equinor and Occidental remain in a second tier of companies which have pledged net-zero emissions by 2050, covering the full lifecycle of their products, but with no interim full lifecycle targets.
Chevron’s targets cover full lifecycle emissions for all projects in which it has a stake and downstream sales that use third-party crude, but it has not pledged to reduce the full lifecycle emissions of both oil and gas to net zero.
The report says that companies can only be considered Paris-aligned if they meet the four Hallmarks and also have a credible strategy to reduce emissions, yet no companies are planning to allow their oil and gas fields to deplete naturally, the most credible strategy.
Mike Coffin, Head of Oil, Gas and Mining, said: “This analysis enables a range of stakeholders to assess whether corporate plans are compatible – or not – with the rapid transition away from fossil-fuel based energy required to meet Paris goals. The slower the transition, the greater the physical impacts and thus financial costs of adaption felt by all.”
The vast majority of companies, including the eight with the strongest targets, plan to achieve their goals through a combination of asset sales, deploying carbon capture, utilisation and storage (CCUS), or using nature-based solutions (NBS) such as tree planting.
Eni and bp have publicly announced that selling off assets forms part of their strategy to reduce their emissions, but this likely makes little difference to global emissions and may actually increase them. In September, Carbon Tracker released a set of Responsible Exit Principles for oil and gas companies that set out best practice in the disposal of such assets to mitigate risks of transferring to companies with lower operational standards, which may actually result in higher emissions overall.
All the top eight companies in the rankings plan to use CCUS although development is costly, and the technology may not be capable of permanently storing the planned volume of emissions. All eight bar Repsol, have announced plans to use NBS to reduce their emissions, although it is unlikely that these solutions can be deployed at the scale required.
When embargo lifts the report can be downloaded here: https://carbontracker.org/reports/absolute-impact-2024/
To arrange interviews please contact:
Joel Benjamin | jbenjamin@carbontracker.org | M: 07429637423
Stefano Ambrogi | sambrogi@carbontracker.org | M: 07557916940
Notes to Editors:
About Carbon Tracker
The Carbon Tracker Initiative is a not-for-profit financial think tank that seeks to promote a climate-secure global energy market by aligning capital markets with climate reality. Our research to date on the carbon bubble, unburnable carbon and stranded assets has begun a new debate on how to align the financial system with the energy transition to a low carbon future. www.carbontracker.org
[1] IEA: Understanding methane emissions
[2] UN Environment Programme: Fact About Methane.
[3] EDF: Joint Action Catalyzing Methane Emission Reduction at Oil and Gas Joint Ventures
