Exxon sets net-zero greenhouse gas emissions target for 2050
HOUSTON — Exxon Mobil, under mounting pressure from investors to tackle climate change, announced on Tuesday that it has “an ambition” to achieve net zero greenhouse gas emissions from its operations by 2050.
The oil company, the largest in the United States, still lags behind several of its main competitors in its public commitments for the climate.
Exxon said it has identified 150 changes to its exploration and production practices to help meet its goals, including electrifying operations with power from renewable sources. The first steps will include eliminating flaring and venting methane, a byproduct of drilling that is a potent greenhouse gas.
“We have a line of sight,” Exxon Chief Executive Darren Woods said in an interview. “By the end of this year, 90% of our assets will have roadmaps to reduce emissions and achieve that net zero future.”
Exxon’s targets include so-called Scope 1 emissions, which are produced directly by the company, and Scope 2 emissions from the production of electricity that Exxon purchases, such as electricity supplied by utilities.
But the new policies stop short of including Scope 3 emissions, which result from the combustion of fuels by drivers and other customers, as well as other businesses along the supply chain. of Exxon. The overwhelming majority of business-related emissions are Scope 3, and they are the hardest to control or offset.
European companies have begun to adopt commitments to Scope 3, which will require immense efforts, including reforestation, carbon capture and removal from operations and technological advancements such as fuels made from from recycled carbon. Many companies are selling off hydrocarbon businesses and redirecting resources to renewable energy such as solar and wind power.
Shell, Europe’s largest oil company, has set a net zero emissions target for 2050 that includes Scope 3, which it says accounts for more than 90% of its emissions. Equinor, Norway’s national oil company, has a similar goal, as does BP, although it has ruled out joint operations with Rosneft, a Russian company.
By aiming for “net zero”, companies would eliminate more carbon than they release into the air.
The only US company that has committed to eliminating Scope 3 emissions is Occidental Petroleum, one of Exxon’s main competitors in the Permian Basin in Texas, where it plans to suck carbon from the air and bury it in the ground. Chevron, the second-largest U.S. oil company, announced in October “an aspiration” to net-zero emissions by 2050 from its operations, a move similar to Exxon’s announcement on Tuesday.
Environmentalists insist that Exxon and other oil companies must adopt Scope 3 targets.
“It is necessary but not sufficient to fully address Scope 1 and Scope 2 emissions given that the major impact of oil and gas is in the sale and use of the product,” said Mark Brownstein, senior vice president for energy at the Environmental Defense Fund. “Being an energy solutions provider means you care about the carbon footprint as well as the energy content of the products you supply.”
Mr Woods said his company is working to reduce Scope 3 emissions by working on carbon capture and sequestration and advanced low-carbon fuels for aviation and other transportation. heavy.
“There are opportunities as we continue to advance carbon capture,” he said. “There will be opportunities to commercialize this technology and help others reduce their emissions.”
The pressure on Exxon has grown since activist investors won three of its 12 board seats in June in a resounding loss for management. Mr Woods said council members were now ‘unified’, adding: ‘You can’t tell the difference between new and old’.
Exxon created a low-carbon solutions business last year to accelerate the development of carbon capture and storage, hydrogen projects and biofuels. He hopes to drive a carbon capture and storage project on the Houston Shipping Channel to become a global model, though a carbon tax or other carbon price is needed to make it profitable.
Its Canadian subsidiary, Imperial Oil, plans to produce renewable diesel to reduce emissions from heavy transport. This month, Exxon acquired a nearly 50% stake in Biojet, a Norwegian biofuels company that plans to convert wood and wood construction waste into low-carbon biofuel.
Exxon has also set targets internationally. It recently signed a memorandum with Pertamina, Indonesia’s state-owned oil company, to assess potential large-scale carbon capture and storage projects in Indonesia.
The company said it plans to invest $15 billion to reduce emissions over the next six years. Much of this money will go to the development of carbon capture and storage, hydrogen energy and biofuels. The executive summary of his plans said “smart government policies,” such as some form of carbon pricing, were important “to establish market incentives” like those that have supported electric cars and renewables.
“We’re working closely with policymakers to help them see what kinds of constructive policies can be put in place” to push Exxon’s carbon capture and other climate efforts, Woods said.
But such efforts have so far failed to satisfy much of the investment community. Last month, UBS Asset Management said it was selling its shares in Exxon as part of a divestment from oil and gas companies it saw as climate change policy laggards.
Mark van Baal, a Dutch investor activist who has been encouraging environmental action by European companies for years, announced that his group of investors would ask Exxon to set emissions targets that concern not only its operations, but also the emissions of its customers.
“It’s a step towards a more ambitious approach to tackling climate change, but on its own it’s very modest,” said Andrew Logan, senior director of Ceres, a nonprofit that pushes companies to take climate change seriously on behalf of investors. .
Mr Logan also said Exxon’s reliance on biofuels and carbon capture was a concern. “If he’s betting that much on these technologies that depend on outside action, that’s a somewhat risky approach to take.”
Exxon’s position on emissions has evolved over the past year. In March, Mr Woods pledged his business was ‘sustainable’ to zero emissions targets and would try to set a target of not emitting more greenhouse gases than it was removing from the atmosphere, but he added that it was difficult to say when that would happen.
Last month, the company announced that it would aim to achieve net greenhouse gas emissions from its operations in the West Texas and New Mexico oil and gas fields by 2030. It has pledged to electrify its operations, improving its ability to detect and capture methane. natural gas and eliminate the routine combustion of waste gases emitted from oil wells.