European Oil Majors Face Mounting Pressure on Emissions
Environmental campaigners have expressed grave doubts over plans announced by six major European oil & gas companies to drastically curb carbon emissions in line with net zero emissions targets by 2050, claiming that these pronouncements have been vastly overstated.
In April this year, Anglo-Dutch super-major Royal Dutch Shell Plc joined five other European majors to announce ambitious plans to become net zero for operational emissions by 2050. But activists believe these six companies would need to cut emissions by 100% to achieve the targets set by the Paris Agreement on climate change signed in 2016, a move which appears to be near impossible to many.
UK-based international super-major BP Plc had also unveiled its “new ambition” earlier this year to sharply reduce the carbon footprint of its operations, with the aim of becoming a net zero company by 2050 or sooner. The company’s stated targets included achieving net zero on carbon produced by its own oil and natural gas production, as well as a 50% cut in the carbon intensity of the products that the company sells.
However, recent research conducted by the Transition Pathway Initiative (TPI), a global, asset-owner led initiative which assesses companies’ preparedness for the transition to a low carbon economy, has revealed that Europe’s six largest oil & gas companies are overstating their climate ambitions. TPI undertook a comprehensive study to compare the pledges to cut emissions made by Shell and BP, along with fellow European majors TOTAL SA, Repsol SA, Eni SpA and OMV AG. Their research highlighted the fact that all of the plans assessed are, to some degree, dependent on Carbon Capture and Storage (CCS) technology and nature-based solutions such as planting trees, rather than attempting to target an overall reduction in crude oil and natural gas production. The initiative also raised concerns that American companies engaged in the production of hydrocarbons are lagging behind their European peers on climate change.
Greenpeace International, a non-governmental environmental organization, recently stated that nothing short of a complete stop to oil drilling would convince them that these ‘Big Oil’ companies are earnestly trying to do something good.
Pressure from activists, policymakers and investors on oil companies to play a greater role in tackling climate change is likely to continue to mount, especially in the aftermath of the recent extreme weather events, from raging forest fires in Australia and California, to deadly floods in the Far East and South Asia, and recurring heatwaves across Europe over the past several years.