Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

Europe's energy giants turn greener, but paths and targets diverge

Published 05/05/2020, 12:46
Updated 05/05/2020, 13:05
© Reuters. FILE PHOTO: Equipment used to process carbon dioxide, crude oil and water is seen at an Occidental Petroleum Corp enhanced oil recovery project in Hobbs

By Shadia Nasralla and Ron Bousso

LONDON (Reuters) - Europe's top oil and gas companies, which account for roughly 7% of global crude consumption, have committed themselves to greenhouse gas emission reduction targets which vary in scope and detail, making them hard for investors to compare.

Graphic: European oil companies - share of global consumption - https://fingfx.thomsonreuters.com/gfx/ce/7/8805/8786/Pasted%20Image.jpg

Many climate ambitions among oil majors relate to results three decades into the future and depend on carbon offsets, whose availability is finite, and carbon capture and storage, a technology not currently deployed at commercial scale.

What does this mean, say, for the carbon footprint of a car driver at a petrol station?

If we take BP (LON:BP) as an example, emissions from its own barrels, from wellhead to passenger car exhaust, amount to around 415 million tonnes of carbon dioxide equivalent a year.

BP says it will reduce these emissions - roughly the same as Britain's annual emissions - to net zero by 2050.

The net zero target does not cover crude and refined products that BP trades but which are initially brought out of the ground by other producers, a total which is much larger than the oil and gas BP produces itself. It says it aims to halve the carbon density of all energy that it trades by 2050.

Graphic: BP's greenhouse gas emission targets - https://fingfx.thomsonreuters.com/gfx/ce/7/8806/8787/BP%20emissions%20targets.jpg

BP's peer Royal Dutch Shell (LON:RDSa) has the oil and gas sector's broadest plan to reduce greenhouse gas emissions to net zero by 2050, although it depends on pivoting "towards serving businesses and sectors that by 2050 are also net-zero emissions".

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

This means Shell relies on its customers' choices to reach its aim.

Graphic: Shell's climate ambition - https://fingfx.thomsonreuters.com/gfx/ce/ygdpzeekvwa/Shell%20climate.png

French major Total pledged to cut to zero the greenhouse gas emissions from its operations, such as oil fields, globally by 2050. Such emissions from a group's operations and from the electricity used for them are also known as Scope 1 and 2.

But its broader 2050 net zero carbon plan covering emissions from fuels made from the oil and gas it extracts, such as gasoline, and sold to customers - also known as Scope 3 - only applies to Europe.

Graphic: Total's climate targets - https://fingfx.thomsonreuters.com/gfx/ce/yzdvxoxmqpx/Total's%20climate%20targets.png

As for emissions from its global fuel sales, it wants to reduce the carbon intensity of energy products used by Total customers by 2050 to less than 27.5 grammes CO2 equivalent per megajoule.

An intensity-based target allows for absolute emissions to increase if volumes sold go up.

Equinor has also pledged to halve the intensity of the energy products it produces and sells by 2050, but its methodology is based on its equity oil and gas output, rather than every drop of fuel it sells.

Eni, conversely, committed to cut its absolute emissions from all products it sells by 80% and said its oil output would shrink from 2025.

Graphic: Eni's greenhouse gas emissions target - https://fingfx.thomsonreuters.com/gfx/ce/7/8832/8813/Eni%20emissions%20target.jpg

Still, European oil and gas producers' climate ambitions are way ahead of their U.S. peers ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX) and ConocoPhillips (NYSE:COP).

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.