Aviation, shipping, and vehicle have a vital role in the world economy. These are powered by petroleum and are challenging to decarbonize because of weak government policies to reduce emissions and promote alternative energy.
Additionally, the International Energy Agency (IEA) predicts increases in fossil fuel consumption this year similar to pre-pandemic times, as the economy recovers, and even before the complete revival of the aviation industry.
Although some big oil companies have sold some of their assets or oil reserves to make them look greener, other national companies or private investors who bought them will continue to pump these oils and spew carbon dioxide behind public scrutiny.
Pressures from environmental activists to make big oil company’s accountable for their emissions have achieved some success.
In May 2021, a small hedge fund, Engine No1, placed three ‘green’ directors on Exxon’s board who vowed to improve its climate policies while maintaining its profitability.
On January 18, ExxonMobil revealed its plans to slash its carbon emissions and become net-zero by 2050, another win for the climate.
This move by the Texas oil giant is significant, as it will set the tone for other 9,000 or so US oil and gas companies to accept the need to take action for the climate.
So how does ExxonMobil plans to slash its emissions and achieve its climate targets?
It will start from the bottom-up by holding all its thirty-plus operational divisions worldwide accountable for its absolute GHG emissions reductions target.
By 2030, the firm says it will cut its GHG by 20% from its 2016 levels.
It will also improve its operational efficiency by replacing its old field equipment with new and more efficient ones, phasing out methane flaring, using clean energy to power its field operations, investing US$15 billion in low-carbon technologies such as hydrogen, carbon capture, and sequestration, and advanced biofuels to achieve net-zero.
Its European counterparts – BP has invested $500 million in renewables in 2019 and will increase it to $5 billion in 2030.
While Exxon Mobile’s plan looks good, these GHG emissions reduction plans only cover its own operational and energy use emissions or its scope 1 and scope 2 emissions, which account for just 20% of its total emissions.
The largest emissions – 80% come from its end users. Hence, oil companies argue that makers of petrol-fuelled cars should also share more responsibility to limit the scope 3 emissions.
ExxonMobil US$15 billion investments in novel technologies – carbon capture and sequestration, hydrogen, and biofuels to achieve net-zero poses a huge financial risk that can only work with significant support from the government through tax credits, subsidies, and low-carbon fuel standards, for them to continue to generate good profits.
To know more about big oil’s move to decarbonize and slash emissions, read the full article by clicking on the link provided at bottom of this article.
What is net-zero, and is it possible to achieve it before it’s too late? Watch the video below:
What is ExxonMobil’s new climate strategy worth? (2022 January 22). The Economist. Retrieved from https://www.economist.com/business/what-is-exxonmobils-new-climate-strategy-worth/21807259?