The oil and gas industry has made almost no progress since 2021 to align itself with the Paris Agreement goals, according to new research by the World Benchmarking Alliance (WBA) and CDP.
No oil and gas firm in the world has plans to phase out fossil fuels, according to a statement by CDP, which has assessed the world’s largest oil and gas companies, including ExxonMobil, BP, and Saudi Aramco.
According to CDP, there has been little advance – and alarmingly even some decline – in oil and gas companies’ progress on limiting global warming to 1.5 degrees.
Even though the oil and gas sector has a wealth of resources and tools available to decarbonise, it is failing to use them, the statement said.
“This assessment of the oil and gas sector is critically timed before COP28, it must be used to re-enforce current cries that it is not possible for us to limit warming to 1.5 degrees and avert the worst impacts of climate change if we do not start to hold this vital sector to account,” said Amir Sokolowski, global director, climate change, CDP.
“We need to see the oil and gas sector gaze at its future through science-aligned lenses, confronting structural, not cosmetic changes. Commitments and actions are limited across the board.”
According to him, not enough companies have set targets, and of those that have, most do not have targets that include scope 3 emissions reductions.
Scope 3 covers indirect emissions from value chain activities beyond an organization’s control, including transportation, supply chain, and waste.
“Even the small number with targets that include scope 3 is not supporting them with a credible transition plan. The advice could not be clearer from the IEA, we need to have stopped exploration by 2021, yet it is currently not set to peak until 2028,” Sokolowski said.
“A few companies in the benchmark show that there is room to transition for those that act now, the rest of the sector must follow suit, and quickly.”
According to the statement, most companies fail to disclose their capital investment in low-carbon technologies. Among those who do, investment falls dangerously short; only one company – Neste – is investing enough to align with a 1.5 scenario.
“The seven major oil and gas companies made a record $380 billion profits last year but despite this, investment to reach a low-carbon economy has fallen dangerously short,” it said.
“To halve the sector’s Scope 1 and 2 emissions, companies need to invest $600 billion by 2030 into low-carbon solutions. This is not happening. Only 12 percent of companies assessed Scope 1 and 2 emissions have decreased on track to limiting global warming to 1.5 C.”
Scope 1 refers to direct emissions from sources under an organization’s control while Scope 2 encompasses indirect emissions from purchased energy.
According to CDP, Scope 1 and 2 methane emissions must be reduced by 60 percent by 2030, yet only 29 companies have even disclosed targets to reduce methane emissions by 2030.
“About 80 percent of the sector’s emissions come from the combustion of oil and gas products. The sector’s only route to transition is phasing out fossil fuels,” it said.
“While this cannot happen overnight, companies are not even putting plans in place, and there is no sign that companies are slowing down extraction.”
Vicky Sins, lead, WBA decarbonisation, and Enegry Transformation said that the oil and gas sector’s failure to address emissions from its products and operations hampers international efforts to limit global warming to 1.5C.
“In the run-up to COP28 in Dubai, all eyes are on the oil and gas industry. But these companies are not planning for a low-carbon future and are failing to take immediate and long-term responsibility,” she said.
It is deeply concerning that no companies have made a commitment to halt the expansion of fossil fuel activities before 2030.”
According to Sins, while there has been some progress in social aspects, the oil and gas sector is far behind where it needs to be.
“The oil and gas sector will not make the investment in rapid decarbonisation and just transition without external pressure from key stakeholders,” she said.
“Our findings are a warning for the need for all stakeholders — investors, policymakers and the public — to hold the oil and gas sector accountable.”