Wednesday, February 28, 2024

ExxonMobil promises emissions cuts after pressure from investors

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ExxonMobil has pledged to cut emissions for every barrel of oil it produces by up to one-fifth over the next five years, in response to pressure from investors to act on climate change.

The company said on Monday it would aim for a 15-20% reduction per barrel by 2025, from 2016 levels.

The announcement comes as Exxon faces a voice shareholder campaign do more to reduce its environmental impact.

A number of American oil producers pledged to cut emissions in the face of investor concerns over climate change, and ahead of the inauguration of new US President Joe Biden, who has said he will “move away from the oil industry.”

Exxon, which was once the world’s largest company by market cap, is a symbol of great oil in the United States. He stuck to a strategy of expansion of crude oil production despite a move by competitors to greener forms of power generation and some forecasts indicating a peak in global crude consumption this decade.

Unlike many European producers, Exxon’s new targets apply only to its Scope 1 and 2 emissions – those produced by its own operations and electricity suppliers. They do not apply to its Scope 3 emissions – those produced by the combustion of its oil.

However, Exxon said it will start releasing Scope 3 emissions figures every year. “This has been of great interest to the stakeholders we meet,” said Pete Trelenberg, ExxonMobil’s director of greenhouse gases and climate change.

The new targets would focus on reducing emissions from Exxon’s oil and gas operations, the company said, and did not indicate a transition to more investment in low-carbon energy such as power. wind and solar.

Exxon’s goals include a 40-50% reduction in methane emissions per barrel produced and a 35-45% reduction in flaring per barrel – burning less valuable gas found alongside oil – by 2025. The company said it will phase out routine flaring by 2025. 2030.

Biden’s incoming administration has pledged to crack down on methane emissions and gas flaring in the oil and gas industry and put the United States on a net zero emission path by 2050.

Like much of the global oil industry, Exxon has been hit hard by falling prices this year, recording three straight quarters of losses, fueling fears of being forced to cut its dividend.

Last week the Church of England joined a growing investor campaign demanding sweeping changes at Exxon, backing calls for the appointment of new directors and for the oil supermajor to develop a strategy to transition to cleaner fuels.

Exxon’s new targets are a result of “our ongoing business planning process as we work towards leading greenhouse gas performance across all of our lines of business,” said Darren Woods, Managing Director of ‘Exxon.

But environmentalists said the targets did not go far enough. Ben Ratner, senior director of the Environmental Defense Fund, described them as “unsuitable for the challenges and opportunities facing the energy industry”.

“Achieving the goals of the Paris Agreement requires an energy transformation that reduces absolute emissions, not piecemeal intensity goals backed by erratic methane data and reporting,” he said.


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