The climate ambitions of European integrated oil and gas majors have strengthened markedly in the last six months, with Total, Shell, BP, Repsol and Eni all having made commitments to significantly reduce the carbon intensity of the energy they supply.
A new analysis from the Transition Pathway Initiative (TPI), the investor initiative backed by over 19 trillion US dollars of global capital, shows that four oil and gas majors – Shell, Eni, Total, Repsol – are now aligned with the emissions reductions pledged by the signatories to the Paris Agreement. BP and OMV are now the only European companies who fail to align with the Paris pledges.
In particular, Shell and Eni are leading the way with Shell having introduced a new concept of not selling energy to customers that are not also aligned to net zero pathways in key sectors such as aviation, shipping and freight.
“The European integrated oil and gas sector is changing rapidly,” said Adam Matthews, Co-Chair of TPI. “Three years ago, no company had set targets to reduce the carbon intensity of the energy they supply. Today all six oil and gas majors assessed by TPI have set such targets and we have seen significant progress in the past months, with companies engaging with the concept of net-zero, adopting longer-term perspectives and setting more ambitious goals to accelerate the low carbon transition.”
However, despite these commitments, none of the companies is aligned yet with net-zero or 1.5° C pathways.
Shell’s goal to cut its emissions intensity by 65 per cent by 2050 is the most ambitious in the sector and the closest to alignment with a 2°C scenario. But according to TPI, even Shell’s claim that it will be aligned with a 1.5°C climate scenario is not consistent. Shell’s announcement that it will work with the supply chain in hard-to-decarbonise sectors such as aviation and heavy-duty freight transport is innovative, but further details will be needed to understand how the benefits of this approach can be quantified.
Overall, TPI calculated that the average European oil and gas company would need to cut its emissions intensity by over 70 per cent between 2018 and 2050 to align with a 2°C climate scenario by 2050, while a genuine net-zero strategy would require a 100 per cent cut in absolute emissions. Even the most ambitious new targets fall far short of this.