Fossil Fuel Companies' Emissions Reduction Targets Are 'Not Ambitious Enough'

Fossil fuel companies are disproportionately responsible for the climate crisis, and a new study reveals they are not doing much to change their ways. 

The analysis, published in Science last month, found that only two of 52 major oil and gas companies had set emissions reductions goals consistent with the Paris agreement. 

“We find that most emissions reduction targets set by oil and gas companies are not ambitious enough to be compatible with the UN climate goals of limiting temperature increases to 2C or below,” study co-author Professor Simon Dietz of the London School of Economics’s Grantham Research Institute and Dept of Geography and Environment tells Treehugger in an email. 

Science-Based Targets?

The Paris climate agreement set a goal of limiting global warming to “well below” two degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels, and, ideally, to 1.5 degrees C (2.7 degrees F). This 1.5-degree goal was reaffirmed by the Glasgow Climate Pact following the 2021 United Nations Climate Change Conference (COP26) in November. The UN’s Intergovernmental Panel on Climate Change (IPCC) says reaching this goal means reducing greenhouse gas emissions by 45% of 2010 levels by 2030 and reaching net-zero emissions by 2050. 

This, of course, means transitioning the world’s energy supply away from fossil fuels, including oil and gas. After all, in 2019, oil and gas (O&G) companies were responsible for 56% of energy-related carbon-dioxide emissions and 40% of total emissions.

"To meet international climate goals, the world will need to transition away from burning O&G, and the O&G sector itself will need to curb its operational emissions,” the study authors wrote. 

But is the sector on the path towards doing so? 

To find out, Dietz and his team from the London School of Economics and the Political Science Organization for Economic Co-operation and Development looked at a total of 52 oil and gas companies that had a spot on the list of the world’s top 50 public oil and gas producers at one point since 2017.  These include major players like ExxonMobil, BP, Chevron, and ConocoPhillips. 

To see if these companies were moving forward in line with the goals of the Paris agreement, the researchers took a three-pronged approach: 

1. They estimated the “energy intensity” of the companies, that is, “their emissions per unit of energy sales,” as Dietz puts it.
2. They then looked at the companies’ stated emissions-reductions targets and estimated their energy intensities if they met them.
3. Finally, they considered each company’s “pathway” compared with the energy intensity of a company that is on track to meet the goals of the Paris agreement. 

What they found was that only two of the 52 companies they considered had set targets that would reduce their emissions intensity in line with limiting global warming to 1.5 degrees or two degrees C: Occidental Petroleum and Royal Dutch Shell.

What Is Being Promised? 

The study authors found that, as of January 2021, 28 of the 52 companies they looked at had published both quantitative emissions-reduction targets and sufficient data that the researchers could predict their future “pathways.” 

According to the researchers’ calculations, Occidental Petroleum’s pledge would enable it to reach net-zero by 2050, which would bring it in line with reducing global warming to 1.5 degrees C. Royal Dutch Shell’s promise would reduce its energy intensity 65% by 2050, which would put it in line with two degrees of warming. Other companies whose pledges brought them close to the two-degree limit were Eni, Repsol, and Total. 

There is of course still an important distinction between 1.5 and two degrees C of warming. That extra 0.5 degrees C could expose hundreds of millions more people to climate risk and poverty and nearly eradicate coral reefs. So while Shell’s pledge puts it ahead of most oil and gas companies, many would still say it does not go far enough. In fact, activists have successfully sued the company in a Dutch court to reduce emissions 40% by 2030—a more ambitious timeline than the company’s self-set goals.

No Real Surprise 

On one hand, the fact that oil and gas companies are still dragging their heels on climate action is to be expected.

“It is obvious that these companies’ business models are fundamentally challenged by the transition to a low-carbon economy and therefore no real surprise that they have been slow to act,” Dietz says.

It is well documented that fossil fuel companies have known about the risks posed by their activities for decades, yet chose to fund misinformation about climate change rather than transform their energy portfolios. In fact, one study found that ExxonMobil, Shell, and BP were among 100 fossil fuel producers that were responsible for 71% of industrial greenhouse gas emissions since 1988, the year that anthropogenic climate change was officially recognized through the formation of the IPCC.

However, Dietz and his colleagues still hope oil and gas companies may finally forge a new pathway by either moving towards renewable energy, developing carbon capture technology, or liquidating their fossil fuel assets and returning the cash to investors. Further, if world leaders move to pursue climate-friendly energy policies, this will also be in the companies’ best interests. 

“Their lack of action is clearly harming the climate as it is resulting in more emissions of greenhouse gases,” Dietz says. “Whether it will end up harming them depends on political action as much as anything else, but surely from the point of view of an oil and gas company there is a greater risk of governments enacting stronger climate policies than weaker ones.”