In a recent commentary, Sara Budinis, Energy Analyst with the International Energy Agency (IEA), defines “net zero” or “carbon neutrality” saying, “…that any CO2 released into the atmosphere from human activity is balanced by an equivalent amount being removed. Becoming carbon negative requires a company, sector or country to remove more CO2from the atmosphere than it emits.”
As we’ve previously seen in IEA analysis, oil and gas companies will need to play a driving role in achieving a successful energy transformation – and an important part of their participation will be to curtail greenhouse gas emissions.
This week, joining a growing list of industry giants, BP announced its intention to become a “net zero company by 2050 or sooner”.
BP’s CEO, Bernard Looney, said, “The world’s carbon budget is finite and running out fast; we need a rapid transition to net zero. We all want energy that is reliable and affordable, but that is no longer enough. It must also be cleaner. To deliver that, trillions of dollars will need to be invested in replumbing and rewiring the world’s energy system. It will require nothing short of reimagining energy as we know it.”
BP listed ten objectives to achieve its goal:
Five aims to get BP to net zero:
1. Net zero across BP’s operations on an absolute basis by 2050 or sooner.
2. Net zero on carbon in BP’s oil and gas production on an absolute basis by 2050 or sooner.
3. 50% cut in the carbon intensity of products BP sells by 2050 or sooner.
4. Install methane measurement at all BP’s major oil and gas processing sites by 2023 and reduce methane intensity of operations by 50%.
5. Increase the proportion of investment into non-oil and gas businesses over time.
Five aims to help the world get to net zero:
6. More active advocacy for policies that support net zero, including carbon pricing.
7. Further incentivise BP’s workforce to deliver aims and mobilise them to advocate for net zero.
8. Set new expectations for relationships with trade associations.
9. Aim to be recognised as a leader for transparency of reporting, including supporting the recommendations of the TCFD.
10. Launch a new team to help countries, cities and large companies decarbonise.
“This will certainly be a challenge, but also a tremendous opportunity. It is clear to me, and to our stakeholders, that for BP to play our part and serve our purpose, we have to change. And we want to change – this is the right thing for the world and for BP,” Looney continued.
Later in the week, Norway’s Minister of Petroleum and Energy Tina Bru spoke at Oslo Energy Forum, stating “It is the government’s policy and my duty to make sure we continue to produce profitable oil and gas. The world needs energy, and the world needs to cut emissions. How do we square this circle?”
In her address, Minister Bru pointed to what she referred to as the “Norwegian Way” – a commitment to international agreements, remembering, “that this is a global challenge that requires global solutions”.
The industry’s work on the Norwegian Continental Shelf (NCS) has already shown significant progress towards lowering emissions, Minister Bru explained:
“I am therefore very pleased with the ambitions presented last month by the Norwegian petroleum industry to reduce absolute emissions by 40% by 2030, and to near zero in 2050.
These new ambitions are coming on top of an already impressive standard set on the NCS.
An article in Science found that global emissions from production of oil gas may be reduced by as much 700 megatons annually if NCS emission levels were achieved internationally. That reduction is 13 times Norway’s total emissions.”
Positive goals from the oil and gas industry, yet, as IEA Energy Analyst Sara Budinis explains, even more will need to be done:
“Meeting ambitious international climate goals may require global CO2 emissions to fall below zero in the second half of this century, achieving what is known as net negative emissions. In the Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming of 1.5° C, published in late 2018, almost all the pathways analysed by the authors relied to some extent on carbon removal approaches in order to achieve net negative emissions after 2050.”
Here in Norway, Equinor has stated its intention to “Strengthen its industry leading position on carbon efficient production, aiming to reach carbon neutral global operations by 2030”. In addition to its stake in renewable energy endeavours, Equinor’s portfolio includes its decades-long experience in carbon capture and storage (CCS), which Minister Bru emphasised in her address.
As BP works towards “replumbing and rewiring the world’s energy system”, carbon removal will be a net positive investment to come in under zero.