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Shell, Eni lead oil majors climate ambitions but still fall short

May 19/2020

MOSCOW (MRC) -- None of the big oil companies currently meet U.N. targets to limit global warming despite the most ambitious targets set by Royal Dutch Shell and Eni , reported Reuters with reference to the statement of investors managing USD19 trillion.

The Transition Pathway Initiative (TPI), which represents the investors and is co-chaired by the Church of England Pensions Board, called on all oil and gas producers to set both intensity-based and absolute emissions reductions targets so that the industry adheres to a common standard on net zero emissions.

Burning of oil and gas accounts for the vast majority of the worlds carbon emissions. TPI, in a study of Europes biggest oil producers, singled out Shell and Italys Eni for making the broadest commitments to reduce greenhouse gases from all fuel products they sell, also known as Scope 3 emissions.

All European majors have committed to varying degrees of carbon reductions by 2050 to make their companies fit for a transition to a lower carbon economy. In marked contrast, U.S. oil giants lag far behind in terms of climate aims.

Shell has pledged to bring down its overall carbon intensity by 65%, Eni by 55% and BP by 50% by 2050. Intensity targets mean that absolute emissions can rise with increasing production.

Eni has also set itself a target to bring down its absolute emissions by 2050 by 80%.

Scope 3 emissions dwarf, typically by a factor of about six, direct emissions from operations and from the electricity a company uses, known as Scope 1 and 2 emissions.

BP and Spains Repsol have pledged to bring down their overall emissions to net zero by 2050, but this target does not cover fuel initially acquired from other producers and sold through their marketing businesses.

Most companies use the phrase net zero carbon in some way to describe their ambitions, despite the varying pathways.

"We now need a net zero standard for the oil and gas sector," said Adam Matthews of the Church of England Pensions Board.

None of the companies had done enough to align with plans to keep global warming to below 2 degrees Celsius.

"Claims of net zero or 1.5 C alignment are not substantiated by TPIs analysis. Even the most ambitious new goals (Shell and Eni) are not aligned with a 2 C scenario using TPIs intensity metric," TPI said in a report.

"Alignment with a Below 2 C scenario requires a 90% cut in emissions intensity (by 2050) while alignment with 1.5 C scenario requires a 100% reduction in net emissions (a genuine net zero strategy)."

It added that only Eni had provided substantial detail on its use of nature-based offsets - an integral part of every groups climate targets - to balance out emissions it cannot eliminate.

Austrias OMV is the laggard with the least ambitious climate targets among big integrated European oil companies, TPI said, adding that it expected OMV to issue an update on its transition plans this year.

TPI also urged all groups to provide more detail on their carbon capture and storage renewables investment plans.

A spokesman for BP said: "What the world needs to meet the Paris goals are absolute reductions in emissions to net zero... We do not believe that carbon intensity alone is a reliable single measure of progress towards the Paris goals."

A Shell spokeswoman said "we need to look at the detail of this report, but we are pleased our ambition is recognised and we are confident our approach is aligned with the 1.5 degrees Celsius goal of the Paris Agreement."

An OMV spokesman said OMV had already achieved its 2025 targets and that it would set itself more ambitious climate protection goals.

Eni and Repsol did not immediately respond to requests for comment.

As MRC reported before, the ongoing transition to low-carbon energy sources may accelerate as economies recover from the impact of the coronavirus crisis, said the head of oil and gas company Royal Dutch Shell in its last week's statement.

We remind that Pilipinas Shell Petroleum Corp said it will shut down its 110,000-barrel-per-day Tabangao refinery in the Philippines for one month from mid-May as the coronavirus pandemic has hammered oil demand.

We also remind that Shell Singapore restarted its naphtha cracker in Bukom Island this week following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.
Author:Margaret Volkova
Tags:Europe, PP, PE, LLDPE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, LDPE, HDPE, ethylene, petrochemistry, BP Plc, Eni, Repsol, Shell, Rossiya, Singapore, USA, Philippine.
Category:General News
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