On Tuesday, January 18, 2022, Exxon Mobil, one of the largest publicly traded international oil and gas companies in the world, announced its goal to achieve net-zero greenhouse gas emissions from operations by 2050.
In its report, Exxon Mobil claimed that the company had identified more than 150 potential modifications that would help it reach its goal. It expects to finalize approximately 90 percent of the plan by the end of 2022 and complete the detailed roadmap in 2023. Meanwhile, initial actions like methane mitigation, equipment upgrades, and the elimination of venting are already underway.
“ExxonMobil is committed to playing a leading role in the energy transition, and Advancing Climate Solutions articulates our deliberate approach to helping society reach a lower-emissions future. We are developing comprehensive roadmaps to reduce greenhouse gas emissions from our operated assets around the world, and where we are not the operator, we are working with our partners to achieve similar emission-reduction results,” said Darren Woods, the chairman and chief executive officer of ExxonMobil.
In recent years, Exxon Mobil has been receiving pressure from investors to address its approach to climate change. The pressure was intensified last year when activist investors secured three of the twelve seats on the board of Exxon Mobil.
Exxon Mobil plans to invest more than $15 billion by 2027 on lower-emission initiatives and help customers reduce their greenhouse emissions by investing in carbon capture and storage, hydrogen, and biofuels. Woods explained that investing in these technologies will help the company deploy “market-based and cost-effective solutions.”
“We believe our strategy is unique among industry and enables us to succeed across multiple scenarios. We will create shareholder value by adjusting investments between our existing low-cost portfolio and new lower-emission business opportunities to match the pace of the energy transition,” said Woods.
However, while many climate experts regard the plan as a step in the right direction, the plan takes limited atual action towards addressing climate change. In its report, Exxon Mobil claimed that the aim for net-zero greenhouse gas emissions only applies to Scope 1 emissions, which are directly produced by the company, and Scope 2 emissions, which are from the utilities that Exxon Mobil buys. This means the company does not plan to address Scope 3 emissions, which are produced from the combustion of fuels by the customers and other companies along Exxon’s supply chain. Scope 3 emissions, however, contribute the most to the overall greenhouse gas emissions and are the hardest to control or compensate for. In 2020, Exxon Mobil reported that at least 650 million tonnes out of the 762 million tonnes of emissions came from petroleum sales, or Scope 3 emissions. Therefore, at this scale, about 85 percent of Exxon Mobil’s total emissions are not going to be part of the net zero plan.
“Fully addressing Scope 1 and Scope 2 emissions is necessary but not sufficient given that the major impact of oil and gas is in the sale and use of the product. To be an energy solutions provider means that you are addressing the carbon footprint as well as energy content of the products you are providing,” said Mark Brownstein, senior vice president for energy at the Environmental Defense Fund.
Many of Exxon Mobil’s competitors are addressing Scope 3 emissions. Shell, the largest European oil company, has aimed for net-zero emissions in 2050 including Scope 3 emissions, which accounts for over 90 percent of its emissions. Many other companies are selling off hydrocarbon businesses and redirecting resources to renewable energy sources like solar and wind power.
By: Jenny Jin