OGDC Says Alliance Effective in Getting Firms Onboard Net-Zero Cause

A decarbonization alliance of oil and gas companies including the world’s top producers has said in its inaugural report that about a fourth of members only came up with emission reduction goals after joining the support coalition.

The alliance, called the Oil & Gas Decarbonization Charter, was launched last year at COP28 to encourage firms to set a goal of achieving net-zero operations by 2050 and promote transparency along the process. Its members include heavyweights Exxon Mobil Corp., Shell PLC and TotalEnergies SE, as well as major national oil and gas companies including Abu Dhabi National Oil Co. (ADNOC), Petróleo Brasileiro SA and Saudi Arabian Oil Co (Aramco).  

At the ongoing COP29 in Baku, the alliance released the results of its first “Charter Baselining Survey” to guide the way going forward.

“The Charter Baselining Survey aimed to map the climate ambitions of signatories at the point they joined the Charter”, the results report explained. “The results will be crucial to helping the OGDC understand gaps and identify priorities, as well as to track future progress”.

Sixty-nine percent of the 54 signatories said they had set net-zero operational emissions by 2050 before joining the charter, according to the report on the OGDC website.

“89 percent of signatories (48 out of 54) were able to provide all or some of the information requested”, the OGDC said. “For many, this was a first”.

Only 30 percent were fully consistent with the charter, while 11 percent did not report greenhouse gas emissions as of 2023 or failed to provide enough data for third-party verification, the report said.

“Overall, the results showed that, before signing up to the Charter and depending on the topic, between 20 percent and 37 percent of signatories did not have company-specific emissions reduction ambitions for their operations consistent with the OGDC goals”, it said.

“This confirms that the OGDC marks an important milestone for a significant number of companies.

“Among respondents that had ambitions in place, a majority reported they have detailed implementation plans that include such measures as the deployment of low-carbon technology, energy efficiency, changes to operational procedures and specific improvement projects”.

Still, “many companies” failed to adequately disclose Scope 1 and 2 goals and their climate performance publicly, the OGDC said.

However, it said that “signatories face different operating realities, with listed and national companies subject to different disclosure requirements and / or country-specific regulations and expectations”.

“The OGDC is actively working with the six signatories that could not participate – as well as with those that were able to provide only limited information – to help them overcome such challenges as data insufficiency, regulatory restrictions and limitations related to internal processes”, the report stated.

In investments, 85 percent of OGDC members are involved in energy systems other than oil and gas, according to the poll. These non-oil and gas areas included renewable energy, energy storage, low-carbon fuels, hydrogen and carbon capture.

“Additionally, at least 63 percent of companies plan to increase such investments in the future”, the OGDC said. “Information on past investments and plans for the future is limited due to it being competitively sensitive for many signatories”.

The poll did not have sufficiently uniform data for an aggregation of Earth-warming emissions among OGDC members, the report acknowledged.

“However, the results of this first exercise will be invaluable for establishing the foundations that will allow the OGDC to work toward anonymization and aggregation of numbers in the coming years”, it said.

“In addition to setting up a governance framework and establishing a central repository of emissions reduction resources, the Charter has taken important first steps to encourage companies to share more data on climate ambitions and performance”, the OGDC added.

“In the year to come, the OGDC will focus on providing the resources and guidance signatories needed to make concrete progress toward reducing methane, flaring and carbon dioxide emissions – all of which have the potential to cut global greenhouse gas significantly”, it said.

A joint statement from the chief executives of ADNOC, Aramco and TotalEnergies said, “The diverse nature of our signatories is an opportunity as well as a challenge”.

“Each company brings different experiences, capabilities, stakeholders and national circumstances. Signatories will have the opportunity to learn from the best practices and insights of peers from a wide range of backgrounds and from across the globe”.

The OGDC consists of 32 national companies and 22 independents. These companies are present in 104 countries, according to the alliance.

The OGDC represents 35 percent of global upstream oil and gas production and 43 percent of global oil volumes, the report said.

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