50 oil companies, including Zhenhua Petroleum and Saudi Aramco, signed carbon reduction commitments

During the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28), oil and gas companies made their latest commitments.

On December 2, COP28 organizers announced that 50 oil and gas companies around the world signed the "Oil and Gas Carbon Reduction Charter" (hereinafter referred to as the "Charter"), committing to basically eliminate methane emissions and conventional flaring by 2030, and achieve their own net zero emissions by 2050.

After the announcement, the Environmental Defense Fund, a non-profit organization in the United States, praised it as "a milestone in the global methane reduction process".

But there is also a lot of criticism. The United Nations issued a response saying that "the fossil fuel industry, the 'giants of the climate crisis', is finally starting to wake up, but the promises made are clearly not up to the mark." ”

The environmental agency Petroleum Change International issued an open letter denouncing the charter as a "smoke bomb". More than 320 non-profit organizations involved in the collaboration, the organization said, the World Wide Fund for Nature (WWF), Green and Equality.

The UAE and Saudi Arabia presidency of COP28 jointly announced progress in the signing of the Charter. According to the announcement, a total of 30 state-owned oil companies and 20 private companies have made commitments, including Saudi Aramco, Petrobras, China Zhenhua Petroleum, ExxonMobil, Total, BP, Shell and others.

According to COP28 organizers, companies that sign the charter account for more than 40% of the world's oil production.

According to public information, among the world's top 10 oil companies in terms of oil production, PetroChina, Sinopec, Petroleos Mexicanos, ConocoPhillips and Chevron have not signed the charter. In addition, state-owned enterprises of oil-producing countries such as QatarEnergy, Iraqi National Oil Marketing Company, and Iranian National Oil Company are not on the list.

Zhenhua Petroleum is the only Chinese company on the list. The company is an international oil company supported by the state, mainly engaged in oil and gas industry investment, oil and gas exploration and development, international oil and gas trade, oil storage and transportation, petroleum refining and other businesses, and belongs to China North Industries Group.

In a response statement, the director of the Global Climate Program at the World Resources Institute (WRI), a think tank, said that "it is encouraging that some national oil companies have set methane reduction targets for the first time", although most international oil and gas companies have previously put forward strict requirements to reduce methane emissions.

Methane is the second largest greenhouse gas in the world and has the power to cause global temperature increases 84-86 times more than carbon dioxide. Methane emission reduction has become one of the main measures in international climate negotiations in recent years due to its "quick effect" on mitigating climate change. The energy sector is the second largest source of methane emissions.

Reducing methane emissions may not be difficult for oil and gas companies. A report released by the International Energy Agency (IEA), an intergovernmental energy agency, estimates that 40% of the methane emitted by the global oil and gas industry's own operations can be eliminated at almost zero cost, and the remaining methane can be captured and sold. Even if it can't be sold, it costs less than $20 per tonne to abate.

Together with the United Nations Environment Programme's International Methane Observatory (IMEO) and the IEA, the organization will use satellite data and other analytical tools to monitor and hold the 50 companies accountable for their methane emissions, the agency said.

Criticism from the United Nations and environmental agencies has focused on the fact that 50 companies have only proposed carbon reduction measures for the greenhouse gases produced within their own operations, while not committing to carbon emissions in their value chains, i.e. greenhouse gases from oil and gas consumption.

UN Secretary-General António Guterres responded: "The science is clear: fossil fuels need to be phased out and a clear timeframe is set based on the 1.5°C warming limit. More than 320 NGOs also said in the open letter that "the charter obscures the reality of the need to phase out oil, gas and coal".

In 2022, global oil and gas production, transport and processing activities (within their own operations) generated 5.1 billion tonnes of carbon dioxide equivalent, accounting for about 15% of total global energy-related emissions, while oil and gas consumption value chains accounted for 40% of emissions, according to IEA.

According to the latest Emissions Gap Report from the United Nations Environment Programme, global greenhouse gas emissions amounted to 57.4 billion tonnes of carbon dioxide equivalent in 2022. According to this calculation, the carbon emissions of the entire industrial chain of the global oil and gas industry accounted for 32.6% of the global total last year, of which the carbon emissions of oil and gas consumption accounted for 23.7%, and the carbon emissions of oil and gas enterprises' own operations accounted for only 8.9%.

In addition, UN Secretary-General António Guterres noted that the Charter does not specify a pathway for these companies to achieve their 2050 net-zero emissions targets. Previously, it was reported in the media that large oil and gas companies and producers are more inclined to call for carbon capture and storage (CCS) technology to decarbonize rather than energy transition.

A few days ago, the IEA called on oil and gas companies to increase their investment in clean energy, saying that "global oil and gas companies must choose between exacerbating the climate crisis or shifting to become part of the clean energy solution".

Advocating or opposing the withdrawal from fossil fuels is one of the focal points of the negotiation game at this climate conference. In this context, the controversy over the Bylaws is a microcosm of the tug-of-war between different groups.

For the first time, delegates took stock of the progress made in global climate action, including what they should step up to reduce emissions in order to reverse the reality gap. After negotiations, each country is required to issue a final resolution, which is binding on international law and has the force of law.

One of the main differences in the current negotiations is how countries around the world will treat the use of fossil fuels over the next decade.

Delegates will engage in back-and-forth negotiations on how to describe the exit of fossil fuels in the text of the final resolution – "phase-out" fossil fuels, "phase-down" fossil fuels, or "phase-out" fossil fuels that have not been retrofitted with emission reduction facilities.