January 27, 2020
The bosses of some of the world’s biggest oil companies discussed adopting much more ambitious standards for carbon emission targets at a closed-door meeting in Davos on January 22, 2020, a sign of how much pressure they’re under from activists and investors to address climate change according to a Bloomberg report on WorldOil.com.
The meeting, part of the World Economic Forum program, included a debate on widening the industry’s target to include Scope 2 and Scope 3 reductions in emissions from the fuels they sell, not just the Scope 1 greenhouse gases produced by their own operations, said people familiar with the matter.
The GHG Protocol Corporate Standard classifies a company’s GHG emissions into three ‘scopes’. Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.
The talks between the chief executive officers of companies including Royal Dutch Shell Plc, Chevron Corp., Total SA, Saudi Aramco and BP Plc showed broad agreement on the need to move toward this broader definition – Scope 3 of the Greenhouse Gas Protocol – the people said, asking not to be named because the session was closed to the press. The executives didn’t take any final decisions.
Targeting Scope 3 emissions would be a big shift for an industry that accounts for the bulk of greenhouse gases. Several companies have already pledged reductions in Scope 1 and 2 greenhouse gases. Yet these account for less than 10% of total emissions from the life cycle of oil and gas. Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.
Among major energy groups, only Shell, Total and Repsol SA have publicly announced that they are either targeting or monitoring Scope 3 emissions.
The executives debated a document produced by the World Economic Forum on “neutralizing emissions at the pump,” a reference to the gasoline and diesel sold to customers. There’s an urgent need to shift the industry’s target from oil production to emissions from end users, said one person.
What this means to you
At their January 2020 Davos meeting oil leaders discussed widening the industry’s emissions targets to include Scope 2 and Scope 3 of the Greenhouse Gas Protocol. Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.
MIRATECH can help
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