Fossil fuel production is not slowing down despite the world’s efforts on moving towards a greener economy, as stated by research in Nature. The study named Evaluating fossil fuel companies’ alignment with 1.5 °C climate pathways tracked and showed the consistency of the top 142 fossil fuel companies against four scenarios towards achieving the 1.5 °C Paris Agreement target. It was fist published in the Conversation.
Three of the scenarios are IPCC shared socio-economic pathways (SSP1-1.9, SSP2-1.9 and SSP5-1.9) from 2014 and one is the International Energy Agency’s Net Zero Emissions pathway from 2020.
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The result state that more than 60% of the examined 142 oil, gas and coal companies, including three of the five Australian companies assessed were not on track to meet the climate target despite their announcements on net zero claims.
Between 2014 and 2020, 64%, 63% and 70% of coal, oil and gas companies, respectively, produced more than their production budgets under the IPCC’s middle-of-the-road (SSP2-1.9) Paris Agreement-compliant scenario. The research also points out the troubling finding that if the 142 companies continue their average growth rate trends from 2010 to 2018, they would produce up to 68%, 42% and 53% more than their cumulative production budgets for coal, oil and gas, respectively, by 2050.
That means the companies are exacting and producing more fossil fuel products than what is consistent with meeting our climate goals and limiting global warming up to 1.5 °C.
The research is based on the absolute fossil fuel production (as a proxy for embedded emissions) rather than carbon intensities associated with their use and includes coal which is commonly excluded in other papers.
Rio Tinto and BHP are outlined as the two Australian companies to be on track. Some of the Australian companies that are not on track are Whitehaven Coal, Santos and Woodside as they exceeded their production budgets by 232% (Woodside coal), 28% (Santos oil) and 33% (Santos gas), and 39% (Woodside gas) since 2014.
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BHP is on track as it slowed down coal, oil and gas generation more than required between 2014 and 2020 under the middle-of-the-road 1.5°C scenario – it used 87% (coal), 85% (oil) and 92% (gas) of its production budgets. Rio Tinto is also reported to have entirely stopped its production of coal back in 2018.
Tracking fossil fuel production of companies is a good indicator measuring the actual validity of their net zero commitments and readiness to take responsibility for their contribution to climate change. The information can help investors make respective decisions and estimate future environmental risks regarding those companies. Governments can also integrate such information into corporate guidelines for climate action.
