Norwegian energy company Equinor announced on Monday that it has set a target of becoming a net-zero energy company by 2050, a target specifically directed to demonstrate the company’s commitment to the Paris Climate Agreement.
The front page of Equinor’s website now highlights the fact that over 85% of total fossil fuel greenhouse gas emissions come from consumption. In response, Equinor is promising to address emissions “every step of the way”, and it’s new net-zero ambition includes Scope 1 and 2 GHG emissions (operated basis 100%) and scope 3 GHG emissions (use of products, equity share).
“Equinor is committed to being a leader in the energy transition,” said Anders Opedal, who on Monday took over the position as Chief Executive Officer (CEO) and President of Equinor.
“It is a sound business strategy to ensure long-term competitiveness during a period of profound changes in the energy systems as society moves towards net zero. Over the coming months, we will update our strategy to continue to create value for our shareholders and to realise this ambition.”
The announcement follows the company’s February ambition to reduce net carbon intensity by at least 50% by 2050, to reach carbon neutral global operations by 2030, and to reduce absolute greenhouse gas emissions in its home country of Norway to near zero by 2050.
The February announcement also included an ambitious target of growing its renewable energy capacity tenfold by 2026, a value-driven strategy for growth which nevertheless continued to include oil and gas production.
“We are now looking 30 years into the future, and it is not possible to predict an exact shape and pace of the transition,” said then-President and CEO of Equinor, Eldar Sætre.“Not for society and not for us.
“But we know there will have to be significant changes in the energy markets, and our portfolio will change accordingly to remain competitive. We will produce less oil in a low carbon future, but value creation from oil and gas will still be high, and renewables give significant new opportunities to create attractive returns and growth.”
While Equinor’s new goals do not completely remove the role of oil and gas in the company’s future, they do seem to have taken on a decidedly morbid tone regarding their future value to the company.
Equinor now expects to deliver an average annual oil and gas production growth of around 3% between 2019 and 2026. However, the company’s announcement explained that “Equinor is preparing for an expected gradual decline in global demand for oil and gas from around 2030 onwards” and that “Equinor is preparing for an expected gradual decline in global demand for oil and gas from around 2030 onwards.” Further, over the longer term, “Equinor expects to produce less oil and gas than today.”
“Equinor has for years demonstrated an ability to deliver on climate ambitions and has a strong track record on lowering emissions from oil and gas,” said Opedal. “Now, we are ready to further strengthen our climate ambitions, aiming to reach net zero by 2050.”
Part of Equinor’s efforts to strengthen its climate ambitions will be a focus on the growth of renewables. Existing renewable goals for the company include a production capacity of between 4 and 6GW by 2026 and between 12 to 16GW by 2035. The company is further aiming to expand its acquisition of wind acreage and will look to leverage its position in offshore wind to become a world leader in the sector.
Equinor also believes that in order to achieve net-zero emissions, it is necessary to have a well-functioning market for carbon capture and storage (CCS) and natural sinks, as well as the development of competitive technologies for hydrogen.”
With traditional experience in oil and gas, Equinor believes it is well positioned to provide low-carbon technologies and establish zero-emission value chains, and is already making strides to push these technologies through projects such as Northern Lights, which aims to store CO2 from industrial sites across Europe.
“Climate change is a shared challenge,” said Opedal. “The combined efforts of governments, industries, investors and consumers are crucial to reaching net-zero emissions, for Equinor and for society. Together, we can overcome technological and commercial challenges, cut emissions, and develop CCS and zero-emission value chains for a net-zero future.”
More specifics about Equinor’s updated net-zero strategy are expected to be revealed at the company’s Capital Markets Day in June of 2021.