Although many oil majors have made climate pledges, those promises invariably remain unfulfilled. — Bloomberg
New York: The prime beneficiaries of plans to allow corporations more licence to use carbon credits to cut total emissions may end up being the main perpetrators of the global climate disaster: oil and gas companies.
The fossil-fuel industry is “the elephant in the room when we talk about Scope 3 emissions”, according to Catherine McKenna, Canada’s former minister of environment and climate change.
There is plenty of talk in the climate community right now about Scope 3 emissions – the greenhouse gases produced by customers and supply chains.
The trigger for all this chatter was a controversial statement in April by the board of the Science Based Targets initiative (SBTi), the world’s largest verifier of corporate climate goals.
SBTi surprisingly changed its tune on carbon credits – increasingly seen by experts as a greenwashing tool – saying they should be used to abate these value-chain emissions.
While SBTi’s board didn’t reference specific companies or industries, oil and gas firms have the greatest Scope 3 emissions of all. As such, they have the most to gain from a climate standard that puts more weight on carbon credits.
Other sectors with large Scope 3 profiles include agriculture, financial services and automakers.
Big Oil spent decades dismissing climate science and obstructing sustainability efforts as the world warmed.
Giving it an easier route to hit climate targets poses significant danger, McKenna warned in an interview.
Although many oil majors have made climate pledges, those promises invariably remain unfulfilled.
Their emissions continue to rise along with profits, which aren’t being used to build up clean energy, said McKenna, who is also chair of the UN Secretary General’s expert group on net-zero emissions and runs her own climate advisory firm.
All the while, Wall Street keeps pouring money into the fossil fuel infrastructure and oil executives demand more subsidies from taxpayers, she said.
Fossil-fuel combustion represents the largest source of carbon dioxide emissions, yet the industry has long been accused of greenwashing when it comes to promises of sustainability.
Many of the largest companies that extract, refine and transport those fuels are “chronically underreporting” their carbon footprints, haven’t articulated how they will meet their climate goals and don’t include all Scope 3 emissions in their targets – and said that doing so would be “deeply flawed”.
“Oil and gas have proved to be the least interested in actually reducing their huge Scope 3 emissions and have the most to gain by simply offsetting them,” said McKenna. “As I saw during my four years as environment minister in Canada, oil and gas was not only unwilling to be part of the solution, they worked at every opportunity to thwart progress on climate.”
McKenna made a similar point to Francesco Starace, chair of the SBTi board, during a video conference late last year, according to a person familiar with the matter. Starace is the former chief executive of one of Europe’s largest energy producers and utilities, Enel SpA.
During the call – held months before SBTi changed its stance on carbon credits – Starace said oil and gas companies shouldn’t be ostracised but instead considered “part of the solution” to the climate problem, said the person, who asked not to be identified because the call was confidential.
McKenna warned Starace against carbon offsets and to guard against external pressure when developing standards for the industry, the person said.
Starace, McKenna and SBTi declined to comment on the conversation.
“It’s bonkers to allow oil and gas to claim that they are climate leaders when they fuel the climate crisis and offset their emissions by buying cheap credits rather than transforming their industries,” McKenna said.
A spokesperson for SBTi did point to the group’s recently published discussion paper on Scope 3, which outlines three scenarios where carbon credits may be used when setting a science-based target. None of them include offsetting emissions, they said.
The SBTi board’s fateful April call on carbon credits set off a firestorm at an institution that had long been seen as the gold standard in emissions accountability.
The about-face appeared to contradict it’s long held position that companies should prioritise reducing emissions, while reserving the use of credits for residual emissions.
McKenna however said it’s essential the controversy not be allowed to permanently taint SBTi.
“SBTi may not be perfect, but it is important to integrity around net zero,” she said. “I worry about the drama around SBTi and how it may impact its effectiveness.” — Bloomberg
