Oil and Gas

Enabling science-based emissions reductions for fossil fuel companies is complex and the SBTi is taking a cautious and deliberate approach. As always, our aim is to develop robust methodologies that will support decarbonization at the pace and scale required by science. To this end, the SBTi has engaged a consultant to facilitate a panel of independent external experts to complete an independent review of the draft oil and gas methods and guidance.

Due to the developing status of our method, in addition to the existing SBTi policy to pause the validation of fossil fuel sector targets, we are also pausing commitments from these companies. During this period, commitments will not be accepted from companies or subsidiaries in category 1 below. This policy is effective immediately and removal of previous commitments by oil and gas sector companies has been completed.

The SBTi reserves the right to remove other committed companies that, after careful evaluation, are considered to fall within category 1 below. Companies subject to this policy with targets that were approved prior to the policy's implementation will remain valid for five years from the approval date. The SBTi will share further updates on the development of this guidance and this policy over time.

1. Companies that cannot commit to the SBTi until the oil and gas method is finalized.

• 1.1 Companies with any level of direct involvement in exploration, extraction, mining and/or production of oil, natural gas, coal or other fossil fuels, irrespective of percentage revenue generated by these activities, i.e. including, but not limited to, integrated oil and gas companies, integrated gas companies, exploration and production pure players, refining and marketing pure players, oil products distributors, gas distributors and retailers and traditional oil and gas service companies (except as noted in category 2 below).

2. Companies that can join the SBTi

• 2.1 Companies that derive less than 50% of revenue from a) sale, transmission and distribution of fossil fuels, or b) providing equipment or services to fossil fuel companies (see 1.1).
• 2.2 Companies with less than 5% revenue from fossil fuel assets (e.g. coal mine, lignite mine, etc.) for extraction activities with commercial purposes.
• 2.3 Electric utilities that mine coal for their own power generation.
• 2.4 Subsidiaries of fossil fuel companies (see 1.1) may join the SBTi if the subsidiary itself is not considered a fossil fuel company.
  
  SBTi evaluates the eligibility of subsidiaries of fossil fuel companies on a case-by-case basis. The subsidiary’s operational model and relevance of its emissions to its parent company will be assessed. Subsidiaries that are established for the sole purpose of setting a science-based targets on a portion of a fossil fuel companies’ GHG inventory are not permitted to join SBTi.
  
  For transparency, subsidiaries who set targets but whose parent companies are ineligible will be identified via a footnote in their target wording.

In summary, the SBTi is continuing work on the oil and gas methodology. Until this method is final, the following will be put in place:

• Companies that fit category 1 with commitments will be removed from the SBTi target dashboard.
• The SBTi will no longer accept commitments and/or validate targets for companies that fit category 1.

This policy will be reviewed and updated regularly to ensure it is aligned with the latest SBTi position. Further updates will be sharedin due course. In the meantime, additional information is available in our FAQs. For any questions, contact the team at OGSector@sciencebasedtargets.org.

Policy change log

• 07/26/2022 - policy updated to clarify approach regarding subsidiaries of fossil fuel companies
• 04/19/2022 - policy updated to improve clarity
• 03/07/2022 - policy update published

The following companies have been removed from the SBTi website according to our updated policy. This list will be updated regularly and does not necessarily represent all companies affected by the policy.

• CGP PRIMAGAZ
• FLUXYS BELGIUM
• OKQ8 AB
• James Fisher and Sons plc
• PJSC Tatneft
• Nabors Industries Ltd.
• Enagás S.A.
• Halliburton Company
• Schlumberger Limited
• Cadent
• Grupo Energía Bogotá S.A. ESP
• Naturgy Energy Group SA.
• Snam S.p.A.
• Centrica
• Worley Ltd
• McDermott International
• Adani Green Energy Ltd.

• Agence de la transition écologique (ADEME)

• Aviva Investors

• bp

• California Resources Corporation (CRC)

• Carbon Tracker

• Climate Accountability Institute,

• Eni

• Galp

• HSBCAviva Investors

• I Care

• Imperial College London

• Repsol

• Shell

• Total

• North Sea Transition Authority

• UN Global Compact

• University of Queensland Business School

• World Benchmarking Alliance

• World Resource Institute (WRI)

• World Wildlife Fund (WWF)

• Ramiro Fernandez - Race to Zero
• Laetitia Pirson - Ceres
• Heidi Westlake - Origin Energy
• Bobbie Thoman - NOCO Energy Corporation
• Deborah Gordon and colleagues - RMI
• Mike Coffin - Carbon Tracker Initiative
• John Scott - Zurich Insurance Group
• Michelle Horsfield - Sumitomo Mitsui Banking Corporation
• Krista Halttunen -Imperial College London

Consultation feedback summary

Draft guidance

• Guidance on Setting Science-Based Targets for Oil, Gas and Integrated Energy Companies

• Annex A: Non-Energy uses of Petroleum and Gas Products

• Annex B: Rationale for the Approach in Dealing with Overlap Between Oil&Gas and Petrochemical Industry

• Annex D: Fuel Specific Calculations for the Well-to-Wheel Indicator

• Annex F: The Least-Cost Methodology, Carbon Tracker

• Annex H: CH4 Emissions Analysis and Scenarios

Consultation resources

• Key Questions & Logistics for consultation

Video explanations and guides to the public consultation

• Introduction to the project

• Overview of the methods: Well-to-Wheel Methodology

• Overview of the methods: Least-Cost Methodology

Overview of the methods: Sectoral Decarbonization Approach

• Key Consultation Q1: Scenarios

• Key Consultation Q2: Intensity vs. Absolute Targets

• Key Consultation Q3: Where in the value chain to set targets?

• Key Consultation Q4: Disaggregation of targets by scope

• Key Consultation Q5: Flexibility vs Comparability

• Key Consultation Q6: What counts for reaching a target and net-zero

Relevant papers – released as available

• Whitepaper: Analysis and Translation of Global Scenarios to Inform Paris-Aligned Pathways for the Energy System

• FAQ on Carbon Tracker’s Least-Cost Methodology

• Foundations for Science-Based Net-Zero Target Setting in the Corporate Sector

For enquiries about the oil and gas sector project, email the team at OGSector@sciencebasedtargets.org

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