Oil and Gas: Next Steps for the SBTi’s Guidance Development
12th Jan 2023
The oil and gas sector is both one of the most imperative and most challenging sectors to decarbonize. Fossil fuels represent the largest source of carbon dioxide emissions and one of the largest methane emitters, but there is currently no pathway for companies in this sector to use for setting science-based targets.
To facilitate the level of action necessary, the Science Based Targets initiative (SBTi) is developing sector-specific methodologies for oil and gas (O&G) companies to set science-based targets. As part of this process, the SBTi is today publishing a new report, summarizing the input received from its specially-convened expert advisory group (EAG).
The EAG evaluated specific technical and methodological issues related to the development of an O&G science-based target setting methodology. The conclusions outlined in the Oil and Gas Project: Expert Advisory Group Review Evaluation Report will assist the SBTi in defining the further activities and research needed to progress the project.
O&G Project Timeline
In 2019, the SBTi initiated its O&G Project to develop methods and guidance to enable science-based target-setting in the sector. The project aims to allow stakeholders, companies, investors, governments and civil society to understand the alignment of O&G companies’ emissions reduction targets with the level of transformation required to meet the temperature goals of the Paris Agreement.
Work on the O&G Project continued throughout 2020 and 2021, including publication of draft guidance, a public consultation phase from August to October 2020 and a technical review process from September 2020 to March 2021. The consultation and review raised several key outstanding issues to overcome before guidance can be developed for this sector.
In September 2022, the SBTi published the O&G Project Interim Report, providing more detail on the project to date and detailing the key issues to be evaluated by the EAG. To help address the remaining issues outlined in the Interim Report, the SBTi appointed Mott MacDonald to convene an EAG in 2022.
The aim of the process was to draw on expert knowledge to develop a series of recommendations for the SBTi to help overcome the outstanding issues. The members of the EAG were selected to provide the range of expertise required on the key remaining issues. More details on the selection of the EAG and the final members chosen can be found in section 2 of the report. The EAG conducted its reviews over two months between August and October 2022, consisting of attendance at topic-focused review sessions and population of a tailored evaluation form.
The EAG process provided clarity and recommendations on many of the key outstanding issues. The EAG review has also highlighted some gaps that may require further work during the next steps of the O&G project. The outcomes of the EAG review are summarized within the report in order of least to most effort.
The SBTi’s O&G team will now conduct a thorough review of the EAG’s report to consider the recommendations and evaluate next steps. The O&G team will publish a more comprehensive project timeline in early 2023.
We must phase out fossil fuels at the societal level - and that starts with individual O&G companies cutting emissions across scopes 1, 2, and 3 in line with science. The resulting guidance from this project will address this critical sector and encourage O&G companies to demonstrate their commitment to ambitious decarbonization by joining the SBTi.