Oil and Gas
Guidance for the oil and gas sector
Why take action?
The combustion of fossil fuels represents the single largest source of carbon dioxide emissions. In addition, the oil and gas industry is one of the largest contributors of methane emissions. To meet the goals of the Paris Agreement and avoid catastrophic irreversible climate change, the sector must radically transform.
Oil and gas companies are highly exposed to low-carbon transition risks - as well as opportunities. With its considerable scientific, technical, economic and financial assets, the sector wields enormous power to drive ambitious climate action and build the low-carbon, sustainable economy that we urgently need.
A new methodology
We are developing a new methodology for companies extracting fossil fuels to set science-based targets. This new pathway is due to be launched in 2021. Until then, the SBTi is unable to validate targets for companies in the oil and gas sector.
We urge companies in the sector and interested stakeholders to take part in the development process for the new methodology. Please find more details below.
If your company is interested in leading the way to a low-carbon future for the industry, please get in touch or join the SBTi mailing list.
The purpose of this project is to develop science-based target-setting methodologies that allow stakeholders, including companies, investors, governments and civil society, to understand the alignment of Oil, Gas and Integrated Energy company emissions reduction targets with the level of transformation required to meet the goals of the Paris Agreement. The project, first and foremost, will address embedded emissions in fuel supplied, but will also seek to address scope 1 emissions (energy and methane process emissions). At a later stage the project should consider scope 2 emissions and links to refinery and petrochemical industry, consistent with the SBTi’s chemical sector development.
A technical working group composed of approximately 20 members representing civil society organizations, Oil, Gas and Integrated Energy companies, investors, policymakers, academics, and other experts convene regularly. Up to ten meetings were held up until August 2020. The methodology development is led and supported by CDP. CDP drafts methodology documents and makes proposals to the technical working group, which then provides input and recommendations.
A public consultation took place from August until the end of October 2020.
This development occurs simultaneously with the ACT – Assessing Low-Carbon Transition Oil and Gas sector methodology development, convened by ADEME and CDP, and with its own technical working group. Several meetings have been held with both the SBT and ACT technical working groups.
The SBTi Oil, Gas and Integrated Energy Companies Methodology development is supported by a technical working group including:
- World Wildlife Fund (WWF), World Resource Institute (WRI), UN Global Compact, World Benchmarking Alliance, Carbon Tracker, Climate Accountability Institute, UK OG Authority, Agence de la transition écologique (ADEME), University of Queensland Business School, Imperial College London, HSBC, Aviva Investors, i Care & consult, Shell, Galp, Total, bp, Eni, Repsol, California Resources Corporation (CRC)
The project was launched by CDP in November 2019 and was kicked off with the first meeting of its technical working group. A public consultation took place from August 10th to October 30th. It is planned for the methodology to be delivered to the SBTi in early 2021.
- Guidance document
- 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
- To be added later:
- Annex C: Considerations on the selection of scenarios for target setting of Oil, Gas and Integrated Energy companies
- Annex E: Creating a “Secondary Energy carbon intensity pathway” that aligns with the WTW indicator
- Annex G: Upstream: Scope 3, USP (SDA, convergence)
- Key Questions & Logistics for consultation
- Commenting Survey
- Video explanations and guides to the public consultation
- Introduction to the project
- Consultation documents and project deliverables
- 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
- Webinar recordings/slides – Dates to be announced
- Relevant papers – released as available
Browse more sectors
If your sector is not listed here, you can still set a science-based target using our methods and resources. Consult the step-by-step guide to get started.