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* Includes CO2 emissions from products in target
* Emissions target based on intensity, not absolute output
* For FACTBOX on oil company climate targets:
* GRAPHIC-Going green?
(Recasts with climate strategy)
By Nerijus Adomaitis and Terje Solsvik
OSLO/LONDON, Feb 6 (Reuters) - Equinor joined
other major European oil and gas companies on Thursday by
including emissions from the fuel it sells to customers in its
carbon reduction targets as investors step up the pressure on
fossil fuel producers.
By including so-called Scope 3 emissions on top of the
emissions from its own operations, the Norwegian company is now
broadly in line with Royal Dutch Shell and Total
, though all fall short of Spain's Repsol.
Equinor is also now ahead of BP, Eni and
U.S. companies Exxon, Chevron and ConocoPhillips
, which have not yet included Scope 3 emissions in their
carbon reduction targets.
Oil and gas producers argue they cannot control emissions
from the use of the products, such as petrol in a car, but
investors worried about climate change have stepped up the
pressure on them to take some responsibility.
Like Royal Dutch Shell and Total, Equinor is now targeting a
reduction in its net carbon intensity, rather than Repsol's more
ambitious plan to spend more than $5 billion to cut overall
emissions to net zero by 2050.
Intensity-based targets measure the amount of greenhouse gas
(GHG) emissions per unit of energy, or barrel of oil and gas,
produced. That means absolute emissions could rise as output
grows, even if the headline intensity metric falls.
"The ambition to reduce net carbon intensity by at least 50%
by 2050 takes into account scope 1, 2 and 3 emissions, from
initial production to final consumption," Equinor said on
Thursday when announcing fourth-quarter results.
Scope 1 refers to emissions from a company's direct
operations, such as a generator on an oil rig, while Scope 2
includes emissions generated by third parties such as power
companies used by oil producers.
OFFSHORE WIND
"Repsol has shown the net zero 2050 ambition we need," said
Edward Mason, head of responsible investments at the Church of
England, which has been buying shares in oil and gas companies
so it can push them to make stronger climate commitments.
"Equinor is doing some great stuff, particularly on (Scope 1
and 2 emissions), but I'm not sure a pledge to halve carbon
intensity by 2050 does it any more," he said on Twitter.
Equinor, which has been building a renewables business
mainly focused on offshore wind, will also achieve its renewable
investment target sooner than planned, its chief financial
officer told Reuters on Thursday.
Equinor plans to spend up to $2 billion-$3 billion a year in
2022-2023 on renewable projects, out of a total capital spending
of some $12 billion. That's 17%-25% of the total, up from a
previously announced target of 15%-20% by 2030.
"We will reach the target sooner than previously announced,"
Chief Financial Officer Lars Christian Bacher said.
The company said it wanted to grow its renewable energy
capacity 10-fold by 2026 to 4-6 gigawatts (GW) and have 12-16 GW
of installed capacity by 2035.
It is mainly focusing on offshore wind power, including
projects in Britain, the United States and Poland. It has also
invested in Norwegian solar power producer Scatec Solar
.
"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," said Equinor CEO Eldar Saetre.
Equinor reported a smaller-than-expected drop in
fourth-quarter core operating profits as a major new oilfield
partly mitigated the impact of weak European gas markets.
Its adjusted earnings before interest and tax (EBIT) fell to
$3.55 billion from $4.39 billion in the same period of 2018.
Its shares were down 2.5% at 1200 GMT, underperforming
European oil stocks overall which were 0.2% higher.
(Additional reporting by Shadia Nasralla and Ron Bousso in
London; Writing by Gwladys Fouche; Editing by David Clarke)
