Overview of Energy Majors’ Sustainable Ambitions
How energy majors’ targets can impact your operations
Summary - Virtually all energy majors have 2050 as target date for carbon neutrality, focussing mainly on Scope 1 and 2 emissions. Ørsted and Equinor have the most ambitious and stringent targets, followed by Repsol, Eni, Shell, TotalEnergies and BP.
Except for Ørsted, all legacy majors cling to ‘business as usual technologies’. These include synthetic fuels, carbon capture and storage or hydrogen-carriers and derivatives. This diverse technology focus reflects uncertainty about the ‘technology of the future’.
Most energy majors include a carbon tax of approximately $50 - $100 per mT CO2 for their investments, which could include you when working for them. Introduce emission savings in your tender proposal to reflect investment savings to improve your offer. Contact the helpdesk for assistance.
This blog and the tool use publicly available information updated until late 2022.
From laughable idea to reality – carbon neutrality
Two years ago, energy majors were still called oil and gas majors. Evidently a lot has happened since that time, the most important of which is of course the ambitions set by these companies.
Virtually all other energy majors including Shell, BP, TotalEnergies, Eni, Repsol, Aramco, ExxonMobil, Chevron, Petrobras, Petronas, PetroChina, Sinopec and Rosneft, have ambitions to become carbon neutral by 2050.
A remarkable fact in and of itself, it should be noted that most majors are in the process of setting clear intermediate targets and are actually accelerating their ambitions. Targets that were unheard of just two years ago are now common practice, and most energy majors seem to follow – or align themselves closely – with the strict EU target of 55% reduction by 2030, carbon neutrality by 2050.
The acceleration of ambitions by energy majors shows not only how fast times are changing, but also the fact that regulations from energy majors will most likely be increased exponentially in the years ahead.
So what?
One can argue however the extent to which these ambitions will lead to tangible changes for maritime companies and shipowners. On paper and in public, almost everyone agrees that climate change is a threat and that they must play a role in the energy transition. But the urgency with which the companies are planning to transform their businesses could not be more different. Some energy majors have even gone so far as to publicly calling ‘net zero a fad’.
The question is therefore: “to what extent will the energy majors impact your operations in the coming years?”
For most cases, the answer will likely be very little, especially when it comes to shore power requirements. Nevertheless, there are noteworthy differences between the majors that will shape your decision making, in particular the Scandinavian majors who are traditionally most bullish when it comes to sustainability. Contact the helpdesk for more help on tendering for energy majors.
Scope I, II and III emissions
It is important to note that there is a big difference in how exactly ambitions are framed. Commonly heard and often interchanged vocabulary is ‘net zero’, ‘carbon neutral’, ‘carbon intensity’ and many more. The nuances and a lack of standard makes these targets hard to interpret. The most important cross-industry guideline to be used is Scope definition.
Generally speaking, a company’s carbon footprint is defined in three different scopes. To everyone’s surprise, these are called Scope 1, Scope 2 and Scope 3.
Scope 1 emissions are direct greenhouse gas emissions from company operations.
Scope 2 emissions are indirect emissions from energy consumed by the company.
Scope 3 emissions are defined as greenhouse gas emissions that are a consequence of company activities, but occur from sources not owned or controlled by the company. They are also called value chain emissions and can be upstream or downstream of a company’s operations.
The most important for shipowners are Scope III emissions of energy majors, because these are Scope I emissions of shipowners. In the case of energy majors, you - shipowners and service provides - are the energy major’s Scope 3 emissions.
In short, even though most carbon neutral ambitions will impact your project or tender ‘somewhat’, as project and tender managers usually have targets with regards to emission reductions, these will not become stringent until a company has to reduce Scope III emissions officially. Contact the helpdesk for more help on tendering for energy majors.
More stories
Virtually all energy majors have 2050 as target date for carbon neutrality. Most focus solely on Scope I and II emissions. Ørsted and Equinor have the highest ambitions and most stringent targets. Repsol, Eni, Shell, TotalEnergies and BP are following suit.
Following a historic vote in parliament on December 15th 2020, the Norwegian Government announced its funding decision for the ‘Northern Lights’ CO2 transport and storage project. The project aims to create a carbon capture and storage hub in Norway, open to third parties. It will be the first ever cross-border, open-source CO2 transport and storage infrastructure network and offers European industrial emitters the opportunity to store their CO2 safely and permanently underground.
Equinor will explore opportunities within the realm of floating solar power. Together with Moss Maritime the company wants to start testing near the island of Frøya in the late summer of 2021. The plant will measure 6400 m2 and rise 3 meters above sea level and appears to be made of interlinked rigid structures.
BP and Ørsted have partnered to develop a zero-carbon hydrogen at BP’s Lingen Refinery in north-west Germany, BP's first full-scale project in a sector that is expected to grow rapidly. The 50 MW electrolyser project is expected to produce 1 ton of hydrogen per hour - almost 9,000 tonnes a year - starting in 2024. The project could be expanded to up to 500 MW at a later stage to replace all of Lingen’s fossil fuel-based hydrogen.
Maersk and Ørsted are building a ‘power-buoy’ that can act as both a mooring point and a charging station for vessels, enabling them to turn of their engines when laying idle.
According to Equinor, carbon capture and storage will be vital to reach the global climate goals of the Paris Agreement. They are very pleased that the Northern Lights partners and leading European companies have taken the first steps to realize a European CO2 transport and storage system! In simple terms, carbon capture and storage deals with removing CO2 from emission sources and storing it permanently underground, so that it is not released to the atmosphere.
The Port of Marseille, headquartering CMA CGM, committed themselves, by signing a Blue Charter, to respecting rules that are much more stringent than national and international regulations. These include the use of shore power from 2025 for ships fitted with the equipment.
The Global Pricing Dashboard made by the World Bank is one of the most complete overviews carbon pricing initiatives worldwide. 23.17% of all global greenhouse gas emissions were covered in 2022. Only EU ETS aims to incorporate shipping emissions at the moment, others are expected to follow suit.
One of the most stringent ports in the world regarding shore power, which is mandatory by 2027 for all vessels by authority of CARB.
China officially aims for carbon neutrality “before 2060”. With legislation on carbon tax and fuel specifications upcoming but not yet active in the foreseeable years, main focus has been on the development of shore power infrastructure but the technology remains under-utilized in ports in the country.
Learn more about the targets, ambitions and upcoming rules and regulations of the Netherlands with regards to maritime sustainability here.
IMO aims for 11% carbon intensity reduction per 2026, 40% in 2030 and 70% reduction in 2050. MARPOL and MEPC are key regulatory bodies within IMO. Virtually all rules and regulations apply to vessels of 5.000 GT and above. The most important rules and regulations for shipowners to comply with are SEEMP (includes DCS and CII), EEXI/EEDI and Emission Controlled Areas (ECAs).
A global carbon tax has been proposed by an IMO working group, but the costs and effective date are far from known. Learn what is known about the proposed pricing here.
Cruise ships capable of accommodating more than 100 passengers in Sydney Harbour are required to limit emissions of sulphur oxides when berthing (maximum 0.10% m/m). It is like a mini-ECA in Sidney waters. Learn more here.
China’s coastal shipping sector is to implement low-carbon marine fuel regulations no later than 2030. Learn more about the low-carbon fuel regulations in China here.
China’s national ETS – the world’s largest in terms of covered emissions – started operating in 2021. Shipping is not included, for the moment. Learn more about ETS here.
Emissions from cruise ships and ferries in World Heritage Fjords are to be zero by 2026 latest. Read more here.
The ETD is the principal taxing scheme used for fossil and low-carbon fuels in EU. Fossil fuels will be taxed more, and renewable low-carbon fuels will receive incentives, including shore power.
RED targets supply side - production - of fuels in the EU, aiming for a 40% energy share from renewable sources by 2030.
AFIR targets the supply side of marine infrastructure and fuels in the EU, mandating the use of low-carbon fuels and shore power by 2030.
EU MRV is the CO2 reporting system in Europe, used for carbon tax determination. It is applicable to vessels of 5000 GT and above. It is expected to apply to 400 GT and above. Learn more about EU MRV here.
ECAs (Emission Control Areas) are sea areas that limit SOx or NOx emissions. Currently there are several ECAs active in North America and Europe. Learn more about ECAs here.
For ships operating outside Emission Control Areas (ECAs), the limit for sulphur content of fuel oil is 0.50% m/m (mass by mass). Learn more about the global sulphur limit for shipping here.
Learn all about the sustainable ambitions of the Port of Singapore, in particular with regards to shore power.
In the Netherlands, ‘Renewable Fuel Units’ (HBEs) are an economic incentive to gradually expand the use of green energy in transport and the reduction of greenhouse gasses. Fossil fuel producers are required to purchase HBEs from green fuel producers. The market is controlled by the Dutch Emission Authority. You can make up to €0.20 per green kWh sold. Learn more about HBEs here.
The Programma Aanpak Stikstof (PAS) is a Dutch law that strictly prohibits the deposition of NOx on environmental protection areas in the Netherlands. Impact on maritime operations can be severe - in particular for wind farm construction - required 80% NOx reduction on top of Tier III restrictions. Learn more about PAS here.
Port of Amsterdam has the ambition to become carbon neutral by 2050 but plans on a zero-emission zone of the inner city by 2025. Learn more about Port of Amsterdam’s sustainable ambitions and shore power here.
Port of Shanghai has the ambition to become carbon neutral by 2060. Learn more about the targets and ambitions of Shanghai with regards to maritime sustainability here.
Port of Hamburg has the ambition to become carbon neutral by 2040. It is one of the most ambitious ports in terms of sustainability in the world and has an installed capacity of 72 MVA of shore power by 2024. Learn more about the targets and ambitions of Port of Hamburg here.
The Ship Energy Efficiency Management Plan II (SEEMP II) is the updated version of the first SEEMP. It includes to obligation of vessels of 5000 GT and above to input CO2 data into the IMO Data Collection System (DCS). Learn more about SEEMP II and how it impacts your vessel’s operations here.
Learn all about the targets, ambitions and upcoming rules and regulations of the Unites Kingdom with regards to maritime sustainability.
Rosneft has the ambition to become carbon neutral by 2050. Learn all more about the targets and ambitions of Rosneft with regards to maritime sustainability here.
Sinopec has the ambition to become carbon neutral by 2050. Learn all more the targets and ambitions of Sinopec with regards to maritime sustainability here.
PetroChina has the ambition to become carbon neutral by 2050. Learn all more the targets and ambitions of PetroChina with regards to maritime sustainability here.
Petronas has the ambition to become carbon neutral by 2050. Learn all more the targets and ambitions of Petronas with regards to maritime sustainability here.
Petrobras has the ambition to become carbon neutral by 2050. Learn all more the targets and ambitions of Petrobras with regards to maritime sustainability here.