Norwegian oil and gas giant Equinor became the latest energy company to announce its ambitions to reach net zero by 2050.
This net zero ambition includes both emissions from production and the actual final consumption of the energy it creates.
Anders Opedal, who took over the position as CEO and President of Equinor yesterday when the net zero plans were announced: “Equinor is committed to being a leader in the energy transition. It is a sound business strategy to ensure long-term competitiveness during a period of profound changes in the energy systems as society moves towards net zero. Over the coming months, we will update our strategy to continue to create value for our shareholders and to realise this ambition.”
Equinor announced its plans to achieve carbon neutral global operations by 2030 and to reduce absolute greenhouse gas emission in Norway to near zero by 2050 earlier this year. At the same time they outlined a value-driven strategy for significant growth of their renewables portfolio and a new net carbon intensity ambition. The company expects to present an updated strategy at its Capital Markets Day in June 2021.
Net zero ambitions are blowing in the wind
The energy company foresees an average annual oil and gas production growth of around 3% between 2019 to 2026. They are, however, preparing for an expected gradual decline in global demand for oil and gas from 2030 onwards. Thus, they say, value creation and not volume replacement will guide their decision. In the longer term Equinor expects to produce less oil and gas today and to develop the company, renewables will become a significant growth area.
They had previously set ambitions for profitable growth within renewables and expect a production capacity of 4 to 6GW by 2026 and 12 to 16GW by 2035. They now plan to expand their wind acreage to accelerate profitable growth and continue leveraging their leading position in offshore wind. Equinor will establish renewables as a separate reporting segment from the first quarter of 2021.
Equinor cautioned in their plans that achieving a net zero emission position assumes a well-functioning global market for carbon capture and storage and natural sinks, as well as competitive technologies for hydrogen, will be achieved. For their part, Equinor is driving the development of these technologies through projects such as Northern Lights which aims to store CO2 from industrial sites across Europe. They also assume that an increasing share of oil and gas will be used to create petrochemicals towards 2050.
“Climate change is a shared challenge. The combined efforts of government, industries, investors and consumers are crucial to reaching net zero emissions, for Equinor and for society. Together we can overcome technological and commercial challenges, cut emission and develop CCS and zero-emission value chains for a net-zero future,” said Opedal.