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Researchers have warned that transition plans set out by European and US oil majors would likely contribute to a global temperature rise of 2.4°C, urging banks and public financiers to halt backing for fossil fuel expansion. 

A report from environmental campaign group Oil Change International says the eight largest oil companies across the two regions all have “insufficient” or “grossly insufficient” strategies to align with the Paris Agreement. 

The report argues those companies’ plans are overly reliant on carbon capture, storage and removal technologies, which it says “have a track record of failure and limited feasibility”. 

It also criticises their expansion plans, saying that even limiting extraction of oil, gas and coal to existing and under-construction fields would produce more than three times the pollution allowable to restrict warming to 1.5°C. 

“US and European oil majors have no intention of phasing out their fossil fuel business at the pace required, and are therefore a deeply risky investment,” says David Tong, campaign manager at Oil Change International.  

“They continue to invest billions in new oil and gas, increasing stranded asset risks – all while spreading misinformation and lobbying against meaningful climate policies to delay the transition to renewable energy,” he tells GTR. 

“Their plans risk disaster for communities and the climate. An investment in oil and gas companies is a bet on climate chaos.” 

The eight oil majors named are BP, Chevron, ConocoPhillips, ENI, Equinor, ExxonMobil, Shell and TotalEnergies. 

The report scores each company against 10 criteria, including whether they have committed to stopping exploration or approvals for new extraction projects, and whether they have set absolute targets for reducing greenhouse gas emissions. 

Of the 80 scores given, just one – ENI’s emissions reduction target – is considered “partially aligned” with minimum baselines for meeting Paris Agreement goals, it concludes. 

 

Carbon capture 

For non-reliance on carbon capture, storage and offsets, all eight companies’ plans are labelled “grossly insufficient” by Oil Change International. 

Such technologies are used to collect carbon dioxide that would otherwise enter the atmosphere, which can then be compressed, transported, reused or stored. 

According to the International Energy Agency (IEA), deployment has “grown substantially” in recent years, although a 2022 study by the Institute for Energy Economic and Financial Analysis found that of 13 flagship projects, eight failed or underperformed. 

“To meet climate targets, companies are planning to rely heavily on the ‘net’ in ‘net-zero’, particularly by investing in carbon capture and carbon offsets, which may prolong the life of fossil fuels [and] have a long track record of failure,” it says. 

“A more rapid phase-out would minimise the risks of temperature overshoot and of reliance on carbon capture and storage and engineered carbon removal.” 

The argument contrasts with an article published last week by ExxonMobil’s senior vice-president for carbon capture and storage, Dominic Genetti, who argues the technology “is proven, and ready now at scale”. 

Genetti cites an IEA paper saying climate goals will be “virtually impossible” without such tools, and says ExxonMobil has already agreed to store up to 5 million tonnes per year of carbon dioxide for its industrial customers. The company did not respond when contacted. 

Equinor spokesperson Rikke Høistad Sjøberg also cites the IEA’s backing for such technology.  

Equinor has been safely storing carbon dioxide underground since 1994, “demonstrating the competence and capabilities needed for developing CO2 transport and storage as a commercial business that will also support the decarbonisation of the hard-to-abate industries”, she tells GTR. 

The company plans to store up to 50 million tonnes per year by 2050, far in excess of its scope 1 and 2 emissions. 

“The role of the long experience of carbon storage at the Norwegian continental shelf is misunderstood and misrepresented in the report,” Høistad Sjøberg says. 

 

Bank exposure 

The report comes as lenders face scrutiny over their exposure to the fossil fuel sector. 

According to data published earlier this month by a group of NGOs including Oil Change International, overall lending and underwriting to the eight oil majors totalled around US$434bn between 2016 and 2023. 

Campaign group Carbon Tracker warned in March that banks will face growing pressure from investors and authorities to ensure their capital is being deployed sustainably, making fossil fuels an increasingly high-risk sector unless energy companies cut emissions. 

Oil Change International urges investors to intervene to ensure oil and gas companies phase out polluting products. 

It also calls for a halt to public finance for fossil fuel extraction and infrastructure, including carbon capture and storage. 

When contacted by GTR, some of the oil majors named in the report dispute its findings. 

“In general we appreciate the scrutiny of plans and ambitions for the energy transition, but it is our view that this report misrepresents Equinor’s energy transition plan and our climate ambitions which are aligned with the goals in the Paris Agreement,” says Equinor’s Høistad Sjøberg. 

A spokesperson for Shell says: “We agree that society needs to take urgent action on climate change, but we do not recognise the conclusions of this report.  

“Shell is committed to becoming a net-zero emissions energy business by 2050, a target we believe supports the more ambitious goal of the Paris Agreement to limit global warming to 1.5°C above pre-industrial levels.” 

The spokesperson says Shell has already achieved more than 60% of its target to halve scope 1 and 2 emissions by the end of 2030, compared to 2016 levels, has significantly reduced methane emissions and is investing up to US$15bn on low-carbon energy solutions between 2023 and 2025. 

BP, Chevron, ConocoPhillips, ENI, ExxonMobil and TotalEnergies did not comment when contacted.