Equinor sets ambition to reach net-zero emissions by 2050
Equinor today announces its ambition to become a net-zero energy company by 2050. The ambition includes emissions from production and final consumption of energy. It sets a clear strategic direction and demonstrates Equinor’s continued commitment to long-term value creation in support of the Paris Agreement.
“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,” says Anders Opedal who today took over the position as Chief Executive Officer (CEO) and President of Equinor.
Earlier this year, Equinor announced its plans to achieve carbon neutral global operations by 2030 and to reduce absolute greenhouse gas (GHG) emissions in Norway to near zero by 2050. At the same time, Equinor outlined a value-driven strategy for significant growth within renewables, as well as a new net carbon intensity ambition. Continuing to deliver on the short and mid-term ambitions will be key to achieving net-zero emissions.
“Equinor has for years demonstrated an ability to deliver on climate ambitions and has a strong track record on lowering emissions from oil and gas. Now, we are ready to further strengthen our climate ambitions, aiming to reach net zero by 2050,” Opedal says.
Equinor expects to deliver an average annual oil and gas production growth of around 3 percent from 2019 to 2026. Equinor is well positioned with world-class global assets in attractive areas with substantial value creation potential. By optimizing its portfolio through financial discipline and prioritization, Equinor will continue to develop competitive and resilient projects whilst maintaining industry-leading recovery rates, unit costs and carbon efficiency. The net-zero ambition will strengthen future competitiveness and value creation at the Norwegian continental shelf (NCS). Equinor’s plans for production, development and exploration at the NCS remain firm.
Equinor is preparing for an expected gradual decline in global demand for oil and gas from around 2030 onwards. Value creation, not volume replacement, is and will be guiding Equinor’s decisions. In the longer term, Equinor expects to produce less oil and gas than today.
To develop Equinor as a broad energy company, renewables will be a significant growth area. Equinor has previously set ambitions for profitable growth within renewables and expects a production capacity of 4-6 Gigawatts (GW) by 2026 and 12-16 GW by 2035 (1). Equinor now plans to expand its acquisition of wind acreage, with the aim of accelerating profitable growth and will continue to leverage its leading position in offshore wind. Equinor will establish renewables as a separate reporting segment from first quarter 2021. (1) Equity share.
To achieve net-zero emissions requires a well-functioning market for carbon capture and storage (CCS) and natural sinks, as well as the development of competitive technologies for hydrogen. Building on its capabilities from oil and gas, Equinor is well positioned to provide low-carbon technologies and establish zero-emission value chains. Equinor is driving the development of these technologies through projects such as Northern Lights, which aims to store CO2 from industrial sites across Europe. Equinor also assumes that an increasing share of oil and gas will be used for petrochemicals towards 2050.
“Climate change is a shared challenge. The combined efforts of governments, 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 emissions, and develop CCS and zero-emission value chains for a net-zero future,” says Opedal.
Equinor expects to present an updated strategy at its Capital Markets Day in June 2021.
Equinor’s net-zero ambition covers scope 1 and 2 GHG emissions (operated basis 100%) and scope 3 GHG emissions (use of products, equity share).
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Equinor’s climate ambitions
Become net zero by 2050. The ambition includes scope 1, 2 and 3 GHG emissions, where scope 3 emissions represent a calculation of indirect emissions from customers’ use of Equinor’s equity production volumes.
Reduce emissions from oil and gas. Maintain industry leading carbon efficiency by (i) aiming to reach upstream <8 kg CO2 per boe by 2025, (ii) achieving carbon neutral global operations by 2030, (iii) reducing absolute greenhouse gas emissions from operated offshore fields and onshore plants in Norway towards near zero by 2050 without offsets, and (iv) ensuring no routine flaring and near zero methane emissions intensity by 2030.
Grow in renewable energy. Expecting a production capacity of 4-6 GW by 2026 and 12-16 GW by 2035, Equinor equity.
Reduce net carbon intensity to zero by 2050.
Boundaries and assumptions
- Our net-zero ambition covers scope 1 and 2 GHG emissions on an operational control basis (100%) and scope 3 GHG emissions (use of products, category 11, on an equity share basis).
- Success will depend on society moving towards net zero in 2050.
- We assume a well-functioning market for carbon capture and storage and natural sinks, and that these mechanisms can be accounted for as negative scope 3 emissions.
- We assume development of a hydrogen market.
- We assume that that an increasing share of oil and gas will be used for petrochemicals towards 2050.
See methodology note on Equinor.com/climate.
Cautionary statement
This release contains certain forward-looking statements that involve risks and uncertainties. In some cases, we use words such as “aim”, “ambition”, “assume, “become”, “continue”, “expect”, “may”, “strategy”, “will”, “in line with”, and similar expressions to identify forward-looking statements. Forward-looking statements include all statements other than statements of historical fact, including, among others, statements regarding Equinor’s ambitions, plans, intentions, aims and expectations with respect to Equinor’s climate ambitions, including to reach net-zero emissions by 2050; to create value for shareholders, to reduce absolute greenhouse gas emission in Norway, to reduce net carbon intensity, to reduce emissions from oil and gas; its aims and ambitions with respect to reaching <8kg CO2 per boe by 2025, achieving carbon neutral global operations by 2030, reducing greenhouse gas emissions from operated offshore fields and onshore plants in Norway, and ensuring no flaring and methane emissions intensity by 2030; its expectation regarding the growth in its renewable energy capacity by 2026 and 2030 including plans to expand its acquisition of wind acreage, the aim of accelerating profitable growth in its renewable capacity and to leverage its leading position in offshore wind; its expectations for oil and gas production growth from 2019 to 2026, gradual decline in global demand for oil and gas from around 2030 and its longer term production of oil and gas; its focus on value creation from oil and gas production, optimizing of its portfolio and maintaining industry-leading recovery rates, unit costs and carbon efficiency; its aim that the net-zero ambition will strengthen future competitiveness and value creation at the Norwegian continental shelf; and its abilities to provide low carbon technologies.
These forward-looking statements reflect current views about future events and are, by their nature, subject to significant risks and uncertainties because they relate to events and depend on circumstances that will occur in the future and are beyond Equinor’s control and are difficult to predict. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including societal shifts in consumer demand and technological advancements, levels of industry product supply, demand and pricing in particular in light of recent significant oil price volatility triggered, among other things, by the changing dynamic among OPEC+ members and the uncertainty regarding demand created by the Covid-19 pandemic; the impact of Covid-19; health, safety and environmental risks; price and availability of alternative fuels; the political and economic policies of Norway and other jurisdictions where we have assets; general economic conditions; political and social stability and economic growth in relevant areas of the world; global political events and actions; changes in, or non-compliance with, laws and governmental regulations; the timing of bringing new projects on stream; an inability to meet strategic objectives or exploit growth or investment opportunities; adverse changes in tax regimes; the development and use of new technology; geological or technical difficulties; operational problems; the difficulties involving transportation infrastructure; the actions of competitors; the actions of counterparties and competitors; the actions of governments (including the Norwegian state as majority shareholder); natural disasters, adverse weather conditions; climate change and other changes to business conditions; the effects of climate change; an inability to attract and retain skilled personnel; relevant governmental approvals; labour relations and industrial actions by workers and other factors discussed elsewhere in Equinor’s publications, any of which could impair Equinor’s ability to meet its climate ambitions. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot assure you that future results will meet these expectations. Additional information, including information on factors that may affect Equinor’s business, is contained in Equinor’s latest Annual Report and Form 20-F, filed with the U.S. Securities and Exchange Commission (and section Risk review – Risk factors thereof), which is available at Equinor’s website (www.equinor.com).
You should not place undue reliance on these forward-looking statements. Actual results could differ materially from those anticipated in these forward-looking statements for many reasons. Equinor does not assume any responsibility for the accuracy and completeness of any forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made. Unless required by law, we will not necessarily update any of these statements.
Equinor is including an estimate of emissions from the use of sold products (GHG protocol category 11) in the calculation of its net zero ambition and net carbon intensity ambition as a means to more accurately evaluate the emission lifecycle of what we produce to respond to the energy transition and potential business opportunities arising from shifting consumer demands. Including these emissions in the calculations should in no way be construed as an acceptance by Equinor of responsibility for the emissions caused by such use.