Saudi Aramco still has a long way to go to ensure that its emissions match those of other oil companies.
Oil companies are under pressure to reduce emissions. The process begins with the release of their full carbon footprint so that investors and the public can keep it in their account.
Earlier this year, Bloomberg Green analysis found that the world’s largest oil company, Saudi Aramco, had kept its emissions as low as 50%. The company’s 2019 announcements only included wholly-owned assets held in Saudi Arabia, leaving large amounts of high-emissions assets abroad. In response, the agency said it would increase its reporting.
In its latest annual report, published in March, Armco equated its 2019 emissions from 57.9 million metric tons of carbon-dioxide to 71 million tons. This is a 23% increase, which the company attributed to the addition of emissions from three wholly-owned assets in Saudi Arabia, the United States and Germany.
The agency reported emissions of 67 million tonnes last year, slightly lower than in 2012 because the epidemic reduced demand for oil and gas. However, a closer look at the numbers reveals that Armco still has a long way to go to ensure that its emissions match those of other oil majors, such as Royal Dutch Shell plc and Chevron Corp.
Armco acknowledged in its 2020 annual report that emissions from two fully owned assets were not included in the list. The statement said, “The Fahili gas plant and the Jazan refinery were not fully operational and various stages of commissioning and commissioning were introduced in 2020,” the statement said, adding that it would start calculating those facilities in the 2021 report.
The company is only stuck with disclosures from assets over which it has operational control. This means excluding most of its joint ventures, both in Saudi Arabia and around the world. It has multiple refineries and chemical complexes, according to Bloomberg calculations, which could add about 2 million tons to Aram’s direct emissions base based on its share of ownership.
Aramco’s release so far has only revealed the release of Scope 1 and 2, which range from burning fossil fuels to managing its work or importing electricity into its buildings. The company does not disclose its Scope 3 emissions when customers burn its fossil fuels.
A Bloomberg poll estimates that Armco has put Scope 3 emissions at 1.6 billion tons, more than 4% of all global emissions, even Exxon Mobil Corp., which is the longest Western oil company to disclose Scope 3 figures this year. Initially they started reporting.
Asked about the latest release, Aramco said it “wants to maintain a track record of one of the lowest upstream carbon footprints and one of the industry’s lowest methane intensities.” It added: “There is a clear and deliberate way to enhance the disclosure details of Aramco emissions.”
While it may be true that the process of extracting oil in Saudi Arabia results in very low emissions per barrel, the company’s incomplete reporting makes the oil giant’s carbon credentials harder to compare to its peers. If the world’s top emitters do not disclose the actual amount of their impact on atmospheric carbon-dioxide levels, the world is less likely to have net-zero emissions in a few decades.
Akshat Rathi writes the Net Zero newsletter, which examines the nation’s race to cut emissions through the lens of business, science and technology. You can email him with feedback.
To contact the authors of this story:
Arathi39@bloomberg.net Untouched Rathi in London
Matthew Martin of Riyadh at Mmartin128@bloomberg.net