Some of the world’s biggest oil companies, including Saudi Aramco and Royal Dutch Shell, pledged on Friday to invest $1 billion to help fight climate change as a global deal to wean the world off fossil fuels came into force.
The Oil and Gas Climate Initiative (OGCI), which also includes Total, BP, Eni, Repsol, Statoil, CNPC, Pemex and Reliance Industries, has established the Climate Investments fund which will help develop carbon-reducing technologies over the coming ten years.
“OGCI is adding shared investment to shared action toward a lower carbon future – and I expect opportunities to grow and investments to prosper over time,” said BP Chief Executive Bob Dudley in a statement.
The investment is nevertheless dwarfed by the joint annual spending of the member companies, even as they battle one of the longest downturns in the sector’s history. Shell, Total, BP, Statoil, Repsol and Eni are expected to spend nearly $100 billion in 2016.
The 10 firms, which jointly produce around 20 percent of the world’s oil and gas, said a “large share” of the $1 billion pledged would go toward speeding up the use of carbon capture, use and storage (CCUS) in gas-fired power plants.
OCGI has screened a list of 200 CCUS-related technologies already and is now assessing which one or ones to develop to commercial scale.
The group will also invest in reducing methane emissions and improving efficiency in transport and energy-intensive industries.
The announcement coincides with the official coming into force of the 2015 Paris Agreement, intended to wean the world economy off coal, oil and gas in the second half of this century in order to slash carbon emissions.
The oil and gas sector, which is directly responsible for 5 percent of manmade greenhouse emissions and the use of its products for another 32 percent, is under growing pressure from investors and the general public to help fight climate change.
Critics have said oil companies need to do more to reduce emissions and to shield themselves from climate change risks.
“Companies could be worth considerably more, not less, if they aligned their portfolios with 2˚C by exercising capital discipline and opting for lower-cost upstream projects that make both financial and climate sense,” said Anthony Hobley, chief executive of think tank Carbon Tracker Initiative.
Reuters