According to the report, companies like Shell were told that standard would require them to stop developing new oil and gas fields with when they submitted a climate plan or from the end of 2027.DARRYL DYCK/The Canadian Press
Shell Plc (SHEL-N) and other leading energy groups have abandoned a six-year-long attempt to define a net zero emissions strategy after being told that such a standard would require them to stop developing new oil and gas fields, the Financial Times reported on Tuesday, citing documents seen by the newspaper.
Shell, Norway’s Aker BP Plc (BP-N) and Canada’s Enbridge Inc (ENB-T) have all quit the expert advisory group of Science-Based Targets initiative since late last year, the FT reported.
The Science-Based Targets initiative, a leading assessor of company climate goals, confirmed it has paused development of the oil and gas standard due to “significant, resource-intensive development” it still required.
“This is the sole reason behind our decision...we will return to Oil & Gas Standard development, with the precise timing to be determined as we finalize our forward work program,” a spokesperson for the group said.
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In March, the body had proposed new rules to better help companies set high-quality emissions-reduction plans.
The companies quit the initiative as draft standards seen by the FT stated that the companies should not develop “new oil and gas fields” once they submitted a climate plan, or from the end of 2027, whichever was sooner.
The initiative has “paused” work on the oil and gas standard citing “capacity considerations,” but denied this was linked to the oil and gas industry departures, saying there was “no basis in reality for these claims,” the FT report said.
Shell said in a statement that it supports science-based methodologies and believes standards should reflect “realistic societal and economic changes” while allowing flexibility to reach net-zero goals.
“In the absence of an industry-wide standard, Shell has used 1.5°C scenarios developed for the UN Intergovernmental Panel on Climate Change in setting its targets, which we believe demonstrates Paris alignment,” a company spokesperson said.
Shell told the FT that its expert had withdrawn after seeing a draft standard that “did not reflect the industry view in any substantive way,” while BP told the newspaper it had left the advisory panel after finding its “ability to influence” the standard “limited.”
Enbridge did not immediately respond to a Reuters request for comment, while BP could not be immediately reached.