Controversial "Zero Carbon Emissions": The International Giants' Promises Are Mixed.

However, due to the fact that there is no clear path to achieve this goal in the world, this makes the international giant, especially the "zero carbon emissions" commitment of traditional energy and resource enterprises, become a "empty talk", which is worrying.

For Global Climate Governance, 2020 is a new year.

The Paris climate agreement adopted before 2015 has established a new global climate governance mechanism after this year, which means that the global action against climate change has entered a new stage of substantive assessment. Affected by this, international giants, including BP group and Rio Tinto Group, have recently expressed their views and strive to achieve net zero carbon emissions in 2050.

"Net zero carbon emissions" refers to the elimination of carbon dioxide emissions to completely offset emissions. However, due to the fact that there is no clear path to achieve this goal in the world, this makes the international giant, especially the "zero carbon emissions" commitment of traditional energy and resource enterprises, become a "empty talk", which is worrying.

Oil enterprises' "zero carbon" dispute

In February of this year, Lu Bona Looney, the new CEO of BP group, completed the first show by announcing a new mission. "Bernard"

According to the announcement issued by the group, the BP group has set 10 specific targets, hoping to achieve the goal of "zero carbon emissions" in 2050 or earlier. Of these 10 specific objectives, 5 are closely related to the BP group itself. First, all business of the group plans to achieve net zero carbon emissions in 2050 or earlier; second, by 2050 or earlier, the net absolute value of oil and natural gas production of the group is zero; third, the carbon intensity of the group's products is reduced by 50% in 2050 or earlier; fourth, all the owners of the group. The oil and gas processing base will install the methane measuring device in 2023 and reduce the concentration of methane emission during operation by 50%. Fifth, the group will gradually increase its investment in non oil and natural gas business.

"The carbon budget in the world is limited and will soon be used up. We need to move quickly to net zero carbon." Lu Bona said that the BP group will fundamentally change its overall organizational structure and always maintain its commitment in transition.

The particularity of the oil and gas industry has made oil and gas enterprises the most sensitive type of enterprises to achieve the goal of "net zero carbon emissions". BP group's oil and gas giant identity, coupled with its announcement of the relevant targets lack of specific implementation plan, so that the group's "ambitious ambition" has been questioned.

The promise of net zero carbon emissions means that BP will change its oil and gas led business structure in the future. An industry insider told the twenty-first Century economic news reporter that the net zero carbon commitment of the group needs to force its transformation in business and operation, but it is not easy to achieve economic and environmental benefits in the transformation process.

In twenty-first Century, the economic news reporter found that in 2018, BP group announced that it plans to invest $300 million a year (about 1 billion 900 million yuan) to expand the existing scale of renewable energy business, and strengthen its technology reserves in electric vehicles and automatic driving, biofuels, carbon footprint, energy storage and information technology. But at the same time, the group still plans to boost oil and gas production in the future.

It is worth mentioning that in the latest 2019 earnings report, BP group's performance has slipped. According to the financial report, the group achieved a profit of about $287 billion 397 million last year, down 6.81% compared to the same period last year, and realized net profit of $4 billion 26 million, down 57.09% from the same period last year. Compared with 2018, BP group's operating income and net profit decreased last year.

However, BP's "net zero carbon emissions" pledge exacerbated the differences between European and American oil companies. In twenty-first Century, a business reporter reported that oil and gas companies that announced "zero carbon emissions" commitments this year are mainly European oil companies, including BP and Norway national oil company Equinor.

In contrast, the US oil companies ExxonMobil and Chevron are "cold". Exxon Mobil and Chevron have made clear that they will not follow the net zero emissions target, and will continue to work to reduce greenhouse gas emissions from their operations, although these emissions account for only 10% of fossil fuel pollution, according to the China Energy News.

Industry experts pointed out that from 2018 to 2020, European and American oil giant companies stepped out of different low-carbon development strategies: European oil companies chose low-carbon development strategies based on new energy business development and included investment budgets, while American oil companies chose to increase production efficiency to reduce emissions and did not invest in low-carbon energy budget.

It should be noted that external factors such as international oil prices will also interfere with low carbon development to a certain extent. If oil prices fall or will stimulate the use of oil products, increase the challenge of "zero carbon emissions"; low oil prices or impeding the commercialization of new energy technologies will affect investment enthusiasm of enterprises.

Giants meet difficulties

The road is long and the line is coming. Although the "zero carbon emissions" road is not easy, many international giants still choose to face difficulties.

In March 23rd and twenty-first Century, business reporter learned from the Rio Tinto Group of iron ore enterprises that after announcing the investment of 1 billion US dollars for carbon emission reduction projects, the group will hold further ESG (environmental, social and Governance) seminars in May this year, or announce the scope and details of the $1 billion investment.

At the end of February this year, Rio Tinto released the strategic report on climate change and announced that it will invest 1 billion US dollars in the next five years to carry out emission reduction projects. The goal of the group shows that its carbon emissions intensity will be reduced by 30% compared with 2018 by 2030, and the absolute emissions of carbon will be reduced by 15% compared with 2018, and the net zero emissions of operational operations will be achieved by 2050.

J-S Jacques, chief executive of Rio Tinto Group, said: "climate change is a global challenge that requires concerted action by countries, industries and society as a whole." (Hagers) New technologies, partnerships and effective government policies will be the key to achieving this goal. " In response, the group incorporated the above climate objectives into the performance objectives of the group's chief executive, linked to its short-term incentive plan (Bonus), and these requirements have also been included in the annual performance targets of relevant members and other executives at the Executive Committee.

"But there is no clear path in the world to ensure net zero emissions by 2050." Hagers also pointed out that the prospect of "net zero carbon emissions" is very clear, and the path is not clear. It needs to continue to focus on poverty alleviation and create wealth. At the same time, it is a complex trade-off to take action against climate change.

Compared with traditional energy and resource enterprises, new energy enterprises are expected to become the vanguard of "net zero carbon emissions".

In mid March, Longji group, a domestic PV Company, announced its accession to the RE100 green initiative, promising to realize 100% of the power needed for production and operation worldwide in the latest 2028.

The RE100 green initiative was launched by The Climate Group, which combined global enterprises such as apple, Google, Facebook, Coca-Cola, Microsoft, PHILPS and Goldman Sachs to accelerate zero carbon emissions from the global grid. The companies that join the RE100 must commit themselves to use green power no later than 2050. It is reported that wind power enterprise vision group and photovoltaic enterprise Jingke energy have joined the initiative.

Wang Yingge, assistant director of Longji Leye, told the twenty-first Century business news reporter that Longji shares have begun producing photovoltaic products in areas such as Yunnan and Malaysia, mainly in hydropower areas since 2016.

However, even the new energy enterprises are facing a real difficulty -- the power structure of the power grid is an objective factor that affects the power type of the power enterprises.

"We can buy green certificates and self built photovoltaic power stations to offset the non green electricity part of the power grid structure." In response, Wang Yingge said.

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