The host of the UN climate summit urges oil producers to make an early agreement.

The host of the UN climate summit urges oil producers to make an early agreement.

According to documents acquired by POLITICO, the United Arab Emirates is utilizing its influence as an oil producer and host of the upcoming United Nations climate negotiations to urge certain highly secretive government-owned oil companies to decrease their emissions of greenhouse gases.

The upcoming COP28 negotiations in Dubai will feature a major announcement known as the Global Decarbonization Alliance. This effort aims to make a big impact and will be presented as a separate deal alongside the main conference. It will not be part of the official diplomatic text aimed at addressing climate change, which is being worked on by representatives from almost 200 countries.

However, environmentalists have rejected the proposed solution put forth by Sultan al-Jaber, the leader of this year’s climate discussions and head of UAE’s national oil company. They have expressed concerns about his suggestion to use funds from the industry to improve petroleum production instead of swiftly transitioning away from fossil fuels.

The supporters of the initiative aim to engage in discussions with national oil companies, such as Saudi Aramco and Colombia’s Ecopetrol, about reducing greenhouse gas emissions. It is crucial for these companies, responsible for half of the world’s crude oil production and possessing 90% of the world’s oil and gas reserves, to take decisive measures in order to prevent temperatures from rising more than 1.5 degrees Celsius above pre-industrial levels.

Mark Brownstein, senior vice president of energy at the Environmental Defense Fund and participant in talks on the Global Decarbonization Alliance, stated that national oil companies have not been actively involved thus far. He also noted that the COP presidency is showing a strong interest in this issue, but it remains uncertain if the industry will take action.

POLITICO has examined the specifics of the plan, which entails a broad range of obligations that the UAE’s COP28 team is urging national oil companies and other investor-owned companies to support. This includes backing the Paris climate agreement’s commitment to limit temperature increase to 2 degrees Celsius, with an ambitious target of 1.5 degrees Celsius. Companies who sign the pledge would agree to invest in renewable energy and low-carbon technology such as carbon capture, although specific targets are not mentioned.

The Global Decarbonization Alliance would mandate that companies pledge to achieve “near-zero” methane emissions and strive to decrease routine flaring of methane by 2030. This could have a significant impact on mitigating global warming, as methane is much more potent than carbon dioxide in trapping heat, with a potency 86 times greater over a span of 20 years.

Four individuals who examined the material of the document stated that it is feasible that the particulars have been altered as the conversations have advanced.

Advocates argue that this initiative would greatly enhance the visibility of the activities of national oil companies, which are often the backbone of their respective economies. Additionally, they believe it would motivate these companies to adopt more environmentally-friendly practices, as they would be subject to public and global scrutiny, something they rarely encounter in their sheltered domestic markets.

The spokesperson for COP28 declined to provide a statement regarding the document examined by POLITICO, but did confirm that 20 companies, including both national and investor-owned ones, have committed to the pledge.

The spokesperson for the COP28 Presidency has urged all IOCs and NOCs to increase their efforts and work towards achieving net zero emissions by 2050 or earlier, reduce methane emissions to zero, and stop the practice of routine flaring by the end of the decade. This is a crucial part of the COP28 President’s Action Agenda, which aims to accelerate a fair and organized shift towards clean energy. It also emphasizes the need to disrupt traditional practices and transition towards a low-carbon energy system while simultaneously developing sustainable solutions for the future.

However, numerous climate advocates rejected the variety of promises outlined in the paper as just another unenthusiastic display of the oil and gas sector attempting to appear environmentally friendly.

According to critics, the UAE’s proposed climate targets are redundant as many major oil and gas companies have already set more ambitious goals. They also argue that the proposed framework duplicates existing ones with stricter reporting standards. The emerging pact is being criticized for only requiring companies to achieve net-zero emissions at their own facilities, while neglecting the emissions from the production and sale of oil and gas, which is responsible for the majority of the industry’s contribution to global warming.

David Waskow, director of the World Resources Institute’s international climate initiative, described it as a significant and obvious issue. He also stated that achieving net-zero in one’s own operations by 2050 is not particularly impressive.

In contrast to larger corporations such as BP and ExxonMobil, which face pressure from shareholders and governments to decrease emissions, there are limited methods available for the public to influence national oil companies in many countries. These companies are protected from domestic competition and prioritize increasing production to generate profits for the government.

Many climate advocates are skeptical of national companies due to their lack of transparency. In 2021, only 28 out of 72 national oil companies provided verifiable production data, according to researchers from the Natural Resource Governance Institute. Most companies do not disclose information about their emissions.

The Global Decarbonization Alliance document states its intention to track, monitor, publicly report, and independently verify greenhouse gas emissions, but it does not explicitly state that these actions are mandatory.

There is a lot of doubt surrounding the proposal because it is being promoted by the UAE and al-Jaber. Critics argue that he may not be able to fairly oversee the talks as he also serves as the head of Abu Dhabi National Oil Co. (ADNOC), the national oil company of the United Arab Emirates.

Al-Jaber has implemented some green initiatives at the company — he has set ADNOC goals to eliminate emissions of the potent greenhouse gas methane by 2030 and to hit net-zero emissions by 2045. But the company also plans to spend $150 billion expanding oil and gas capacity in a country that already is the world’s seventh-largest producer of those fuels.

The Global Decarbonization Alliance advocates for the expansion of both renewable energy and oil and gas production. This includes reducing emissions intensity, but not absolute emissions, potentially resulting in overall production growth and increased greenhouse gas emissions. However, the alliance does not include goals for increasing investment in renewable energy, despite pressure from environmental activists.

Alden Meyer, a senior associate at the environmental think tank E3G, stated that there has been no reassessment of the oil and gas expansion and that a solution must be found. He also mentioned the challenge of creating a credible initiative that receives support from producers in the Global Decarbonization Alliance.

Al-Jaber has presented his simultaneous roles as the leader of the negotiations and ADNOC in a favorable light. He has positioned himself as a distinct figure, advocating for climate action while also being a part of the traditional realm of national oil companies.

The speaker, Al-Jaber, has addressed attendees at various conferences, including OPEC and ADIPEC, which is a forum for national oil companies hosted by Abu Dhabi last month. He stated that it is inevitable that the world will decrease its reliance on fossil fuels.

Landon Derentz, the senior director and Morningstar Chair for Global Energy Security at the Atlantic Council, stated that the proposed alliance among oil producers would be the first of its kind.

He stated that the industry has not taken a consistent approach to addressing climate emissions. He believes that this new measure will establish a regular practice for addressing the issue.