Our new report on the climate ambitions of oil companies in Europe, commissioned by Greenpeace (Vienna).
Executive Summary
1. What contribution does Big Oil make to the energy transition and to curbing climate emissions? After the record year of 2022, in which many oil companies reported the highest profits in their history, this question has become particularly relevant.
2. This study examines in detail the balance sheets and activities of 12 oil companies in Europe.
Among them are 6 of the largest oil companies worldwide (Shell, TotalEnergies, BP, Equinor, Eni, Repsol) and 6 oil companies that play a central role in the energy transition in their European home markets (OMV, PKN Orlen, MOL Group, Wintershall Dea, Petrol Group, Ina Croatia).
Part A of the study presents the key findings. Part B contains short portraits, facts and figures for each of the 12 sample companies studied.
3. The analysis shows that profits increased by an average of 75% in 2022, revenues by 70%. Investments climbed just by 37%.
4. There was a one-sided fossil dominance of investments in 2022: 92.7% on average were invested in the continuation of the fossil oil and gas path and only 7.3% in a change towards sustainable energy production and low-carbon solutions.
5. The energy supply remained even more one-sided. Contrary to public perception, wind and solar power production by big oil companies is still surprisingly low. On average, of the 12 companies, only 0.3% of the energy volume is accounted for by their renewable electricity production and 99.7% by their oil and gas production.
6. Sustainable priorities are also not discernible in the coming years. Oil companies are focusing their strategic planning primarily on CCS and on carbon offsets, i.e. very controversial approaches whose effectiveness in reducing emissions is doubtful. Two companies are shifting their business model from fuels to petrochemicals. The remaining companies do not present any transparent climate strategy at all.
7. Other options such as advanced biofuels, green hydrogen or other green gases are frequently mentioned, but the provision is largely left to other industries. There is mostly talk of sales targets, but rarely of production targets or concrete investment volumes. Plus: All options are ultimately intended to serve the extension of their own fossil fuel business model.
8. A far-reaching reduction of emissions is not possible on this path. Although most of the sample companies are committed to „net zero“ by 2050, a closer look shows that none of them has developed a coherent strategy to achieve this.
9. Most of the companies in the sample are therefore scaling back their ambitions. In several cases, only production-related emissions are to be gradually reduced (Scope 1+2) and residual emissions offset by CCS or carbon offsets.
10. In most cases, the emissions resulting from the sale of oil and gas (Scope 3) are ignored or redefined: instead of reducing the emission quantities, only the emissions per production unit (barrel of oil, cubic metre of natural gas), i.e. the emission intensity, are to be reduced. Shell, TotalEnergies and Equinor rely particularly heavily on this evasive definition.
11. This approach is further exacerbated by postponing most of the decarbonisation efforts until after 2030. This is not unexpected, as the vast majority of oil companies plan to stabilise or even grow their oil and gas production at least until 2030.
12. The result is an ever-widening gap between PR claims and the reality of the companies. This gap is closed by a multifaceted and imaginative greenwashing in company reports. Our study lists countless examples of this: misleading definitions of terms and numbers, deliberately misleading presentation of results, hiding of important information in footnotes, and even an almost comical visual presentation of the focus of company activities.
13. What follows from this? Meanwhile, the oil industry has a 50-year history of covering up climate change problems and a more than 100-year history of environmental and climate damages caused by fossil oil and gas. Even today, massive lobbying is used to block or at least water down climate policy initiatives.
14. A long corporate history has produced a mindset which appears unable or unwilling to face the challenges of today’s climate crisis. Most major shareholders, i.e. mainly institutional investors, are not even interested in a transformation since the energy world is mapped via their portfolio of assets, in which oil companies play a predetermined role as reliable profit machines and sources of high dividend payments.
15. Overall, it is therefore not likely that IOCs will become protagonists or neutral bystanders of the global energy transition and climate protection.
Similar to the coal sector, the focus should therefore be on a rapid economic and political downsizing of the industry, on skimming profits, avoiding stranded assets and, above all, on a rapid reduction of oil and gas demand.