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Exxon discloses Scope 3 greenhouse gas emissions data for 1st time

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Essential Energy Insights - January 2021


Exxon discloses Scope 3 greenhouse gas emissions data for 1st time

For the first time ever, U.S. oil supermajor Exxon Mobil Corp. disclosed greenhouse gas emissions data related to customer use of its petroleum products.

In its "2021 Energy and Carbon Summary," Exxon said Jan. 5 that estimated Scope 3 emissions from its crude oil and natural gas production totaled 570 million tonnes of CO2 equivalent in 2019. The company said it will provide Scope 3 emissions data reports each year.

The Texas-based oil major cautioned that because emissions of this type are indirect and result from the consumption and use of a company's products outside of the company's control, "Scope 3 emissions do not provide meaningful insight into the company's emission-reduction performance and could be misleading in some respects." For example, Scope 3 emissions data for increased natural gas sales would not show an offsetting reduction in the amount of coal burned for power generation, Exxon noted.

Exxon reported that its 2019 direct emissions from owned or controlled operations, or Scope 1 and 2 emissions, were 120 million tonnes of CO2 equivalent.

Exxon's emissions disclosures followed ramped up investor pressure for more information. Exxon announced in December 2020 that it would reduce the intensity of its Scope 1 emissions by 15% to 20% by 2025, compared to 2016 levels. However, analysts said the targets were too soft since they did not account for Scope 3 emissions. Scope 3 emissions can comprise as much as 85% of a major oil and gas company's total emissions.

Intensity-based targets measure the amount of emissions released into the atmosphere relative to a company's energy production. A company could maintain or even increase upstream production and still hit carbon intensity targets by adding low-carbon alternatives such as solar and wind to its portfolio, critics have said.