‘The math doesn’t yet add up.’ Net‑zero plans fall short

By David Iaconangelo | 09/24/2020 07:21 AM EDT

Major power utilities and oil and gas corporations are still well behind on actions needed to stay on track with the Paris climate accord, say new reports.

Major power utilities and oil and gas corporations are still well behind on actions needed to stay on track with the Paris climate accord, say new reports. Seagul/Pixabay

Many of the largest companies in the United States, including major energy firms, are not seriously planning to reduce carbon dioxide emissions or lack sufficiently detailed net-zero road maps, according to a trio of reports published this week.

Produced by environmentalists at Oil Change International and by consultants at Deloitte and EcoAct, the reports’ findings arrive amid a flurry of new corporate climate pledges.

But carbon-cutting plans from power utilities and oil and gas companies remain out of line with the Paris climate agreement’s goal of limiting global warming to 1.5 degrees Celsius, the reports suggest.


Of the 55 major investor-owned utilities that serve electricity customers in the United States, for example, just 22 have drawn up net-zero or carbon-free plans, according to Deloitte.

Among those 22 companies, the consultancy wrote, "significant gaps" exist between their net-zero targets and their plans to retire fossil fuel plants, add renewables and prepare the grid for a clean energy transition.

"The math doesn’t yet add up," wrote staff at Deloitte.

Some of the companies haven’t set timelines for coal retirements — the "low-hanging fruit for decarbonization," Deloitte said — and most are planning to grow natural gas fleets, pinning hopes on carbon capture and other clean energy technologies to emerge in the 2030-40 time frame.

Still, climate commitments have turned corporations into major sources of wind and solar growth in the United States, even as the Trump administration has rolled back emissions regulations and pledged to back out of the Paris accord.

Walmart Inc., the world’s biggest retailer, announced this week that it would cancel out its CO2 emissions by 2040. Morgan Stanley unveiled a similar target for 2050, making it the first major bank with a net-zero goal (Greenwire, Sept. 21).

But in the oil and gas industry, net-zero goals laid out by several major European companies contain gaping holes, like the exclusion of CO2 emissions produced by joint ventures and projects in certain jurisdictions, wrote environmentalists at Oil Change International in a report released this morning.

"[E]ven those companies leading the pack are far off course from matching the Paris Agreement’s ambition," they said.

Getting on track, the report added, would require ending investments in new oil fields as well as "accelerating the phase-out of some existing production."

"The industry has already invested in producing more fossil fuels than we can afford to burn," Oil Change said.

Spokespeople at the American Petroleum Institute responded by pointing to International Energy Agency scenarios that would retain oil and gas as a prominent means of meeting global energy demand as late as 2040.

"The natural gas and oil industry will continue to play a foundational role in the global energy mix for decades to come while enabling investments in renewables," wrote Aaron Padilla, the group’s manager of climate and environmental, social and governance policy, in an email to E&E News.

Inching toward net zero

Just 30% of the companies listed in the Dow Jones Industrial Average index, which includes many of the biggest corporations in the United States, had committed to carbon neutrality by 2050, according to the report by the EcoAct consultancy.

That marks a considerable increase over last year, when 10% of companies had similar goals in place. But many of those with net-zero targets still lack "a clearly defined strategy," EcoAct found.

Entering virtual power purchase deals for renewable electricity tended to be an easy step for many corporations, said William Theisen, EcoAct’s chief executive for North America. "They can understand it. It makes sense to everybody."

But corporations often shied away from deeper decarbonization strategies, according to EcoAct, including the thorny issue of curbing emissions throughout a company’s supply chain.

A U.N.-backed initiative that drafts sector-specific plans for decarbonization is likely to help companies fill out the details of net-zero plans and encourage others to follow, said Theisen. "Companies just want to be told what’s credible," he said.

"We’re all just waiting on pins and needles as to, what are the agreements going to be like to drive us into the next five years, 10 years? What is the direction we all need to go?" he added.

This story also appears in Climatewire.