The energy transition was top of the agenda on Day 3 and 4 of COP28: oil and gas firms unveiled an underwhelming decarbonisation commitment, and more than 110 countries signed a pledge to triple renewable energy capacity by 2030.
For companies and their Chief Sustainability Officers who had been calling for a phase-out of fossil fuels, the oil and gas decarbonisation charter announced on Saturday will likely be disappointing, since it does not include a reduction in output.
But the commitment by many countries to scale up renewable energy investments and create policies to strengthen energy efficiency is set to clean up carbon-intensive grids and provide attractive market conditions for renewable power purchase agreements – supporting corporate decarbonisation efforts to transition away from fossil fuels.
COP28 oil and gas decarbonisation charter
One of COP28 President Sultan Al-Jaber’s headline promises as the head of Abu Dhabi’s National Oil and Company (ADNOC) was that he would rally the sector behind the world’s net zero ambition. On December 2, he unveiled an Oil and Gas Decarbonisation Charter signed by 50 companies, calling it “a great first step” while admitting that the industry “can and needs to do more”.
The charter includes three commitments: achieving net zero operational emissions by 2050, ending routine flaring by 2030 and reaching “near-zero” upstream methane emissions. Additionally, signatories have agreed to invest in low-carbon energy technologies, increase emissions transparency and improve energy security. It was welcomed by the Oil and Gas Climate Initiative (OGCI), whose 12 members are already committed to these goals.
But to observers from outside the industry, the agreement misses the most important point: “The pledge doesn’t cover a drop of the fuel they sell, which accounts for up to 95% of the oil and gas industry’s contribution to the climate crisis. Ignoring emissions from the fossil fuels that companies sell is like a cigarette maker claiming no responsibility for the impact of their product once it leaves the factory door,” said Melanie Robinson, Global Climate Program Director at the World Resources Institute (WRI).
The charter was immediately criticised, including by UN Secretary-General Antonio Guterres, who said the sector’s ambitions “clearly fall short of what is required”, since they do not address emissions from fossil fuel consumption.
Insufficient voluntary commitments
“This charter is proof that voluntary commitments from the oil and gas industry will never foster the level of ambition necessary to tackle the climate crisis. We can’t meet our climate goals unless governments set policies that rapidly and equitably transition our economy away from fossil fuels,” added Robinson.
While this is a disappointing outcome, other COP28 developments may help spur the industry in the right direction. Colombia, a large fossil fuel producer, joined a bloc of 10 nation-states pushing for a Fossil Fuel Non-Proliferation Treaty, which would block all new exploration projects, saying what may look like “economic suicide” is actually a way to “avoid omnicide” – the risk of extinction of all life on the planet.
And Brazil, which will host COP30 two years from now, has vowed to engage with other oil-producing countries as part of OPEC+ to push for a reduction in fossil fuels (though its state-owned oil company Petrobras has said it would not accept production caps).
COP28 Global Pledge on Renewables
On the same day, 118 countries signed the EU-led Global Pledge on Renewables and Energy Efficiency, committing to triple the installed capacity of renewable energy to at least 11 terawatts (TW) and to double the rate of global energy efficiency improvements from roughly 2% to an annual figure of 4%, by 2030 – two targets described by the International Agency as “single most important lever” to reduce energy emissions.
The pledge includes commitments towards expanding financial support for scaling renewable energy and energy efficiency programs in emerging markets and developing economies, and the EU has already announced €2.3 billion of support. It also talks about “accelerating cross-border grid interconnections”, an often overlooked aspect of energy decarbonisation that could save US$3 trillion in the net zero transition.
“The widespread support for this declaration demonstrates that renewable energy has moved from the sidelines to centre stage. Tripling annual renewable energy capacity over the next six years would be the single largest step the world can take toward achieving our global climate goals,” said Jennifer Layke, WRI Global Energy Director.
The pledge calls for the “phase-down of unabated coal power”, and was signed by some of the world’s biggest users of coal, such as South Africa. This is good news for companies that have struggled to decarbonise operations in these countries, such as NTT, whose Chief Sustainability Officer Nicky Bullivant talked about this challenge in an October interview with CSO Futures.
“No one can opt out” of the energy transition
Several countries will now be pushing to include this pledge in the final COP28 summit agreement, which would require convincing almost 80 more countries, including China and India, to commit to the goals.
For Layke, “all countries need to be part of the energy transition – no one can opt out”. But she adds that ramping up renewable energy and improving efficiency alone cannot address the climate crisis: “At COP28, it is crucial for all countries to also commit to rapidly and equitably transition away from fossil fuels, and action must be taken on energy efficiency, transport, and industry.”
The renewable pledge itself includes little wording around fossil fuels beyond coal, simply stating that it aims to “propel the global move towards energy systems free of unabated fossil fuels well ahead of and by mid-century at the latest”.