The 28th United Nations Climate Change Conference, better known as COP28, convened in Dubai, United Arab Emirates, from November 30 to December 12, 2023. This global gathering served as a crucial platform for nearly all nations to unite in confronting the escalating climate crisis.
At its core, COP28 focused on achieving the essential goal of limiting long-term global temperature increases to 1.5°C, a target established at the landmark 2015 COP21 conference in Paris and deemed critical by the Intergovernmental Panel on Climate Change (IPCC) to avoid the most catastrophic consequences of climate change. However, prior to the final COP28 agreement, concerns loomed, as current trajectories indicated Earth was headed for a worrying 2.7°C warming by 2100.
General Overview
Within the oil and gas industry, the Oil and Gas Decarbonization Charter (OGDC) marks a pivotal moment, signaling a newfound commitment to addressing climate concerns. Representing over 40% of global oil production, the charter boasts a staggering level of endorsement, with National Oil Companies (NOCs) comprising over 60% of signatories. This unprecedented engagement by NOCs signifies a sea change in decarbonization ambitions within the sector.
This widespread involvement indicates a hitherto unheard-of degree of NOC dedication to a decarbonization program. The sector’s goal of reaching net-zero carbon emissions by 2050, getting rid of methane emissions, and doing away with regular flaring by 2030 is in line with the COP28 President Dr. Sultan Al Jaber’s vision, which is reflected in the sector’s charter.
As suggested by Mohamed El Shafie, BD Director for Water and Renewable Energy, INCOME – IGI, “Decarbonization is an essential step in the path to creating a more sustainable and environmentally friendly oil and gas industry, especially when there is a lot of pressure on oil and gas companies to lower carbon emissions. COP28 is a great stepping stone to a greener future.”
Furthermore, the OGDC signatories have committed to acting decisively to lessen their carbon impact. Among the main pledges are to cease regular flaring by 2030, achieve net-zero operations by 2050, and significantly lower upstream methane emissions. Besides these goals, the charter promotes funding for negative emissions technology, low-carbon fuels, and renewable energy sources. Boosting measurement, tracking, reporting, and verification by third parties of greenhouse gas emissions is a critical component of improving transparency. These firms aim to reduce emission intensity by 2030 by implementing existing best practices, which are in line with larger sector standards.
With that, the goal of the OGDC is to change the way the industry operates, going beyond just lowering emissions. Engaging in low-carbon and renewable energy sources allows you to lead the energy innovation curve rather than merely complying with regulations. Businesses are encouraged under the charter to look beyond their conventional business models and investigate fresh approaches to long-term, sustainable growth. In addition, the OGDC offers proof of the effectiveness of teamwork in tackling global issues. It serves as a model for other businesses, showing how coordinated effort and thoughtful planning can have a big positive influence on the environment. It is anticipated that this program will have an impact on consumer behavior, investment choices, and regulatory frameworks, resulting in a more widespread transition to a low-carbon economy.
Oil and Gas Organisations’ Pledges
The signatories pledged to achieve near-zero upstream methane emissions, net-zero operations by 2050 at the latest, and the cessation of regular flaring by 2030. They concur to keep pursuing industry best practices for reducing emissions and to take other important steps, such as financing technologies that will enable zero emissions, low-carbon fuels, and renewable energy sources in the energy system of the future. This is also in addition to boosting measuring, tracking, reporting, and independent verification of greenhouse gas emissions, as well as their effectiveness and advancement in emission reduction, in order to increase transparency. Moreover, another goal is increasing adherence to more general industry best practices in order to hasten the decarbonization of operations and aim to put present-day standards into effect by 2030 in order to lower emission intensity as a whole. Finally, organizations have agreed to lowering the energy level of poverty and provide safe, reasonably priced energy to promote the growth of all economies.
Thus, the Oil and Gas Decarbonization Charter is more than just an industry accord; it offers a ray of optimism for the worldwide endeavour to tackle climate change. A more robust and sustainable energy sector is facilitated by the OGDC’s formulation of high goals and promotion of cooperation. Achieving the global climate targets and guaranteeing habitable earth for later generations will depend heavily on its achievement.
