OGDC’s inaugural survey: progress made with emission cuts, but more work needed on reporting

The Oil & Gas Decarbonization Charter (OGDC) platform has published its first baseline report relating to priority areas for greenhouse gas (GHG) emissions reduction and the progress its signatories achieved in meeting their commitments.

The OGDC’s Baseline Report was published on the first day of the 29th session of the Conference of the Parties (COP29) to the UN Framework Convention on Climate Change taking place November 11–22 in Baku, Azerbaijan. The report is perceived as a key milestone for the decarbonization initiative, setting out the work achieved in its first year.

It is meant to assist in prioritizing and tracking progress on emissions reductions made by the 54 oil and gas companies – representing almost 45% of the global oil production, that signed up to the Charter’s ambitions at last year’s COP28 in the UAE.

By joining the Charter, oil and gas companies agreed to work toward net-zero operations by 2050, near-zero upstream methane emissions, and zero routine flaring by 2030 in addition to measuring and publicly reporting progress towards meeting OGDC’s goals. Additionally, the signatories recognized the need to report on progress and collaborate on reducing scope 1 and 2 emissions and share environmental best practices.

“We are proud of the 54 companies that have already signed up to the Charter and are encouraged by the extent of their engagement in this first major piece of work that helps to establish a base on which to build future success,” OGDC’s three founding members – Abu Dhabi National Oil Company (ADNOC) CEO Sultan Al Jaber, Aramco CEO Amin Nasser, and TotalEnergies Chairman and CEO Patrick Pouyanné – said in a joint statement.

In the past 12 months, OGDC has established a governance framework and launched a survey to determine signatories’ emissions reduction ambitions and implementation plans to set a baseline to track future progress.

A collaborate and share program was launched to disseminate solutions, enhance peer-to-peer collaboration, and promote the adoption of best practices to cut emissions. Three new members – Oil India Limited, PetroChina in July, and Vår Energi – have joined the initiative.

“Each company is at a different phase of the decarbonization journey. For some, the Charter reflects existing commitments and aligns with pledges already made via other initiatives. For others, it marks their first steps toward climate action,” the CEOs said.

“The diverse nature of our signatories is an opportunity as well as a challenge. Each company brings different experiences, capabilities, stakeholders and national circumstances. Signatories will have the opportunity to learn from the best practices and insights of peers from a wide range of backgrounds and from across the globe.”

As stated in the report, the majority of signatories are in line with the Charter’s ambitions for net zero operations by 2050, and goals to reduce methane emissions to near zero and eliminate flaring by 2030. Gaps identified in the survey are meant to help prioritize support and knowledge transfer from companies with relevant experience.

Furthermore, it was established that most signatories already report on their greenhouse gas emissions, however, there is a need for common standards and methodologies to establish a robust reporting framework for the group.

The survey found that the majority of signatories are already investing in the energy systems of the future, including renewable energy, energy storage, low-carbon fuels, hydrogen, methane abatement, carbon capture utilization and storage (CCUS), and carbon removal technologies, and plan to increase investments.

Deploying these methods and technologies is precisely what McKinsey & Company believes is the solution for bridging the divide between net-zero ambition and reality, according to its latest research presented in ‘The energy transition: Where are we, really?’

“A survey of oil and gas industry climate performance has never been attempted on this scale. Participants ranged from companies that pioneered decarbonization decades ago to those still in the early phases – all with different capabilities and reporting methods. The lessons learned will be used to improve reporting visibility and data quality and to create more targeted programs,” said Bjorn Otto Sverdrup, the head of the OGDC Secretariat.

The survey is envisaged to lay the groundwork for the collective efforts ahead. Over the next year, OGDC intends to focus on providing the resources and guidance the signatories need to reduce their GHG emissions, methane emissions, and flaring. Additionally, signatories will receive guidance for shaping their net-zero agendas and developing emissions reporting to ensure progress can be tracked and to demonstrate how collective action can lead to positive climate outcomes worldwide.

Following in the footsteps of the previous COP, a new climate initiative was launched at COP29. More than 50 leaders across the spectrum of the shipping value chain, including e-fuel producers, vessel and cargo owners, ports, and equipment manufacturers, signed a call to action to accelerate the adoption of zero-emission fuels.