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Equinor sets ambition to reach net zero emissions by 2050
Anders Opedal, who took over as Chief Executive Officer (CEO) and President of Equinor on 2 November 2020, has unveiled the company’s ambition to become a net zero energy company by 2050. This includes emissions from production and final consumption of energy.
‘Equinor is committed to being a leader in the energy transition,’ he said. ‘It is a sound business strategy to ensure long-term competitiveness during a period of profound changes in the energy systems as society moves towards net zero. Over the coming months, we will update our strategy to continue to create value for our shareholders and to realise this ambition.’
Earlier this year, Equinor announced its plans to achieve carbon neutral global operations by 2030 and to reduce absolute greenhouse gas (GHG) emissions in Norway to near zero by 2050. At the same time, Equinor outlined a value-driven strategy for significant growth within renewables, as well as a new net carbon intensity ambition. Continuing to deliver on the short and mid-term ambitions will be key to achieving net zero emissions.
Equinor expects to deliver an average annual oil and gas production growth of around 3% from 2019 to 2026. The company is well positioned, with world-class global assets in attractive areas with substantial value creation potential. By optimising its portfolio ‘through financial discipline and prioritisation’, Equinor plans to ‘continue to develop competitive and resilient projects whilst maintaining industry-leading recovery rates, unit costs and carbon efficiency’. The company also reports that its net zero ambition will ‘strengthen future competitiveness and value creation at the Norwegian Continental Shelf (NCS)’ and that its plans for production, development and exploration at the NCS ‘remain firm’.
Equinor reports that it is preparing for an expected gradual decline in global demand for oil and gas from around 2030 onwards. ‘Value creation, not volume replacement, is and will be guiding decisions’, it says. In the longer term, the company expects to produce less oil and gas than today.
To develop Equinor as a broad energy company, renewables will be a significant growth area. The company has previously set ambitions for profitable growth within renewables and expects a production capacity of 4–6 GW by 2026 and 12–16 GW by 2035. Equinor now plans to expand its acquisition of wind acreage, with the aim of accelerating profitable growth and will continue to leverage its leading position in offshore wind. Equinor will establish renewables as a separate reporting segment from 1Q2020.
To achieve net zero emissions requires a well-functioning market for carbon capture and storage (CCS) and natural sinks, says Equinor, as well as the development of competitive technologies for hydrogen. The company also assumes that an increasing share of oil and gas will be used for petrochemicals towards 2050.
‘Climate change is a shared challenge. The combined efforts of governments, industries, investors and consumers are crucial to reaching net zero emissions, for Equinor and for society. Together, we can overcome technological and commercial challenges, cut emissions, and develop CCS and zero emission value chains for a net zero future,’ says Opedal.
Equinor expects to present an updated strategy at its Capital Markets Day in June 2021.
The company’s net zero ambition covers scope 1 and 2 GHG emissions (operated basis 100%) and scope 3 GHG emissions (use of products, equity share).
Anders Opedal, CEO and President, Equinor
Photo: Equinor/Ole Jorgen Bratland