Saudi Aramco, the world's largest oil company, has released its first sustainability report, outlining strategies to significantly reduce its carbon emissions. A key component of this plan includes utilizing 16 million carbon offset credits annually. This ambitious goal is part of Aramco's broader effort to achieve net zero Scope 1 and Scope 2 emissions by 2050.
Key Climate Goals and Strategies
Aramco's sustainability report highlights several interim targets to be achieved by 2035, including:
- Production of 11 million metric tons of blue ammonia per year by 2030
- Reduction of over 50 million metric tons of CO2 equivalent annually by 2035
- Achieving net zero Scope 1 and Scope 2 emissions from its assets by 2050
Reducing Emissions and Increasing Sustainable Capacity
Saudi Arabia, the largest oil exporter, has pledged to reach net zero emissions by 2060. Aramco, however, aims to achieve this goal a decade earlier. The company is accelerating its efforts to reduce greenhouse gas (GHG) emissions while simultaneously increasing its sustainable crude oil production capacity from 12 million barrels per day (b/d) to 13 million b/d by 2027.
In the report, Aramco’s Chairman Yasir al-Rumayyan emphasized the dual challenge of reducing emissions while meeting global energy demands:
"Reducing emissions from energy production and use, while at the same time satisfying the world’s growing energy requirements, is the biggest dual challenge facing our industry."
Interim Targets for Emission Reductions by 2035
Aramco's interim targets for 2035 include significant investments in various areas to achieve emissions reductions:
- Renewables Investment: 14 million metric tons of CO2 equivalent reduction per year
- Carbon Capture, Utilization, and Storage (CCUS): 11 million metric tons of CO2 equivalent reduction per year
- Energy Efficiency Improvements: 11 million metric tons of CO2 equivalent reduction per year
- Methane and Flaring Reduction: 1 million metric tons of CO2 equivalent reduction per year
- Carbon Credit Offsets: 16 million metric tons of CO2 equivalent mitigation per year
Reducing Upstream Carbon Intensity
Aramco aims to further reduce its upstream carbon intensity, already the lowest in the industry, by 15% from 10.2 kg CO2 equivalent per barrel of oil equivalent (boe) to 8.7 kg CO2e/boe by 2035. Although Scope 3 emissions (emissions from supply chain and customer use of products) have not yet been reported, the company is investing in hydrogen and renewable energy sources to help customers access lower-carbon products.
Developing the Blue Ammonia and Hydrogen Business
A significant focus in Aramco’s report is the development of its blue ammonia and hydrogen business. The company aims to produce up to 11 million metric tons of blue ammonia per year by 2030. This initiative supports emissions reductions in hard-to-abate sectors such as heavy-duty transport, heating, and industrial applications.
The Role of Carbon Offsets in Aramco's Net Zero Strategy
Aramco plans to invest in projects that produce up to 16 million carbon offsets annually by 2035. Carbon offsets are units of carbon credits that represent one metric ton of GHG emissions removed or avoided through various projects. By purchasing these offsets in the carbon market, Aramco can mitigate hard-to-abate emissions and accelerate its reduction efforts.
Exploring Natural Climate Solutions and the Riyadh Voluntary Exchange Platform
Aramco is also exploring natural climate solutions to generate carbon credits. The company has partnered with Saudi Arabia's Public Investment Fund to become the first member of the Riyadh Voluntary Exchange Platform, where carbon credits and offsets will be traded in the Middle East and North Africa (MENA) region. This MENA voluntary carbon market (VCM) is set to launch next year, tapping into the growing demand for carbon credits.
The Importance of Carbon Credits in Achieving Net Zero
Aramco's report underscores the vital role of carbon credits in its journey to reach net zero emissions by 2050. By leveraging these offsets, the company can effectively reduce its emissions and contribute to global sustainability efforts.
Aramco’s proactive approach to sustainability, highlighted by these ambitious targets and strategies, reflects its commitment to reducing its carbon footprint and supporting the global transition to cleaner energy sources.
CarbonUnits.com
