Brazil's Petrobras is the latest state-run oil company to commit to becoming carbon neutral, in line with the 12-member global Oil and Gas Climate Initiative, of which the firm is a member.
The carbon-neutral target applies to its scope 1 and 2 operations, which include greenhouse gas (GHG) emissions from company-owned and controlled operations as well as indirect emissions from energy purchases from third parties. Petrobras also pledged to work with its partners in non-operated areas to help them reduce emissions. The goal will be met "in a timeframe compatible with that established by the Paris [climate] agreement", Petrobras says.
The firm says it has boosted carbon efficiency in exploration and production by 47pc over the past 11 years. It is targeting a 25pc reduction in emissions by 2030, according to its 2020 sustainability report released in April. Petrobras committed to investing $1bn to reduce its carbon footprint in 2021-25 in its most recent five-year plan, issued in November. The net zero commitment comes amid growing pressure on firms to step up verifiable commitments ahead of the Cop 26 climate conference in Glasgow, Scotland, in November.
Petrobras' public-private ownership structure puts it under more scrutiny than many other national oil firms. Some of its shares trade on the New York stock exchange. By the end of this year, US securities regulator the SEC aims to vote on a proposal to require publicly traded companies to disclose their climate risks, including potentially all of their direct and indirect GHG emissions.
One of the main mechanisms that Petrobras plans to use to reduce its carbon footprint is increased CO2 injection. The goal is to capture and store 40mn t of CO2 by 2025, which the firm says is equal to 18pc of global carbon capture and storage. It reinjected 7mn t of CO2 last year. The company is also testing a system that would separate and reinject CO2 at the wellhead, which would significantly reduce . Petrobras has also promised to eliminate gas flaring by 2030 at its offshore platforms. And it will seek to maximise the use of electric energy at its platforms, which it says will reduce emissions from them by up to 20pc.
Biofuel push
Downstream, the firm is targeting a 16pc reduction in its carbon intensity to 2025 and a 30pc fall by 2030. It also plans to produce more advanced biofuels, including biojet fuel and green diesel. While Petrobras has divested conventional biofuel assets, it is evaluating investments in greenfield biokerosine projects, as well as the construction of dedicated co-processed green diesel refineries.
The company last year concluded refinery tests on its patented hydrotreated vegetable oil (HVO) production technology. The co-processed fuel uses up to 10pc vegetable oils to produce a drop-in fuel that is chemically identical to petroleum diesel. Petrobras' HVO diesel reduces emissions by 70pc compared with conventional diesel and by 15pc compared with biodiesel, company data show.
Colombia's state-controlled Ecopetrol led the pack of Latin American oil firms with its March pledge to reach net zero emissions by 2050. It aims to reduce its CO2 emissions — scopes 1 and 2 — by a quarter from 2019, and halve them by 2050. Key features are forestry-related programmes, renewable energy with storage, and carbon sequestration. The firm plans to install a pilot green hydrogen plant in 2022 to test production and application of the fuel at its 165,000 b/d Cartagena refinery on the Caribbean. But Ecopetrol is not abandoning the oil business. It is conducting a pilot hydraulic fracturing project in central Colombia, with the hope of boosting its flagging oil and natural gas reserves base.
