“Will it contribute to the climate crisis” or be “part of the solution?” The oil and gas industry will have to make “tough decisions now” to accelerate its transition to clean energy sources and reduce its emissions, the International Energy Agency has stressed a week ahead of COP28.

It will have to “choose between contributing to the worsening climate crisis or being part of the solution by adopting the clean energy path,” the ILO says in a “special report” dedicated to the fossil fuel industry in the energy crisis. transition.

“Within a context of worsening climate crisis, which is largely fueled by their basic products“, ILO experts outline what businesses must do to ensure their operations are in line with the most ambitious goal of the Paris Climate Agreement, limiting global warming to 1.5 degrees Celsius compared to pre-industrial levels.

To follow this path, producers should devote 50% of their spending on clean energy investments by 2030, over and above the amounts they need to spend to reduce their own greenhouse gas emissions, i.e. those due to their own activities.

The road is long: in 2022, they invested around 20 billion dollars (18.3 billion euros) in clean energy, just 2.5% of their total investment costs, the IOC clarifies a week before the start of work COP28 in Dubai heralds a battle between nations over the future of fossil fuels.

“At COP28 in Dubai it will be the hour of truth for the oil and gas industry“, summarized Fatih Birol, the head of the International Energy Agency during the presentation of the report.

The domain should “to make difficult decisions now“, he insisted, as this year oil groups such as BP and Shell, and yesterday, Wednesday, Enel, announced a downward revision of some of their energy transition targets.

“If governments stand idly by and allow every oil company to try to be the last one standing, we all lose“, responded Kaisa Kosonen, policy coordinator at Greenpeace International.

Radical change

To achieve carbon neutrality by 2050, which is a prerequisite for the 1.5 degree Celsius target to remain achievable, the ILO estimates that oil and natural gas consumption should be reduced by over 75% in this time horizon, which requires a significant development of renewable energy sources to achieve.

In this scenario”the decline in demand is large enough that there is no need for any new conventional long-term oil or gas plans“, points out the IOC, recalling one of its recommendations in 2021 that had caused a lot of noise.

Windows of opportunity are opening for the sector, but this requires a “radical change” in investment.

These companies have undoubtedly doubled their investments in clean energy by 2022, but they still represent only 1.2% of all global investments in favor of decarbonisation. And 60% rests only on the “big four” (Equinor, TotalEnergies, Shell, BP), who each dedicated around “15-25%” of their investments to the transition.

However, the IOC’s demand is not limited to the private giants –“the big ones“– which account for less than 13% of the world’s production and reserves of natural gas and oil. It also refers to the powerful national companies that are fully or partially owned by states.

The fight to combat climate change is recommended, moreover, according to Fatih Birol, to “get rid of the illusion that the solution is to sequester incredibly high amounts of carbon“, at a time when criticism is growing for these technologies that are very popular in the oil industry and promise to capture CO2 from the atmosphere and store it.

According to the ILO, it is mainly the companies themselves who need to clean up their own backyard to be able to reduce emissions from their own activities by 60% by 2030.

““Each company’s transition strategy can and should include a plan to reduce emissions from its own operations,” the ILO notes. sector–, which could be implemented at low cost“.

The production, transportation and processing of oil and natural gas account for nearly 15% of global energy-related emissions, with the rest due to the burning of fossil fuels by vehicles or for heating.