The likelihood of the world reaching net-zero carbon dioxide emissions by 2050 is remote, Exxon said in a U.S. Securities and Exchange Commission communication.
The IEA’s 2050 Net Zero Emissions does not “meet the level of likelihood required to be considered in our financial statements,” Exxon said, adding that the world is not on its way toward achieving net zero by 2050. Exxon also cautioned that cutting energy production to levels that fall below consumption would push energy prices higher, like in Europe.
The IEA has said that all new oil exploration would have to have stopped in 2021 in order to reach the 2050 target, and countries would have to ditch fossil fuels in favor of renewables.
It is highly unlikely that society would accept the degradation in global standard of living required to permanently achieve a scenario like the IEA NZE,” Exxon said, pointing out that by the IEA’s own assessment, Net Zero 2050 is unlikely.
The statements were made in response to an Exxon shareholder proposal that would request a report on how much it would cost to abandon projects. The proposal is set to be voted on at the end of this month.
The requested report clearly would not provide new, decision-useful information,” Exxon said.
The proposal is also asking for Exxon to evaluate the ramifications of a worst-case oil spill offshore Guyana.
Despite the pushback from Exxon on the shareholder proposal and the IEA’s zeal for its Net Zero scenario, Exxon’s CEO Darren Woods said in March that the company’s Low Carbon business has the potential to outperform its legacy oil and natural gas business within a decade, generating hundreds of billions in revenues.
Nevertheless, ExxonMobil scrapped its biofuels project in the same month due to the project’s lack of economic viability.
By Julianne Geiger for Oilprice.com
