OPINION: Eni's pledge to cut back oil output from 2025 and reduce its net greenhouse gases by 80% by 2050 has raised the bar for rivals.
The Italian major importantly includes Scope 3 emissions — those generated by its suppliers and end users — in its carbon-reduction targets.
This increases Eni's clean-energy credentials. Companies such as Repsol and BP have each put 2050 as their net-zero carbon target date, but have been vague about the extent of their Scope 3 strategies.
A big fear for oil and gas companies is that the capital markets that they rely on for financing will start to shun them.
JP Morgan Chase has ruled out lending for drilling in the environmentally sensitive Arctic.
So far, oil companies' promises to help with the energy transition to a low-carbon world have been met with a mixture of applause and scepticism.
Analysts at Citi have expressed concern that oil companies are making promises they will find hard to keep.
New BP chief executive Bernard Looney recently pledged to align the UK supermajor with the demands of the Paris climate change agreement, but gave few details about how that transition would happen — albeit promising he would reveal more in September.
Certainly companies are presuming they will be able to profitably wind down their oil businesses but ramp up gas production.
“Gas is the only hydrocarbon that (we) will grow to 2050,” said Eni chief executive Claudio Descalzi when outlining the company’s plans last week.
Of course, some climate campaigners and even carbon think tanks want all fossil fuels phased out almost immediately.
Is that possible? Clearly not, but Australian wildfires, UK floods and melting Antarctic ice are putting urgency — if not panic — into the public debate around the climate.
Previous foot-dragging by the industry over accepting the need for change has badly undermined trust, as Looney accepted in a speech at the recent International Petroleum Week (IP Week) conference in London.
The fact that ExxonMobil and other major US oil corporations are keeping a lower profile on carbon issues needs to change.
Organisations such as the American Petroleum Institute also need to sharpen up even as US President Donald Trump is happy to ignore climate concerns.
The industry needs to move on from making broad-brush commitments and start taking steps that demonstrate commitment.
Repsol showed the way last week by unveiling plans for a new wind farm in Aragon, in northern Spain.
But oil and gas companies urgently need to develop industry-wide standards on many issues, not least Scope 3 emissions. The World Bank has one standard, but its definition is loose.
As Descalzi himself admitted: “Our absolute [greenhouse gas] emissions cannot be compared with other methodologies.”
The industry needs to move on from making broad-brush commitments.
Shell used IP Week to also call for industry, trade associations and all stakeholders to find common ground on low carbon strategies.
Meanwhile, the chief executive role at Eni comes up for reappointment in May amid speculation Descalzi would only keep the job if he had come up with a credible plan for decarbonisation.
It is a symbol of the new world of oil and gas where fitness for a top job may depend as much on your plans for carbon as for crude.
(This is an Upstream opinion article.)