Total and NGOs Greenpeace and Reclaim Finance are engulfed in a bitter dispute over the oil & gas supermajor’s climate ambitions – or lack of them – ahead of a late May shareholders’ meeting that is expected to rubber-stamp a company rebranding.
In an unusually aggressive press release, Total on Monday accused the NGOs of “numerous inaccuracies and falsehoods” in their recent joint report ‘Total responsible, Finance complicit?’
Total’s irritated reaction could also show an unease about the NGOs' open challenge to the company’s power structure at the top level.
Reclaim Finance last week called upon shareholders to participate in this year’s shareholders’ meeting (last year only just over 11% of eligible voters took part), make the French company’s board of directors accountable for its climate policies and – if needed – vote against the re-election of the board.
“For the time being, all Total has to show for its purported commitment to the climate is a name change to TotalEnergies,” Reclaim Finance director Lucie Pinson said when Total last week said it will ask shareholders to approve the new name on 28 May.
“But words alone are powerless to realise the ecological transition – the greenwashing of Total SE is fast becoming untenable.”
The shareholders meeting will also hold a non-binding vote on Total’s climate plans, and the board has announced that this year for the first time the bonuses of top executives will be linked to a reduction of certain emissions.
Save the planet through more gas output?
Despite a recent rush among European oil & gas companies to invest in renewable energy – mostly offshore wind and solar – the fossil giants are regularly confronted with greenwashing accusations, as in most cases their spending in renewables is only a fraction of their still massive investment in new hydrocarbons exploration.
Also, decarbonisation pledges are often stated in a blurry, technocratic language, and in general not deemed sufficient to achieve the Paris climate agreement goal to keep the increase in global temperatures to 1.5° Celsius.
To reach that target, the world must reduce production of coal, oil and gas by 6% per year until 2030, the UN urged in a recent report. Yet production is increasing by 2% annually.
Total in a September 2020 strategy update said it plans to increase its sales of liquefied natural gas (LNG) to 50 million tons per year by 2025, and double them this decade. At the same time, the company in oil will focus on low cost and high profitability projects, which could mean a slow phase-down of oil versus LNG. On balance (oil and gas combined), Total’s upstream production is still slated to rise by 2% annually through 2025, the company has acknowledged.
Natural gas emits some 50% less CO2 than oil when burned in new gas power stations, but scientists increasingly warn of its substantial emissions of methane during its extraction. Methane is a gas that is many times more aggressive in trapping heat in the atmosphere than CO2.
Renewables spending enough?
Total’s spending in renewables and electricity is slated to increase to eventually make up 20% of capital expenditure, which admittedly is more than most of the French group's rivals are willing to spend on green energy.
But that also means that 80% of the company’s investments will still go into oil and gas, despite the stated ambition to transform itself into a “broad energy company”.
How Total wants to reach net zero emissions by 2050 by still betting mostly on oil and gas remains a mystery. Reclaim Finance said the oil major in its decarbonisation scenarios is relying too heavily on little-proven carbon capture and storage (CCS) and natural carbon sinks through measures such as afforestation.
Scopes of emission cuts
The company in its reply to the NGOs didn’t comment on its LNG expansion plan, but instead accused Greenpeace and Reclaim Finance of a lack of sincerity that could mislead investors, and made a list of what it said are inaccuracies in their report in relation to Total’s emission reduction targets.
The company said a statement in the report that Total’s so-called scope 3 emissions (emitted by customers through the use of oil and gas products) would increase from 410 metric tons to 500MT by 2030 is false.
Instead, a targeted 30%-cut in scope 3 emissions in Europe alone would lead to an overall lowering of those emissions globally, Total claims.
The NGOs had accused Total of only having a clear target for scope 3 emissions in Europe and not worldwide, although only 13% of its production in 2019 came from Europe.
Total said that indeed only 13% of its global oil and gas production comes from Europe, but the continent nevertheless accounts for around 60% of its scope 3 emissions (supposedly as the company sells much more in Europe than it produces).
The targeted emission cut in Europe will thus have the effect of also lowering global emissions by 2030, it argued, although the company for global scope 3 emissions only said those will be lower than in 2015, without making a specific target in percentages or volumes.
The NGOs in their report also claim that Total in its climate ambition knowingly forgot the emissions related to the production and refinery or liquefaction operations, which the company said is also untrue.
Total stressed that it actually targets to bring down its scope 1 + 2 emissions (from oil & gas production and refining) by 40% by 2030.
To measure emission reductions, Total estimates the average carbon intensity of its customers and its production and the end-use of its products, using an indicator that is hard to comprehend for non-experts or ordinary customers.
Rebuffing Total’s accusations, Reclaim Finance said its conclusion that the company’s overall emissions will actually increase by 2030, and not fall, came from August 2020 data provided by analyst Rystad Energy on the company’s hydrocarbon production forecast.
Instead of replying with a quantified target for the reduction of its global emissions, Total only responds with words, the NGO asserted, and claimed Total’s estimate to reduce its European emissions are wrong as the company doesn’t include emissions related to products sold at an intermediary stage.
While Total may be right about some inaccuracies in the NGOs report, the company didn’t react to the valid criticism that increasing gas production and spending too little on renewables will not save the climate.
Total needs to do more than pointing to wrong numbers in a report to rebuke the accusation of greenwashing.