Exxon raises targets to reduce greenhouse gas emissions after meeting previous goals

• • ExxonMobil raised its targets to reduce its greenhouse gas emissions 20%-30% by 2030
• • The company intends to spend between $20 billion and $25 billion per year on this effort until 2027

ExxonMobil has increased its targets to reduce greenhouse gas emissions throughout its company  20%-30% by 2030. This comes after the company achieved its previous target of 15%-20% intensity reduction by 2025. The earlier target was set for its “upstream" (oil and gas production) businesses.

The company outlined its spending plan on Wednesday and said that it intends to spend between $20 billion and $25 billion per year till 2027. This figure is higher than the $16 billion to $19 billion range it outlined for 2021 spending, but significantly below the $30 billion to $35 billion the company forecast spending annually before the pandemic took hold.

It also intends to spend $15 billion cumulatively on new emissions-reduction efforts to 2027, or about $2.5bn a year.

The company has outlined a string of potential carbon capture and biofuel projects this year, such as the construction of a $100bn CCS mega-hub in Houston, but many of those projects will need hefty subsidies or a carbon price to be built.

Tracing the cash trail

With rising oil and gas prices, the company has enjoyed large profits in 2021. Exxon reported earnings of $6.8 billion in October, its best quarterly performance since 2017. On Tuesday, U.S. oil stood at $69.16 per barrel.

Despite the hike, oil prices have been volatile with the WTI falling rapidly after rising as high as $85 in October. But U.S. oil prices fell more than $17 a barrel in November, prompting the release of oil reserves from the U.S. strategic petroleum reserve. The market is left to deal with the impact of this decision and the new risks triggered over fears of the Omicron coronavirus variant.

Exxon believes that its spending plans provide flexibility to react to “adverse market conditions.”

“The restored strength of our balance sheet and improved financial outlook support accelerating investment in our industry-advantaged, high-return projects, and a growing list of financially accretive lower-emission business opportunities,” Darren Woods, Exxon’s chairman and chief executive officer, said in a statement.

Shares of Exxon advanced about 1.7% during premarket trading on the heels of a broader market comeback and this announcement.

Picture Credits: FT