A Look At the Science-Based Targets Initiative Expert Advisory Group Report
In January 2023, the SBTi and Mott Macdonald released their ‘Oil and Gas project: Expert Advisory Group Review Evaluation Report’. It summarises the recommendations made by their Oil and Gas Expert Advisory Group, in regard to SBTi’s development of a new Oil and Gas science-based target setting methodology.
On their website, SBTi state ‘The project, first and foremost, will address embedded emissions in fuel supplied, but will also seek to address scope 1 emissions (energy and methane process emissions). At a later stage, the project will consider scope 2 emissions and links to the refinery and petrochemical industry’.
This work began in October 2020, and was followed by SBTi pausing the validation of target commitments for Oil and Gas companies in March 2022 while they continued to develop their methodology. The SBTi currently does not allow ‘Companies with any level of direct involvement in exploration, extraction, mining and/or production of oil, natural gas, coal or other fossil fuels’ to apply for target validation while the new guidance is being developed, and those that had already been verified were removed from the SBTi target dashboard for the time being.
The Expert Advisory Group (EAG) agreed with the proposal that the Well-to-Wheel methodology should be used to account for emissions from the use of sold products - both for upstream and downstream activities - and that the net value chain accounting methodology should be used by integrated Oil and Gas companies for scope 3 volume accounting.
It was suggested that the current draft methodology be changed, so that Oil and Gas companies operating solely in the downstream sector should include both intensity targets and absolute emissions targets.
It was also suggested that while SBTi allows flexibility in the quantitative indicators companies use, they should indicate a preferred approach to try and increase consistency. While it is currently excluded from the draft methodology, the EAG recommends that the coverage of the guidance should extend to ‘O&G companies operating within transportation and storage parts of the value chain’.
They additionally stated that a requirement for scope 3 use of sold products targets being explicitly referenced within the methodology would be preferential.
There were also areas where the Expert Advisory Group suggested that the current guidance could do with further explanation, the addition of examples, or more explicitly stating what is required of companies.
The SBTi will now consider the feedback from the Expert Advisory Group and take actions where they feel they are necessary, reserving the right to make the final decision as far as the new methodology is concerned. As of yet there is no set date for when the new methodology might be finalised or published, but SBTi have stated that it will receive further internal and external consultation on the document.