Climate policy principles

ExxonMobil aims to achieve net-zero emissions from its operated assets by 2050 and is taking a comprehensive approach centered on developing detailed emission-reduction roadmaps for major operated assets. This ambition applies to Scope 1 and Scope 2 greenhouse gas emissions. It builds on the Company’s 2030 emission-reduction plans, which include plans to reach net-zero emissions in our Permian Basin operations by 2030, and ongoing investments in lower-emission solutions, including carbon capture and storage, hydrogen and biofuels. The Company’s roadmap approach identifies greenhouse gas emission-reduction opportunities and the investment and future policy needs required to achieve net-zero.

Our 2030 emission-reduction plans are consistent with Paris-aligned pathways, the U.S. and European Union’s Global Methane Pledge, and the U.S. Methane Emissions Reduction Action Plan. Compared to 2016 levels, these plans are expected to achieve: 

• 20-30% reduction in corporate-wide greenhouse gas intensity and an absolute reduction of approximately 20% (or approximately 23 million metric tons). 
• 40-50% reduction in upstream greenhouse gas intensity and an absolute reduction of approximately 30% (or approximately 15 million metric tons). 
• 70-80% reduction in corporate-wide methane intensity. 
• 60-70% reduction in corporate-wide flaring intensity. 

These plans are also expected to achieve World Bank Zero Routine Flaring by 2030. Similarly, absolute flaring and methane emissions are expected to decrease by 60% and 70%, respectively. These emission-reduction plans cover Scope 1 and Scope 2 emissions from assets the Company operates. For non-operated assets, the Company works with its equity partners to advance greenhouse gas reductions to achieve comparable results.

Over the next six years, we plan to invest more than $15 billion on initiatives to lower greenhouse gas emissions. A significant share is focused on scaling up carbon capture and storage, hydrogen and biofuels. Stronger policy would further accelerate development and deployment of lower-emission technologies, and provide ExxonMobil additional investment opportunities to reduce greenhouse gas emissions. 

Advocating for sound policies

Recognizing that sound government policies are required and can act as an accelerator for lower-emission alternatives, ExxonMobil actively participates in climate-related policy discussions around the world.

The Company focuses on practical policy solutions that recognize the increasing global demand for affordable and reliable energy while enabling scalable development and deployment of lower- and zero-greenhouse gas emission technologies.

Durable and predictable market-driven policies can further incentivize developments, and scale investments in lower-emission technologies to help achieve a net-zero future.

A good example is a coordinated and transparent economy-wide price on carbon such as a carbon tax. An established carbon price would enable all technologies to compete and cost-effectively lower carbon intensity while delivering meaningful emission reductions. Broad adoption of an economy-wide price on carbon could also help spur the development of global carbon markets as envisioned in Article 6 of the Paris Agreement.

In the absence of economy-wide carbon pricing, well-designed sector-based policy options could also be an effective way to reduce emissions. ExxonMobil supports the approaches outlined below, which help address emissions in manufacturing, transportation and power generation.

Manufacturing 

For the manufacturing sector, ExxonMobil’s focus is on advancing carbon capture and storage and hydrogen. The International Energy Agency and the U.N. Intergovernmental Panel on Climate Change have identified both hydrogen and carbon capture and storage as vital to reducing emissions associated with manufacturing and heavy industry. 

ExxonMobil is evaluating a number of carbon capture and storage opportunities that have the potential to be commercial with current technologies. However, to drive investment and deploy the technology at the pace and scale needed to meet the Paris Agreement goals, governments must establish durable regulatory and legal frameworks as well as additional incentives, similar to those available for other more established low-emission technologies. In general, low-carbon policies should be clear, cost-effective, technology-neutral, and aligned with free-market principles. 

ExxonMobil supports a policy and regulatory framework for carbon capture and storage that would: 

• Sustain long-term government support for research and development.
• Provide standards to ensure safe, secure and permanent CO₂ storage.
• Allow for fit-for-purpose CO₂ injection well design standards.
• Provide legal certainty for pore space ownership.
• Ensure a streamlined permitting process for carbon capture and storage facilities.
• Provide access to CO₂ storage capacity owned or controlled by governments.
• Allow for trading of high-quality offsets generated from carbon capture and storage and low-carbon projects.

ExxonMobil is actively engaging stakeholders and potential partners on these policy enablers that could unlock carbon capture and storage business opportunities. 

ExxonMobil is also evaluating strategic investments to increase the use of hydrogen. The Company has extensive experience with this important low-emissions energy source, and produces about 1.3 million metric tons annually. 

Hydrogen is a zero-carbon energy carrier that could serve as an affordable and reliable source of energy for heavy-duty trucking and energy-intensive industrial processes in the steel, refining and chemical sectors. The Company is participating in cross-industry groups to identify the technologies and policies required to deploy hydrogen at scale. For example, existing natural gas transmission infrastructure has the potential to be used for hydrogen with moderate upgrade costs. To rapidly develop a hydrogen economy, additional technology-neutral policy is required. 

A technology-neutral, emissions-intensity standard is one example of a policy approach that could significantly reduce CO₂ emissions in the manufacturing sector by setting targets based on life-cycle carbon intensity. An emissions-intensity standard would incentivize the necessary infrastructure and lower-emission options, including natural gas, renewables, carbon capture and storage, hydrogen, and negative-emission technologies such as bioenergy with CCS, and direct air capture. 

Transportation

A holistic Low Carbon Transport policy that combines a market-based, technology-neutral fuel standard with a life-cycle vehicle CO₂ emission standard could drive emission reductions across the entire vehicle fleet.

ExxonMobil advocates for a carbon intensity-based fuel standard approach that can also be extended to the harder-to-decarbonize aviation and marine sectors. The Company was a lead participant in developing the American Petroleum Institute’s policy framework that includes an action plan to reduce life-cycle emissions in the U.S. transportation sector. 

Power generation

A technology-neutral clean energy standard, or carbon intensity standard, could reduce CO₂ emissions in the electricity sector by setting targets based on carbon intensity and incentivizing necessary infrastructure and lower-emission options, including natural gas, renewables, carbon capture and storage and negative-emission technologies such as bioenergy with CCS, and direct air capture. 

ExxonMobil participated in the U.S. Chamber of Commerce’s development of policy principles to underpin a U.S. clean energy standard for the electricity sector. The Company continues to support engagement with the U.S. government on this issue.