Carbon offsets II. - The strategies driving the net zero of tomorrow

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14 February 2022

Carbon offsets II. - The strategies driving the net zero of tomorrow

Report summary

How are oil and gas companies using carbon offsets to decarbonize their value chain, embed flexibility in their net zero strategies and create value in the process? What new business models are emerging as carbon markets evolve? Oil and gas majors are developing ambitious carbon management strategies that leverage offsets to compensate hard to abate emissions, while creating optionality. Smaller companies may not have the same resources, but they can still take these strategies as reference points. There is high potential for all oil and gas companies to leverage their expertise in specific technologies and build portfolios of high-quality offsets, to be used for decarbonization or as financial instruments. This insight provides an overview of the strategies adopted by oil and gas companies in the carbon offsets value chain. It is the second in a three-part series on how carbon offsets can be used sustainably to decarbonize oil and gas companies and create value in the process.

Table of contents

    • The opportunity for oil and gas in the energy transition
    • The carbon offsets value chain
    • How hands-on do you want to be?
    • Hands-on approaches to offset project development
    • Acquiring third-party companies or developing own projects
    • Partnering with project developers to generate carbon offsets
    • Purchasing carbon offsets
    • How offsets can be used
    • Using carbon offsets to achieve a green premium
    • Using carbon offsets to provide customers with compensation mechanisms for their own footprint
    • Using carbon offsets to go net zero now
    • Acquiring carbon offsets as a penalty: an example from Gorgon
    • Using carbon offsets as a financial instrument
    • Carbon offset strategies leveraging the value chain

Tables and charts

This report includes 11 images and tables including:

  • Emission reduction targets of the top 20 oil and gas producers
  • Order of emission-reducing operations
  • Traded volume and value of carbon offsets in voluntary carbon markets
  • Carbon offsets value chain
  • Evaluating the need for carbon offsets
  • Oil and gas Scope 1 and 2 emissions by source
  • Options for sourcing carbon offsets
  • Nature-based solutions
  • Examples of Majors partnering with project developers
  • Share of transaction volume in the voluntary carbon market by project type
  • Use or sell carbon offsets

What's included

This report contains:

  • Document

    Carbon Offsets Insight PART II Strategy FINAL.pdf

    PDF 1.14 MB