Energy Giants Abandon Global Net Zero Group Over Oil and Gas Clampdown
Shell and other major energy players have withdrawn from a high-profile effort to establish a global “net zero” emissions benchmark, after draft proposals effectively demanded an end to new oil and gas developments, according to documents seen by the Financial Times.
The companies—Shell, Norway’s Aker BP, and Canada’s Enbridge—exited an expert advisory group convened by the Science Based Targets initiative (SBTi), a widely followed climate standard-setter whose approval is sought by global corporations ranging from Apple to AstraZeneca. Their departures reflect mounting tensions between the fossil fuel industry and evolving climate disclosure and accountability frameworks.
A Standoff Over New Oil and Gas Projects
The draft standard at the heart of the dispute would have prohibited companies from pursuing new oil and gas fields after submitting a climate plan to the SBTi, or after 2027—whichever came first. It also called for a sharp decline in fossil fuel production, escalating concerns in the oil and gas industry that the standard would impose an unworkable path toward net zero targets.
Shell, which has participated intermittently in the SBTi process since 2019, confirmed that it withdrew after concluding the draft “did not reflect the industry view in any substantive way.” The company maintained its commitment to achieving net zero by 2050 but argued that any credible standard must offer companies “sufficient flexibility” and reflect what it called a “realistic” societal pathway.
Aker BP said its ability to influence the emerging standard had proven “limited,” while emphasizing that its departure was “in no way” a sign of diminished climate ambition. Enbridge declined to comment, according to the Financial Times.
SBTi Pauses Work on Oil and Gas Standard
Following these high-profile exits, the SBTi announced it had “paused” work on its oil and gas standard, citing internal “capacity considerations.” However, the organization rejected claims that this decision was driven by pressure from industry, telling the FT there was “no basis in reality for these claims.”
Separately, the SBTi has reportedly delayed and diluted planned guidance for financial institutions regarding their financing of fossil fuel projects. According to sources cited by the FT, the deadline for ending finance or insurance for companies pursuing new oil and gas production was quietly pushed back from 2025 to 2030 after David Kennedy, a former EY partner, took the helm as SBTi’s CEO in March.
Industry vs. Climate Standards: A Growing Divide
The outcome underscores a fundamental fault line: The burning of fossil fuels remains the leading contributor to global warming, and scientists broadly agree that capping long-term temperature rises to 1.5°C is critical to avoiding catastrophic and irreversible damage.
Yet the oil and gas sector remains wary of climate standards that would effectively mandate an abrupt halt to exploration, raising concerns about energy security, investor interests, and the feasibility of meeting future demand during the transition.
One source involved in drafting both the oil and gas and financial sector standards expressed frustration at the delay, telling the Financial Times: “The more we delay, the more cover we are providing to big oil.”
For now, Shell and others continue to publicly state their commitment to achieving net zero by 2050, even as the frameworks meant to define what “net zero” means in practice remain mired in controversy.
By Charles Kennedy for Oilprice.com
