Frequently asked questions

Report April 23, 2021

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Frequently asked questions

How are ExxonMobil's operations and investments aligned with the Paris Agreement?

ExxonMobil supports the goals of the Paris Agreement,1 an agreement among national governments to reduce carbon emissions from their economies. The Company’s Outlook for Energy, which informs its business strategy and investments, projects future energy supply and demand, and aligns in aggregate with the Nationally Determined Contributions (NDCs) submitted by Paris Agreement signatories, which outline each country’s plans to reduce its emissions. ExxonMobil's greenhouse gas emission reduction plans announced in 2020 are projected to be on a pathway consistent with the goals of the Paris Agreement.  

The Company’s strategy focuses on the dual challenge of meeting the growing demand for energy to support economic development around the world while minimizing environmental impacts and the risks of climate change. ExxonMobil believes it has an important role to play in helping reduce climate risks through its commitment to manage operational emissions, produce cleaner, more advanced products, conduct fundamental research into new technology solutions, and engage in climate policy discussions.

Over the past two decades, ExxonMobil has invested more than $10 billion to research, develop and deploy lower-emission energy solutions. These solutions have resulted in highly efficient operations that have eliminated or avoided approximately 520 million tonnes of greenhouse gas emissions. The Company continues to deploy its competencies in breakthrough technology development to pursue advances in the high-emission sectors where current technologies are insufficient to achieve deep reductions. These sectors – power generation, commercial transportation and industrial – represent about 80 percent of current energy-related CO2 emissions and are projected to increase with population growth and economic development. Further advances in these areas are critical to reducing emissions and would make a meaningful contribution to achieving the goals of the Paris Agreement.  

As governments around the world implement policies to meet their respective emission- reduction goals, demand for more carbon-intensive energy products will be reduced. 

However, even under 2°C scenarios, a growing and increasingly prosperous global population will increase energy demand and still require significant investment in new supplies of oil and natural gas. The IEA's Sustainable Development Scenario (SDS) estimates the world will still need 66 million barrels of oil per day in 20402. However, without further investment, the impact of depletion would result in oil production of just 22 million barrels of oil per day in 2040.3 The IEA estimates $12 trillion of additional oil and natural gas investment is needed to meet the oil and natural gas demand in the SDS. 

Noting the Paris Agreement did not contemplate voluntary commitments from individual companies, and that advancing the goals of Paris can occur in a number of ways (including replacing more emission-intensive activities with less intensive activities), ExxonMobil’s announced greenhouse gas plans are projected to be consistent with the goals of the Paris Agreement. For example, planned reductions in upstream emissions through 2025 would be consistent with the goals of a 2-degree pathway (which envisions a global emissions reduction of about 10 percent in 2025 versus 20164).  

Does ExxonMobil have to reduce its production to align with the Paris Agreement?

The Paris Agreement does not contemplate or require individual companies to decrease production to align with the goal of maintaining global temperature rise to below 2°C. The structure of the agreement recognizes that energy-related emissions are driven by society’s demand for energy – not its supply. Improved efficiency, effective government policies and informed consumer choices are more effective measures to address demand. 

With respect to energy supply, production reductions by individual companies would have no impact on demand or consumption of energy, and would simply result in production shifting from one producer to another. In addition, shifting of production would not necessarily reduce the amount of greenhouse gases produced and, in some cases, the opposite could be true. The transfer of production from well-run, highly efficient operators to less-efficient producers, for example, could actually increase emissions associated with the production of oil and natural gas, and finished products. Society benefits when the most efficient operators lead energy development efforts.

ExxonMobil has a long history of industry-leading operational performance. For example, the Company’s refining operations have consistently ranked in the top quartile for energy efficiency in the key refining industry benchmark survey by Solomon Associates.5 In ExxonMobil’s chemical business, advanced efficiency technologies and techniques have reduced net equity greenhouse gas emissions intensity by nearly 8 percent between 2013 and 2020. 

In addition, as of 2020 the Company reported over a 34 percent reduction in methane emissions in its U.S. unconventional production through a series of industry-leading best practices such as equipment upgrading and enhanced use of technology to improve inspections. ExxonMobil exceeded its goal to reduce company-wide methane emissions by 15 percent and flaring by 25 percent by year-end 2020. 

Recently, ExxonMobil announced plans to reduce the intensity of operated upstream greenhouse gas emissions by 15 to 20 percent by 2025, compared to 2016 levels. This will be supported by a 40 to 50 percent decrease in methane intensity, and a 35 to 45 percent decrease in flaring intensity across its global operations, as well as other measures. The Company’s upstream operations also plan to align with the World Bank’s initiative to eliminate routine flaring by 2030.

The plan is projected to be consistent with the goals of the Paris Agreement and will drive meaningful near-term emission reductions as the Company works toward industry-leading greenhouse gas performance across its business lines. 

ExxonMobil's emission reduction plans cover Scope 1 and Scope 2 emissions from assets operated by the Company. The plans will leverage the continued application of operational efficiencies and ongoing development and deployment of lower-emission technologies such as carbon capture and storage.

While the Company’s voluntary efforts are important, they capture only a fraction of industry’s overall methane emissions, which is why ExxonMobil works with policymakers to improve effectiveness of regulations so that all of industry participates to maximize the benefits to society. 

What is ExxonMobil doing to prepare for a lower-carbon future while meeting energy needs of a growing population?

ExxonMobil plays a critical role in providing the energy that supports economic growth and improves the quality of life for people around the world. Major forecasts project energy demand to increase as the global population rises to well over 9 billion by 2040 from 7.5 billion today, and because of growing prosperity and an expanding middle class.6

Even under 2°C and net-zero scenarios, meeting this increase in energy demand will require significant investment in new supplies of oil and natural gas, generally consistent with ExxonMobil’s investment levels. This is mainly due to the significant natural decline rates associated with oil and natural gas production. At the same time, there is a need to pursue further emission-reduction efforts and technologies in support of the goals of the Paris Agreement.

The Company supports market-based approaches to reduce emissions, including further cost-effective regulation of methane and an economy-wide price on carbon. ExxonMobil believes market-based policies that place a uniform, predictable cost on carbon will drive emission reductions at the lowest cost to society while supporting technology innovation and deployment.

Technology innovation is critical because the current solution set is insufficient to reduce emissions to targeted levels at an acceptable cost to society. According to the IEA, only six of 46 important technologies and sectors are on track to help society reach the Paris Agreement goals.7 Meeting these goals will require large-scale deployment of new technologies in key areas – power generation, commercial transportation and industrial processes – where emissions are most significant and forecast to increase.

Near-term actions the Company is taking to prepare for a lower-carbon future, include:

  • Expanding supplies of cleaner-burning natural gas
  • Improving energy efficiency in operations
  • Operating and investing in carbon capture and storage 
  • Reducing flaring and methane emissions from operations
  • Developing products, such as premium lubricants, light-weight plastics, and special tire liners to help consumers improve efficiency and reduce emissions
  • Advocating for effective climate policy to address the risks of climate change at the lowest societal cost.

Longer-term efforts include:

  • Progressing advanced biofuels from algae and agricultural waste for commercial transportation and petrochemicals
  • Researching breakthroughs to improve commerciality of carbon capture and storage technology for power generation and industrial applications
  • Developing new and efficient technologies that reduce emissions in refining and chemical facilities 

More information can be found in the Strategy section of this 2021 Energy & Carbon Summary.

How is ExxonMobil supporting society's desire to achieve net-zero emissions and 2°C?

ExxonMobil has supported the Paris Agreement from its adoption. The Company also continues to support U.S. government participation in the framework. ExxonMobil’s Outlook for Energy aligns in aggregate with the current Nationally Determined Contributions (NDCs) submitted by Paris Agreement signatories, which represent each country’s plan to address its greenhouse gas emissions. ExxonMobil bases its business strategy and investments on its work underpinning the Outlook, which assumes progress in technologies, infrastructure and government policies to meet the NDCs. New NDCs have been submitted recently and more are expected in 2021.

The IPCC assessed available pathways and found 74 pathways that limit global warming to below 2°C (IPCC Lower 2°C).8 In those pathways, global net anthropogenic emissions of CO2 fell on average more than 20 percent from 2010 levels by 2030, reaching net zero around 2070.9 At the time at which net emissions reach net zero, any remaining emissions would need to be balanced by removing CO2 from the atmosphere. 

A challenge for society is how to transition to a net-zero world, while providing for a growing population with growing energy needs. 

The IPCC pathways that lead to net zero and limit warming to less than 2°C show important trends, including increase in renewables (wind and solar), decrease in coal, increase in use of carbon dioxide removal (CDR), increase in carbon capture, and focused efforts to reduce other greenhouse gases and aerosols that cause warming. The IEA's net-zero emissions by 2050 scenario, a net-zero analysis through 2030, also reached similar conclusions on needed CO2 reductions through deployment of all key technologies. 

ExxonMobil continues to help meet global oil and natural gas demand, which is projected to continue even in a rapid net-zero transition, while working to reduce the Company's emissions of greenhouse gases. The Company also plays an important role in helping to improve technology that would be useful in net-zero pathways including biofuels, carbon capture, direct air capture, reduction of methane including advanced measurement and monitoring, and technology to enable low greenhouse gas energy such as hydrogen. 

The pathways that lead to net zero involve a transition of all major regions of the world and across all sectors of the economy. ExxonMobil continues to proactively collaborate with governments and organizations to advance policy and technology development in support of net zero. The Company recognizes and continues to support the important work of the UNFCCC to achieve global participation through the Paris Agreement. The Company also works with major trade associations and industry groups including the Oil and Gas Climate Initiative and International Petroleum Industry Environmental Conservation Association to advance emission reduction policies and best practices and to develop and deploy lower emission technology. The oil and natural gas sector along with other sectors and governments all have an important role to play in the energy transition. 

Why isn't ExxonMobil investing in existing renewable energy sources like wind and solar?

Although wind and solar will play an important role in the transition to lower-carbon energy sources, new technology advances are required to reduce emissions to levels outlined in 2°C scenarios. ExxonMobil is undertaking research and development where the need is greatest. The Company is focused on areas where it can make a unique and significant contribution, and where it has deep scientific competencies. In this way, ExxonMobil can make the most meaningful and expedient contribution to society’s efforts to manage the risks of climate change.

The Company’s technology development program focuses on three distinct high-emitting sectors where there are currently limited viable solutions for broad deployment: commercial transportation, power generation and industrial processes. These sectors represent about 80 percent of current energy-related CO2 emissions and are projected to increase with population growth and economic development.

In transportation, ExxonMobil is making progress in the development of advanced algae and cellulosic liquid biofuels. Because of their energy density, liquid fuel solutions are currently needed for commercial transportation where battery capacity is an issue for heavy loads and long distances.  

In power generation and for industrial processes, the Company is working to make carbon capture and storage technology more economic, to potentially enable wider deployment. ExxonMobil currently has about 20 percent of the world’s total carbon capture capacity.

In the industrial sector, ExxonMobil is developing new processes for refining and chemical facilities to reduce energy use through advanced separations processes, catalysts and process configurations.  

Further progress in these areas is critical to reducing emissions and would make a meaningful contribution to achieving the goals of the Paris Agreement.

It should also be noted that ExxonMobil was one of the top purchasers in 2018 of renewable energy, including wind and solar to support its operations.

Why did ExxonMobil establish a new Low Carbon Solutions business and what products or technologies will be commercialized?

In 2018, ExxonMobil established a Carbon Capture & Storage (CCS) Venture that was recently expanded into the new Low Carbon Solutions business with the goal of commercializing its extensive low-carbon technology portfolio. The new business will initially focus on CCS and hydrogen, two of the critical technologies required for society to achieve the climate goals outlined in the Paris Agreement. The objective is to build on ExxonMobil’s decades of CCS operating experience and CCS-related R&D to help facilitate society’s transition to a lower carbon future at the lowest possible cost. Over the past two decades, ExxonMobil has invested more than $10 billion on lower-emission energy solutions, including CCS, with plans to invest at least another $3 billion through 2025.10 ExxonMobil’s investment in CCS and other low-carbon solutions will be based on opportunity availability and attractiveness.

The establishment of the Low Carbon Solutions business coincides with a growing recognition by governments and investors of the importance of CCS and a developing market for emission-reduction credits, all of which are critical for broad scale commercialization. CCS is also one of the few technologies that could enable some industry sectors to significantly reduce greenhouse gas emissions, including the refining, chemicals, cement and steel sectors.

Today, ExxonMobil is the world’s leader in carbon capture, with more than 30 years of experience in CCS technology and is the first company to capture more than 120 million tonnes of CO2, the equivalent to the annual emissions of more than 25 million cars.11 The company has an equity share in about one-fifth of global CO2 capture capacity,12 and has captured approximately 40 percent of all the captured anthropogenic CO2  in the world since the early 1970s.13

ExxonMobil Low Carbon Solutions will also leverage ExxonMobil’s significant experience in the production of hydrogen which, when coupled with CCS, is likely to play a critical role across a number of market sectors as the world transitions to a lower-carbon energy system. Other technology focus areas in ExxonMobil’s low carbon portfolio will be added in the future as they mature to commercialization.

1 Reference is made to the first set of NDC submissions made in 2015; new or updated NDCs are anticipated, but not included as part of this analysis as only a few countries have updated their NDCs at this time. Additional NDC submissions are anticipated ahead of the 26th United Nations Climate Change Conference in 2021.

2 IEA World Energy Outlook 2020, p. 171.

3 IEA, ExxonMobil analysis.

4 ExxonMobil analysis

5 Solomon Associates. Solomon Associates fuels and lubes refining data available for even years only.

6 BROOKINGS INSTITUTION, There are many definitions of "middle class" - here’s ours, Richard V. Reeves and Katherine Guyot Tuesday, September 4, 2018, accessed December 2020.
https://www.brookings.edu/blog/up-front/2018/09/04/there-are-many-definitions-of-middle-class-heres-ours/

7 IEA, 2020. Uneven progress on clean energy technologies faces further pressure from the Covid-19 crisis, 5 June 2020, accessed December 2020.
https://www.iea.org/news/uneven-progress-on-clean-energy-technologies-faces-further-pressure-from-the-covid-19-crisis

8 IPCC, 2018: Global warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre- industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global responseto the threat of climate change, sustainable development, and efforts to eradicate poverty [V. Masson-Delmotte, P. Zhai, H. O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. Péan, R. Pidcock, S. Connors, J. B. R. Matthews, Y. Chen, X. Zhou, M. I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, T. Waterfield (eds.)]. In Press.

9 ExxonMobil analysis of IPCC 74 Lower 2°C scenarios.

10 Represents currently identified future investment opportunities from 2021 through 2025, consistent with past practice, results, and announced plans.

11 Global CCS Institute 2020 report and ExxonMobil analysis of 2020 facility data. Car equivalency calculated with US EPA GHG equivalency calculator.

12 Global CCS capacity: Global CCS Institute, Global Status of CCS 2020, page 19. ExxonMobil CCS capacity: ExxonMobil estimates.

13 Global CCS Institute. Data updated as of April 2020 and based on cumulative anthropogenic carbon dioxide capture volume. Anthropogenic CO2, for the purposes of this calculation, means CO2 that without carbon capture and storage would have been emitted to the atmosphere, including, but not limited to: reservoir CO2 from gas fields; CO2 emitted during production and CO2 emitted during combustion. It does not include natural CO2 produced solely for enhanced oil recovery.

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