Report
5 min read
• April 30, 2025Rational and constructive policy
- The world’s climate policies are falling short.1 It’s time for a pragmatic approach using product-level carbon-intensity standards to incentivize production of low-carbon-intensity products.2
- Product-level standards have been used to solve a multitude of tough challenges, and they can help create an efficient marketplace for products with low-emissions intensity.
- Carbon-intensity standards can be tightened over time as technology improves, reducing the cost of lowering emissions, encouraging producers to invest, and ensuring demand is met.
- To be effective, intensity standards must be underpinned by a well-designed carbon emissions accounting framework that reliably tracks CO2 emissions.
- Rational and constructive policies that encourage the full range of technologies are key to lowering global emissions and meeting society’s needs for critical products and services.
Report
5 min read
• April 30, 2025Navigate to:
Our Global Outlook forecasts energy use will increase another 15% by 2050. The growing needs of a rising population in the developing world drive this increase as economies develop and living standards improve. A better quality of life and lowering energy poverty rates drives higher energy consumption. This highlights the need for a new approach to help ensure CO2 is appropriately managed as prosperity grows.
Product-level carbon-intensity standards – a pragmatic approach
Today, countries around the world set thousands of standards for products.9 Products sold into these countries must meet these standards irrespective of where the product is made.
There are many examples of product standards that have proven effective and allowed ample time for technology to improve and costs to come down. They include energy efficiency standards on appliances, food safety, and fuel economy.
These standards work by setting limits on certain product characteristics. They can be tightened over time, which incentivizes producers to meet increasingly stringent requirements.
Standards like the following have prompted markets to adopt new technologies and enabled capital to flow to the most cost-effective solutions, while still meeting demand.
“To achieve a lower-emissions future, government GHG policy should set carbon-intensity standards on products. We believe this is the best way to engage the collective efforts of industry and leverage competitive market forces. To drive further innovation and reduce the most emissions at the lowest cost, policies must remain technology agnostic. Governments should not pick winners and losers. Intensity standards establish a level playing field and have a strong precedent.”
Example: marine fuel
In the 2010s, the International Maritime Organization (IMO) required that the limit for sulfur content in marine fuels be lowered from 3.5% to 0.5%. The feasibility of the change was studied with industry involvement, and the change was messaged to the industry over more than 10 years. This gave shippers and their suppliers time to consider how to best meet the new standard. A variety of solutions were implemented. They included fuel hydrotreating, alternate feeds to marine fuels, onboard scrubbers, and alternate fuel vessels. In 2020, when the standard became effective, only 55 cases of non-compliance were reported among the 60,000 ships driving global trade, according to the IMO.10
In the marine fuel example, demand for the product continued to be driven by the underlying market. However, shippers were required to meet technically achievable standards. Fuel producers had a key role in finding ways to meet the market need affordably with the cost of compliance embedded in the price of the product, while the shippers retrofitted their ships with scrubbers to meet the standard. Using similar approaches, society has been able to address a multitude of environmental and safety challenges.
A carbon-intensity standard could be similarly effective in lowering emissions by creating market-forming policies.
The example below provides additional lessons that can be applied to carbon emissions intensity.
Ultra-low-sulfur diesel (road transport)
Background:
Until the 1990s and early 2000s, sulfur dioxide emissions from diesel fuel use were identified as a contributor to acid rain, which had become a growing public environmental concern.11
Application of product standard:
The European Union and U.S. regulators established limits for sulfur content in diesel fuel. Implementation allowed different regions to reduce sulfur content in various ways.12
Lessons learned:
Collectively, diesel standards reduce sulfur emissions from diesel on- and off-road by more than 90%.13 This has contributed to the significant decline in acid rain and improvement in air quality.14 The standards had several positive features:
- Allowing different regions to make progress in their own way reflecting local conditions and involvement of industry groups in setting timelines.15
- Industry collaboration spurring a market mechanism where over-performers exchanged and blended material with under-performers to meet the standards.16
Incorporating carbon intensity into product-level standards
The global population and demand for reliable, affordable energy will continue to grow. To help emerging and developing nations improve quality of life, we need rational and constructive policies that help lower CO2 emissions and still meet demand for critical products and services.
When governments or international bodies have applied standards to individual products or categories of products, without picking technology winners and losers, producers and sellers have efficiently competed to develop products that meet the emissions-intensity standard at the lowest price.
Governments can require that products must meet these carbon intensity standards to be sold in the market. They can decide the starting point and how to make the standard more stringent over time. Market-forming policies help create demand for lower-emission intensity products, and they help encourage producers to invest in decarbonization efforts.
Policy makers can start with the products that could drive large amounts of global CO2 emission reductions, such as steel, cement, and aviation fuel, where even small changes in carbon intensity would have big impacts.17
This approach embeds the cost of reducing emissions in the product’s price rather than as an explicit tax. The regulated application of carbon-intensity standards would require all entities selling technologies and products into a market to comply with the standard, unlocking innovation, competition, and capital.
Over time, as demand for these lower-carbon-intensity products grows, governments can step back from incentives and let markets handle compliance costs. Producers can use any viable solution to reduce carbon intensity, leading to faster and cheaper emission reductions as technologies are deployed and scaled.
Like technology, policy improvements can help catalyze cost-effective actions to lower emissions by enabling:
- Different technologies to compete.
- Market-based trading.
- Consumer choice.
- Clear, durable market signals for investment.
- Consistent policy application at the country level.
Why does the approach need to be technology neutral?
Successful policies avoid picking winners and losers. They let technologies compete.
Take the example of low-carbon hydrogen.
Hydrogen produced from natural gas with CCS is a cost-effective, scalable, and rapidly deployable alternative to other low-carbon intensity options.
Intuitively, you might think hydrogen produced using renewable sources like wind and solar would have zero GHG emissions. But as the chart below shows, that’s not the case.
To compare alternatives, you have to consider the life cycle GHG emissions of each. For example, the mining, manufacturing, and transportation needed to build wind turbines, solar panels, and renewable power plants all result in direct GHG emissions and should be accounted.
Natural gas can be used to produce hydrogen using existing infrastructure. While it also involves direct emissions from extraction, processing, and transport, technology can be used to reduce these direct emissions. Additional technologies, such as CCS, can further reduce emissions when natural gas is converted to hydrogen.
Key features of effective product-level carbon-intensity standards
- Product specific: Develop carbon-intensity standards for specific products (e.g., fuels, power, steel, cement) while considering regional factors and resources.
- Gradual tightening: Set a baseline for carbon intensity and gradually adjust it over time based on regional, sectoral, technological, affordability, and demand factors.
- Technology neutral: Allow producers to choose any carbon-reducing technology to meet standards, ensuring fair competition without bias.
- Recognize over-performance: Encourage innovation by rewarding producers who exceed carbon emission intensity standards, allowing them to trade compliance credits within their sector.
- Ease of implementation: Strategically assess and implement targets across value chains to involve a manageable number of participants (i.e., paper products vs. book printers or cement producers vs. builders) while maximizing emissions coverage.
Proper accounting can help identify today’s lowest-emission pathways for U.S. hydrogen production on an emissions accounting basis18
* ExxonMobil analysis using CCS and natural gas with reduced direct emissions intensity.
** Well-to-gate.
Successfully implementing product-level carbon-intensity standards will require a well-designed direct carbon-emissions accounting framework
The GHG Protocol, established more than 25 years ago, is often cited as the gold standard for carbon accounting. In our view, nothing could be further from the truth.19 The truth is that the GHG Protocol Corporate Accounting and Reporting Standard, was never designed as an accounting framework for products. It was designed as an inventory-based reporting tool for companies to report their emissions. It is structurally incapable of providing anything approximating an accurate tracking of CO2 as it moves through the economy, for the following reasons:
4 flaws of the GHG Protocol*
- Fails to accurately assess a company’s emissions efficiency.
Holding producers accountable for their absolute emissions, without acknowledging carbon intensity as the most appropriate way of understanding how efficient an emitter is relative to the work it is doing, will simply force a company to produce less as the only way of lowering its GHG Protocol reporting. As a result, even the lowest-emitting companies must cut production or sell assets, which shrinks supply but not demand. That means the world could face shortages, or less efficient companies would step in to meet demand rather than more responsible operators, and global CO2 will rise as a likely consequence. - Lacks a meaningful way to compare alternatives.
Because the GHG Protocol focuses on “absolute” measures, a small producer of high-emitting products will appear to be more efficient than a large producer of lower-emitting products. This can penalize companies just for being large, even if they are more efficient. - Double or even triple counts emissions.
As designed, the GHG Protocol can account for ExxonMobil’s Scope 2 emissions as another company’s Scope 1 and as a consumer’s Scope 3. This double or triple counting means, by definition, no one can depend on the GHG Protocol to give an accurate picture of CO2 emissions. A system with these inherent flaws cannot be relied on by investors or other stakeholders to accurately gauge a company’s progress in positively (or not) impacting global CO2 emissions. - Doesn’t allow for avoided emissions
When coal is replaced by LNG in power generation, CO2 emissions can be reduced by up to 60%.20 In fact, the LNG producer risks reputational or financial damage when it’s labeled a “bad actor” because its Scope 1 emissions go up, even as the LNG it produces helps society’s emissions go down. To use another example, ExxonMobil’s current efforts to reduce CO2 emissions for our company and other industries have the potential to reduce carbon emissions by the equivalent of 10 million U.S. households.21,22 That’s a very good thing. But this work will result in a higher Scope 1 and/or 2 number. In this way, the GHG Protocol can actually disincentivize the very work it should be encouraging.
*GHG Protocol is currently the underlying accounting framework for net-zero and GHG target-setting and disclosure standards such as ISO, CA100+, SBTi, and TPI, among others.
Quite clearly, the GHG Protocol is the wrong tool if the goal is to meet society’s objective of better living standards with reduced CO2 emissions. Despite this, it is often used as the basis for many of today’s policies and corporate disclosure frameworks that have resulted in an overly narrow focus on restricting supply, even as global demand and emissions continue to rise.
For the world to achieve meaningful reductions in global CO2 emissions, it must have a well-designed carbon-emissions accounting (CEA) framework based on the principles of science and financial accounting that focuses on the product level – one that:
- Makes clear where and when CO2 is counted in producing and using a product or service.
- Informs policy decisions that incentivize low-carbon investments and encourage companies to meet society’s needs using the most effective technology options.
- Enables secure supply of energy, products, and services to grow to meet demand.
CEA is not financial reporting and should not be treated like financial disclosures. But it should use accounting principles to track and verify CO2 emissions across products, companies, and countries. For example:
- CO2 should be counted only once. This would allow for an accurate accounting of direct CO2 produced at each stage in the life cycle of a product.
- When the CO2 associated with each product and service is counted, that total should ultimately balance with the total CO2 emitted to the atmosphere. Think of it like a financial ledger or balancing a checkbook.
The CEA framework, like other accounting frameworks, should have rules for countries, companies, and products. As mentioned above, CO2 should only be counted once by the product owner. CO2 can then be transferred between entities, but if it is, only the new owner accounts for it.
A well-designed carbon-emissions accounting framework would more clearly track how reductions in the product-level carbon-intensity standards are impacting overall emissions. Without a standardized approach, society risks continuing down the current path of misguided and deeply flawed measures that fail to account for the true sources of carbon emissions and their relative impact.
Successful transitions happen when policy, industry, and technology work together
An energy transition must begin at the product level. Effective policies engage industry participants and competitive markets to drive the best methods to achieve emission reductions at the lowest cost. Product-level carbon-intensity standards would do just that.
The right policies can drive innovations and technologies that speed up lower-emission options by fueling competition. And they work in tandem with the broader landscape of energy and economic policy so progress toward one objective doesn’t undermine another.
When governments focus on the “what” rather than the “how,” they avoid picking winners and losers so that companies can develop and deploy a full range of strategies and technologies for lower-emission-intensity products and solutions.
Direct carbon emissions accounting goes hand-in-hand with carbon-intensity standards to bring all the market forces to bear in reducing emissions. Importantly, it enables emissions reductions in existing products and systems, thus spreading the cost across a very large, established base, which means you can maintain affordability and achieve higher levels of carbon reduction.
A business-led coalition that leverages its collective expertise and experience could help support this approach. If governments, the private sector, and others work together to implement policies that are technology agnostic, competitive markets will develop and spur innovation. It’s been done before at the product level. We’re confident it can be done again to advance an energy transition that grows the supplies of affordable energy and products people need and moves the world toward a lower-emissions future.
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• April 30, 2025FOOTNOTES:
- UN Climate Change, Global Stocktake: https://unfccc.int/topics/global-stocktake/about-the-global-stocktake/outcome-of-the-first-global-stocktake.
- The content that follows is informed by research and analysis from McKinsey & Company, in collaboration with ExxonMobil. Individual data points have not been independently verified.
- IEA World Energy Mix, Energy supply (2000-2022): https://www.iea.org/world/energy-mix#where-does-the-world-get-its-energy.
- ExxonMobil 2024 Global Outlook.
- IEA (2025), Global Energy Review 2025, IEA, Paris https://www.iea.org/reports/global-energy-review-2025, Licence: CC BY 4.0; Institute for Energy Research - Renewable Energy Received Record Subsidies in 2024: https://www.instituteforenergyresearch.org/renewable/renewable-energy-received-record-subsidies-in-2024/.
- IEA (2025), Global Energy Review 2025, IEA, Paris https://www.iea.org/reports/global-energy-review-2025, Licence: CC BY 4.0; Global CO2 emissions from energy combustion and industrial processes (2014-2024).
- NDC registry as of February 10, 2025: https://unfccc.int/NDCREG.
- IEA (2023), Tracking Clean Energy Progress 2023, IEA, Paris https://www.iea.org/reports/tracking-clean-energy-progress-2023, License: CC BY 4.0.
- ASTM standards, by category: https://store.astm.org/products-services/standards-and-publications/standards/standards-category-list.html.
- International Maritime Organization, January 28, 2021: https://www.imo.org/en/MediaCentre/PressBriefings/pages/02-IMO-2020.aspx.
- U.S. EPA Federal Register, Vol. 66, No. 12/Thursday, January 18, 2001/ Rules and Regulations, p. 5025 of https://www.govinfo.gov/content/pkg/FR-2001-01-18/pdf/01-2.pdf
- Ibid;. European Added Value in Action Briefing (pg. 2): https://www.europarl.europa.eu/RegData/etudes/BRIE/2017/603237/EPRS_BRI(2017)603237_EN.pdf
- U.S. EPA diesel fuel standards and rulemakings: https://www.epa.gov/diesel-fuel-standards/diesel-fuel-standards-and-rulemakings#:~:text=Overview%20of%20Diesel%20Standards&text=EPA%20began%20regulating%20diesel%20fuel,low%20sulfur%20diesel%20(ULSD).
- U.S. EPA Student Center, Acid Rain: https://www3.epa.gov/acidrain/education/site_students/beingdone.html, https://www3.epa.gov/acidrain/education/site_students/whyharmful.html
- U.S. EPA Diesel Fuel Standards and Rule Making: https://www.epa.gov/diesel-fuel-standards/diesel-fuel-standards-and-rulemakings; Official Journal of the European Union (March 3, 2003): eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32003L0017&qid=1745552991151.
- U.S. EPA, Sulfur Averaging, Banking, and Trading (ABT) Program: https://www.epa.gov/renewable-fuel-standard-program/sulfur-averaging-banking-and-trading-abt-credit-data.
- ExxonMobil 2024 Global Outlook.
- Includes the embodied emissions with power generation.
- Roger S Ballentine, The unusual suspects: are well-meaning environmental stakeholders and institutions undercutting the contributions that companies can make to fighting climate change?, Oxford Open Climate Change, Volume 3, Issue 1, 2023, kgad009, https://doi.org/10.1093/oxfclm/kgad009.
- Based on ExxonMobil analysis for power plant use including EIA U.S. electricity net generation and resulting CO2 emissions: https://www.eia.gov/tools/faqs/faq.php?id=74&t=11. Reductions may vary based on regional differences and other variables.
- We see the opportunity to help other essential industries and customers achieve their goals to lower emissions. Estimates of GHG emissions are on a life cycle basis and include avoided and abated emissions from hydrogen, lower emission fuels, and carbon capture and storage. For example, customers could avoid up to 25 MTA of their GHG emissions if all of ExxonMobil’s projected 2030 supply to the market of lower-emission fuels displaces conventional fuel refined from crude oil. Calculation is an ExxonMobil analysis illustrating the general benefits of lower-emission fuels based on estimated fuel carbon intensity (CI) from various third-party sources (such as Argonne National Labs’ GREET model) as compared against its conventional fuel alternate on a life cycle basis. Calculation is an estimate that represents a range of potential outcomes that are based on certain assumptions. Estimates are based on the potential implementation of projects or opportunities that are at various stages of maturity. Individual projects or opportunities may advance to a final investment decision by the company based on a number of factors, including availability of supportive policy and permitting, technology and infrastructure for cost-effective abatement, and alignment with our partners and other stakeholders. Actual avoided and abated emissions may differ.
- EPA’s greenhouse gas equivalencies calculator: Carbon dioxide or CO2 equivalent converted to a U.S. home’s electricity use for one year: https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator#results.
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ExxonMobil reported emissions, including reductions and avoidance performance data, are based on a combination of measured and estimated data. We assess our performance to support continuous improvement throughout the organization using our Environmental Performance Indicator (EPI) manual. The reporting guidelines and indicators in the Ipieca, the American Petroleum Institute (API), the International Association of Oil and Gas Producers Sustainability Reporting Guidance for the Oil and Gas Industry (4th edition, 2020, revised February 2023) and key chapters of the GHG Protocol inform the EPI and the selection of the data reported. Emissions reported are estimates only, and performance data depends on variations in processes and operations, the availability of sufficient data, the quality of those data and methodology used for measurement and estimation. Emissions data is subject to change as methods, data quality, and technology improvements occur, and changes to performance data may be updated. Emissions, reductions, abatements and enabled avoidance estimates for non-ExxonMobil operated facilities are included in the equity data and similarly may be updated as changes in the performance data are reported. ExxonMobil’s plans to reduce emissions are good-faith efforts based on current relevant data and methodology, which could be changed or refined. ExxonMobil works to continuously improve its approach to estimate, detect, measure, and address emissions. ExxonMobil actively engages with industry, including API and Ipieca, to improve emission factors and methodologies, including measurements and estimates.
Any reference to ExxonMobil’s support of, work with, or collaboration with a third-party organization within these publications do not constitute or imply an endorsement by ExxonMobil of any or all of the positions or activities of such organization. ExxonMobil participates, along with other companies, institutes, universities and other organizations, in various initiatives, campaigns, projects, groups, trade organizations, and other collaborations among industry and through organizations like the United Nations that express various ambitions, aspirations and goals related to climate change, emissions, sustainability, and the energy transition. ExxonMobil’s participation or membership in such collaborations is not a promise or guarantee that ExxonMobil’s individual ambitions, future performance or policies will align with the collective ambitions of the organizations or the individual ambitions of other participants, all of which are subject to a variety of uncertainties and other factors, many of which may be beyond ExxonMobil’s control, including government regulation, availability and cost-effectiveness of technologies, and market forces and other risks and uncertainties. Such third parties’ statements of collaborative or individual ambitions and goals frequently diverge from ExxonMobil’s own ambitions, plans, goals, and commitments. ExxonMobil will continue to make independent decisions regarding the operation of its business, including its climate-related and sustainability-related ambitions, plans, goals, commitments, and investments. ExxonMobil’s future ambitions, goals and commitments reflect ExxonMobil’s current plans, and ExxonMobil may unilaterally change them for various reasons, including adoption of new reporting standards or practices, market conditions; changes in its portfolio; and financial, operational, regulatory, reputational, legal and other factors.
References to “resources,” “resource base,” “recoverable resources” and similar terms refer to the total remaining estimated quantities of oil and natural gas that are expected to be ultimately recoverable. The resource base includes quantities of oil and natural gas classified as proved reserves, as well as quantities that are not yet classified as proved reserves, but that are expected to be ultimately recoverable. The term “resource base” is not intended to correspond to SEC definitions such as “probable” or “possible” reserves. For additional information, see the “Frequently Used Terms” on the Investors page of the Company’s website at www.exxonmobil.com under the header “Modeling Toolkit.” References to “oil” and “gas” include crude, natural gas liquids, bitumen, synthetic oil, and natural gas. The term “project” as used in these publications can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.
Exxon Mobil Corporation has numerous affiliates, many with names that include ExxonMobil, Exxon, Mobil, Esso, and XTO. For convenience and simplicity, those terms and terms such as “Corporation,” “company,” “our,” “we,” and “its” are sometimes used as abbreviated references to one or more specific affiliates or affiliate groups. Abbreviated references describing global or regional operational organizations, and global or regional business lines are also sometimes used for convenience and simplicity. Nothing contained herein is intended to override the corporate separateness of affiliated companies. Exxon Mobil Corporation’s goals do not guarantee any action or future performance by its affiliates or Exxon Mobil Corporation’s responsibility for those affiliates’ actions and future performance, each affiliate of which manages its own affairs. For convenience and simplicity, words like venture, joint venture, partnership, co-venturer and partner are used to indicate business relationships involving common activities and interests, and those words may not indicate precise legal relationships. These publications cover Exxon Mobil Corporation’s owned and operated businesses and do not address the performance or operations of our suppliers, contractors or partners unless otherwise noted. In the case of certain joint ventures for which ExxonMobil is the operator, we often exercise influence but not control. Thus, the governance, processes, management and strategy of these joint ventures may differ from those in these reports. At the time of publication, ExxonMobil has completed the acquisitions of Denbury Inc. and Pioneer Natural Resources Company. These reports and the data therein do not speak of these companies’ pre-acquisition governance, risk management, strategy approaches, or emissions or sustainability performance unless specifically referenced.
These reports or any material therein are not to be used or reproduced without the permission of Exxon Mobil Corporation. All rights reserved.
SUPPLEMENTAL INFORMATION FOR NON-GAAP AND OTHER MEASURES
The Positioned for Growth in a Lower-Emission Future section of the Advancing Climate Solutions Report mentions modeled operating cash flow in comparing different businesses over time in a future scenario. Historic operating cash flow is defined as net income, plus depreciation, depletion and amortization for consolidated and equity companies, plus noncash adjustments related to asset retirement obligations plus proceeds from asset sales. The Company’s long-term portfolio modeling estimates operating cash flow as revenue or margins less cash expenses, taxes and abandonment expenditures plus proceeds from asset sales before portfolio capital expenditures. The Company believes this measure can be helpful in assessing the resiliency of the business to generate cash from different potential future markets. The performance data presented in the Advancing Climate Solutions Report and Sustainability Report, including on emissions, is not financial data and is not GAAP data.
CAUTIONARY STATEMENT RELEVANT TO FORWARD LOOKING INFORMATION FOR THE PURPOSE OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER IMPORTANT LEGAL DISCLAIMERS
Images or statements of future ambitions, aims, aspirations, plans, goals, events, projects, projections, opportunities, expectations, performance, or conditions in the publications, including plans to reduce, abate, avoid or enable avoidance of emissions or reduce emissions intensity, sensitivity analyses, expectations, estimates, the development of future technologies, business plans, and sustainability efforts are dependent on future market factors, such as customer demand, continued technological progress, stable policy support and timely rule-making or continuation of government incentives and funding, and represent forward-looking statements. Similarly, emission-reduction roadmaps to drive toward net zero and similar roadmaps for emerging technologies and markets, and water management roadmaps to reduce freshwater intake and/or manage disposal, are forward-looking statements. These statements are not guarantees of future corporate, market or industry performance or outcomes for ExxonMobil or society and are subject to numerous risks and uncertainties, many of which are beyond our control or are even unknown.
Actual future results, including the achievement of ambitions to reach Scope 1 and 2 net zero from operated assets by 2050, to reach Scope 1 and 2 net zero in heritage Permian Basin unconventional operated assets by 2030, and in Pioneer Permian assets by 2035, to eliminate routine flaring in-line with World Bank Zero Routine Flaring, to reach near zero methane emissions from operated assets and other methane initiatives to meet ExxonMobil’s greenhouse gas emission reduction plans and goals, divestment and start-up plans, and associated project plans as well as technology advances, including in the timing and outcome of projects to capture, transport and store CO2, produce hydrogen and ammonia, produce lower-emission fuels, produce ProxximaTM systems, produce carbon materials, produce lithium, and use plastic waste as feedstock for advanced recycling; future debt levels and credit ratings; business and project plans, timing, costs, capacities and profitability; resource recoveries and production rates; planned Denbury and Pioneer integrated benefits; obtain data on detection, measurement and quantification of emissions including reporting of that data or updates to previous estimates and progress in sustainability focus areas could vary depending on a number of factors, including global or regional changes in oil, gas, petrochemicals, or feedstock prices, differentials, seasonal fluctuations, or other market or economic conditions affecting the oil, gas, and petrochemical industries and the demand for our products; new market products and services; future cash flows; our ability to execute operational objectives on a timely and successful basis; the ability to realize efficiencies within and across our business lines; new or changing government policies for lower carbon and new market investment opportunities, or policies limiting the attractiveness of investments such as European taxes on energy and unequal support for different methods of carbon capture; developments or changes in local, national, or international treaties, laws, regulations, taxes, trade sanctions, trade tariffs, and incentives affecting our business, including those related to greenhouse gas emissions, plastics, carbon storage and carbon costs; timely granting of governmental permits and certifications; uncertain impacts of deregulation on the legal and regulatory environment; evolving reporting standards for these topics and evolving measurement standards for reported data; trade patterns and the development and enforcement of local, national and regional mandates; unforeseen technical or operational difficulties; the outcome of research efforts and future technology developments, including the ability to scale projects and technologies such as electrification of operations, advanced recycling, carbon capture and storage, hydrogen and ammonia production, ProxximaTM systems, carbon materials or direct lithium extraction on a commercially competitive basis; the development and competitiveness of alternative energy and emission reduction technologies; unforeseen technical or operating difficulties, including the need for unplanned maintenance; availability of feedstocks for lower-emission fuels, hydrogen, or advanced recycling; changes in the relative energy mix across activities and geographies; the actions of co-venturers competitors; changes in regional and global economic growth rates and consumer preferences including willingness and ability to pay for reduced emissions products; actions taken by governments and consumers resulting from a pandemic; changes in population growth, economic development or migration patterns; timely completion of construction projects; war, civil unrest, attacks against the Company or industry, and other political or security disturbances, including disruption of land or sea transportation routes; decoupling of economies, realignment of global trade and supply chain networks, and disruptions in military alliances; and other factors discussed here and in Item 1A. Risk Factors of our Annual Report on Form 10-K and under the heading “Factors affecting future results” available under the “Earnings” tab through the “Investors” page of our website at www.exxonmobil.com. The Advancing Climate Solutions Report includes 2024 greenhouse gas emissions performance data as of March 1, 2025, and Scope 3 Category 11 estimates for full year 2024 as of February 19, 2025. The greenhouse gas intensity and greenhouse gas emission estimates include Scope 2 market-based emissions. The Sustainability Report, the Advancing Climate Solutions Report, and corresponding Executive Summaries were issued on April 30, 2025. The content and data referenced in these publications focus primarily on our operations from Jan. 1, 2024 – Dec. 31, 2024, unless otherwise indicated. Tables on our “Metrics and data” page were updated to reflect full year 2024 data. Information regarding some known events or activities in 2025 and historical initiatives from prior years are also included. No party should place undue reliance on these forward-looking statements, which speak only as of the dates of these publications. All forward-looking statements are based on management’s knowledge and reasonable expectations at the time of publication. ExxonMobil assumes no duty to update these statements or materials as of any future date, and neither future distribution of this material nor the continued availability of this material in archive form on our website should be deemed to constitute an update or re-affirmation of these figures or statements as of any future date. Any future update will be provided only through a public disclosure indicating that fact.
See “ABOUT THE ADVANCING CLIMATE SOLUTIONS AND SUSTAINABILITY REPORTS” at the end of this document for additional information on these reports and the use of non-GAAP and other financial measures.
ABOUT THE ADVANCING CLIMATE SOLUTIONS AND SUSTAINABILITY REPORTS
The Advancing Climate Solutions Report contains terms used by the TCFD, as well as information about how the disclosures in this report are consistent with the recommendations of the TCFD. In doing so, ExxonMobil is not obligating itself to use any terms in the way defined by the TCFD or any other party, nor is it obligating itself to comply with any specific recommendation of the TCFD or to provide any specific disclosure. For example, with respect to the term “material,” individual companies are best suited to determine what information is material, under the long-standing U.S. Supreme Court definition, and whether to include this information in U.S. Securities and Exchange Act filings. In addition, the ISSB is evaluating standards that provide their interpretation of TCFD which may or may not be consistent with the current TCFD recommendations. The Sustainability Report and Advancing Climate Solutions Report are each a voluntary disclosure and are not designed to fulfill any U.S., foreign, or third-party required reporting framework.
Forward-looking and other statements regarding environmental and other sustainability efforts and aspirations are not intended to communicate any material investment information under the laws of the United States or represent that these are required disclosures. These publications are not intended to imply that ExxonMobil has access to any significant non-public insights on future events that the reader could not independently research. In addition, historical, current, and forward-looking environmental and other sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future, including future laws and rulemaking. Forward-looking and other statements regarding environmental and other sustainability efforts and aspirations are for informational purposes only and are not intended as an advertisement for ExxonMobil’s equity, debt, businesses, products, or services and the reader is specifically notified that any investor-requested disclosure or future required disclosure is not and should not be construed as an inducement for the reader to purchase any product or services. The statements and analysis in these publications represent a good faith effort by the Company to address these investor requests despite significant unknown variables and, at times, inconsistent market data, government policy signals, and calculation, methodologies, or reporting standards.
Actions needed to advance ExxonMobil’s 2030 greenhouse gas emission-reductions plans are incorporated into its medium-term business plans, which are updated annually. The reference case for planning beyond 2030 is based on the Company’s Global Outlook research and publication. The Global Outlook is reflective of the existing global policy environment and an assumption of increasing policy stringency and technology improvement to 2050. However, the Global Outlook does not attempt to project the degree of required future policy and technology advancement and deployment for the world, or ExxonMobil, to meet net zero by 2050. As future policies and technology advancements emerge, they will be incorporated into the GIobal Outlook, and the Company’s business plans will be updated as appropriate. References to projects or opportunities may not reflect investment decisions made by the corporation or its affiliates. Individual projects or opportunities may advance based on a number of factors, including availability of stable and supportive policy, permitting, technological advancement for cost-effective abatement, insights from the Company planning process, and alignment with our partners and other stakeholders. Capital investment guidance in lower-emission and other new investments is based on our corporate plan; however, actual investment levels will be subject to the availability of the opportunity set, stable public policy support, other factors, and focused on returns.
Energy demand modeling aims to replicate system dynamics of the global energy system, requiring simplifications. The reference to any scenario or any pathway for an energy transition, including any potential net-zero scenario, does not imply ExxonMobil views any particular scenario as likely to occur. In addition, energy demand scenarios require assumptions on a variety of parameters. As such, the outcome of any given scenario using an energy demand model comes with a high degree of uncertainty. For example, the IEA describes its NZE scenario as extremely challenging, requiring unprecedented innovation, unprecedented international cooperation, and sustained support and participation from consumers, with steeper reductions required each year since the scenario’s initial release. Third-party scenarios discussed in these reports reflect the modeling assumptions and outputs of their respective authors, not ExxonMobil, and their use or inclusion herein is not an endorsement by ExxonMobil of their underlying assumptions, likelihood, or probability. Investment decisions are made on the basis of ExxonMobil’s separate planning process but may be secondarily tested for robustness or resiliency against different assumptions, including against various scenarios. These reports contain information from third parties. ExxonMobil makes no representation or warranty as to the third-party information. Where necessary, ExxonMobil received permission to cite third-party sources, but the information and data remain under the control and direction of the third parties. ExxonMobil has also provided links in this report to third-party websites for ease of reference. ExxonMobil’s use of the third-party content is not an endorsement or adoption of such information.
ExxonMobil reported emissions, including reductions and avoidance performance data, are based on a combination of measured and estimated data. We assess our performance to support continuous improvement throughout the organization using our Environmental Performance Indicator (EPI) manual. The reporting guidelines and indicators in the Ipieca, the American Petroleum Institute (API), the International Association of Oil and Gas Producers Sustainability Reporting Guidance for the Oil and Gas Industry (4th edition, 2020, revised February 2023) and key chapters of the GHG Protocol inform the EPI and the selection of the data reported. Emissions reported are estimates only, and performance data depends on variations in processes and operations, the availability of sufficient data, the quality of those data and methodology used for measurement and estimation. Emissions data is subject to change as methods, data quality, and technology improvements occur, and changes to performance data may be updated. Emissions, reductions, abatements and enabled avoidance estimates for non-ExxonMobil operated facilities are included in the equity data and similarly may be updated as changes in the performance data are reported. ExxonMobil’s plans to reduce emissions are good-faith efforts based on current relevant data and methodology, which could be changed or refined. ExxonMobil works to continuously improve its approach to estimate, detect, measure, and address emissions. ExxonMobil actively engages with industry, including API and Ipieca, to improve emission factors and methodologies, including measurements and estimates.
Any reference to ExxonMobil’s support of, work with, or collaboration with a third-party organization within these publications do not constitute or imply an endorsement by ExxonMobil of any or all of the positions or activities of such organization. ExxonMobil participates, along with other companies, institutes, universities and other organizations, in various initiatives, campaigns, projects, groups, trade organizations, and other collaborations among industry and through organizations like the United Nations that express various ambitions, aspirations and goals related to climate change, emissions, sustainability, and the energy transition. ExxonMobil’s participation or membership in such collaborations is not a promise or guarantee that ExxonMobil’s individual ambitions, future performance or policies will align with the collective ambitions of the organizations or the individual ambitions of other participants, all of which are subject to a variety of uncertainties and other factors, many of which may be beyond ExxonMobil’s control, including government regulation, availability and cost-effectiveness of technologies, and market forces and other risks and uncertainties. Such third parties’ statements of collaborative or individual ambitions and goals frequently diverge from ExxonMobil’s own ambitions, plans, goals, and commitments. ExxonMobil will continue to make independent decisions regarding the operation of its business, including its climate-related and sustainability-related ambitions, plans, goals, commitments, and investments. ExxonMobil’s future ambitions, goals and commitments reflect ExxonMobil’s current plans, and ExxonMobil may unilaterally change them for various reasons, including adoption of new reporting standards or practices, market conditions; changes in its portfolio; and financial, operational, regulatory, reputational, legal and other factors.
References to “resources,” “resource base,” “recoverable resources” and similar terms refer to the total remaining estimated quantities of oil and natural gas that are expected to be ultimately recoverable. The resource base includes quantities of oil and natural gas classified as proved reserves, as well as quantities that are not yet classified as proved reserves, but that are expected to be ultimately recoverable. The term “resource base” is not intended to correspond to SEC definitions such as “probable” or “possible” reserves. For additional information, see the “Frequently Used Terms” on the Investors page of the Company’s website at www.exxonmobil.com under the header “Modeling Toolkit.” References to “oil” and “gas” include crude, natural gas liquids, bitumen, synthetic oil, and natural gas. The term “project” as used in these publications can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.
Exxon Mobil Corporation has numerous affiliates, many with names that include ExxonMobil, Exxon, Mobil, Esso, and XTO. For convenience and simplicity, those terms and terms such as “Corporation,” “company,” “our,” “we,” and “its” are sometimes used as abbreviated references to one or more specific affiliates or affiliate groups. Abbreviated references describing global or regional operational organizations, and global or regional business lines are also sometimes used for convenience and simplicity. Nothing contained herein is intended to override the corporate separateness of affiliated companies. Exxon Mobil Corporation’s goals do not guarantee any action or future performance by its affiliates or Exxon Mobil Corporation’s responsibility for those affiliates’ actions and future performance, each affiliate of which manages its own affairs. For convenience and simplicity, words like venture, joint venture, partnership, co-venturer and partner are used to indicate business relationships involving common activities and interests, and those words may not indicate precise legal relationships. These publications cover Exxon Mobil Corporation’s owned and operated businesses and do not address the performance or operations of our suppliers, contractors or partners unless otherwise noted. In the case of certain joint ventures for which ExxonMobil is the operator, we often exercise influence but not control. Thus, the governance, processes, management and strategy of these joint ventures may differ from those in these reports. At the time of publication, ExxonMobil has completed the acquisitions of Denbury Inc. and Pioneer Natural Resources Company. These reports and the data therein do not speak of these companies’ pre-acquisition governance, risk management, strategy approaches, or emissions or sustainability performance unless specifically referenced.
These reports or any material therein are not to be used or reproduced without the permission of Exxon Mobil Corporation. All rights reserved.
SUPPLEMENTAL INFORMATION FOR NON-GAAP AND OTHER MEASURES
The Positioned for Growth in a Lower-Emission Future section of the Advancing Climate Solutions Report mentions modeled operating cash flow in comparing different businesses over time in a future scenario. Historic operating cash flow is defined as net income, plus depreciation, depletion and amortization for consolidated and equity companies, plus noncash adjustments related to asset retirement obligations plus proceeds from asset sales. The Company’s long-term portfolio modeling estimates operating cash flow as revenue or margins less cash expenses, taxes and abandonment expenditures plus proceeds from asset sales before portfolio capital expenditures. The Company believes this measure can be helpful in assessing the resiliency of the business to generate cash from different potential future markets. The performance data presented in the Advancing Climate Solutions Report and Sustainability Report, including on emissions, is not financial data and is not GAAP data.