Origin Energy

Based on forward-looking projections of its assets, Origin is expected to reduce its emissions intensity by approximately 84% between 2022 and 2027, which is more than that required to align with its 1.5°C pathway during this period. This expected trend is likely due to the expedited closure of its last coal-fired power plant, Eraring Power Station. The company has committed to its early closure by 2025, seven years ahead of its previous target of 2032.

Origin Energy’s emissions intensity trend between 2018 and 2022 decreased by more than the rate of reduction required to align with its 1.5°C pathway between 2022 and 2027. In 2022, Origin purchased 22% of its sold electricity from third parties. Of this purchased electricity, 82% was from renewable power purchase agreements (PPAs). Between 2018 and 2022, Origin reduced its purchased gas for resale by over 50% and increased its renewable PPAs by 25% from 2,744 gigawatt-hours (GWh) in 2018 to 3,439 GWh in 2022.

Origin has a long-term ambition to achieve net-zero scope 1, 2 and 3 emissions by 2050. However, this ambition could not be scored in this benchmark assessment as it is not a committed target. Additionally, Origin should be aiming to reach net zero from electricity generation by 2035, which is consistent with the International Energy Agency’s (IEA)’s recommendation for electricity generation companies in advanced economies. Despite its target to increase its renewables capacity, Origin is currently heavily reliant on gas. Origin’s CEO and the Executive General Manager of Integrated Gas have outlined that gas will remain a core part of Origin’s business. However, to reach its climate targets, Origin will need to pull back from its commitment to gas.

Origin Energy is aiming to commence domestic renewable hydrogen supply from mid-2020. The company has been awarded USD 31 million from the Australian government to progress several renewable hydrogen projects, including the proposed Hunter Valley Hydrogen Hub, the Tasmanian Green Hydrogen Hub Project, and the potential development of a renewable hydrogen supply chain between Japan and Australia as a joint initiative with ENEOS. Although Origin’s hydrogen business model is currently at a nascent stage, hydrogen could be imperative for Origin to reach its climate targets and transition to a low-carbon economy.

Origin disclosed a capital expenditure (CapEx) spending of USD 332 million in 2022. Of this, 14.5% was spent on low-carbon technologies, including early-stage renewables and energy storage, battery development at its Eraring Power Station, and the Origin Zero customer platform. Of the remaining 85.5%, at least half was spent on the coal-based Eraring Power Station. Origin’s low-carbon CapEx share is well below the sectoral expectation that at least 77% of energy companies’ total CapEx should be dedicated to low-carbon technologies. Origin should allocate significantly more of its CapEx to low-carbon activities rather than fossil-fuels.

Origin has a long-term ambition to achieve net-zero scope 1, 2 and 3 emissions by 2050. It also has a mid-term 2030 target to reduce its scope 1, 2 and 3 equity emissions intensity by 40% compared to 2019. Further, it has a short-term target to reduce its scope 1 emissions by a cumulative 8 million tCO2e during the period 2021-2023, compared to 2017. In 2022, Origin announced its ambition to cease coal-fired generation at Eraring Power Station, its last remaining coal-fired plant, as early as 2025.

Origin has a comprehensive transition plan which includes emissions reduction targets for its scope 1, 2 and 3 emissions and a central ambition to become net zero by 2050. In 2022, Origin published its first climate transition plan. Origin is focused on growing its renewables portfolio and plans to increase its renewable energy generation to 4 GW by 2030, from 1.6 GW in 2022. However, Origin lacks detail on its long-term actions towards reaching net zero by 2050. In 2020, Origin acquired a 20% share in Octopus Energy, UK-based energy and software provider, and its digital customer platform, Kraken, which aims to help customers improve their energy efficiency.

Origin has accelerated the closure of its Eraring coal power site as early as 2025. To replace coal generation at Eraring, Origin is progressing plans for a 700 megawatt (MW) battery energy storage system. Despite committing to a coal phase-out, Origin has not developed clear plans to close its remaining fossil fuel plants. As of 2023, Origin has completed the sale of its exploration interests in two shale gas projects, Beetaloo and the Canning Basin. In 2022, Origin installed over 7,800 solar photovoltaic (PV) systems, covering 602,000 Origin customers.

Origin has recently acquired three new solar farms and is looking to develop two more. Between 2018 and 2022, Origin increased its purchased renewables by 25% and reduced its gas purchases by 50%. However, coal and gas generation remain the most significant part of Origin’s internal energy generation portfolio.

Origin has the long-term ambition to achieve net-zero scope 1, 2 and 3 emissions by 2050. However, its continued reliance on gas will affect its ability to reach this target. Origin undermines its transition planning by using the word “ambition” instead of clearly setting out a science-based target. The company is predicted to exceed its 1.5°C carbon budget between 2022 and 2037. The company is also a member of two trade associations that are found to take a negative stance on climate policy, the Australian Petroleum Production and Exploration Asscociation and the Australian Industry Greenhouse Network; Origin’s CEO is the director of the former.

The company commits to engaging in social dialogue with workers and unions. It also discloses the categories of stakeholders it engages with on a just transition, including employees, contractors and suppliers, government, industry, and media. Furthermore, the company demonstrates ongoing social dialogue and meaningful engagement with affected stakeholders, through its transition consultation committee during the closure of power stations. The company incorporates social dialogue and stakeholder engagement in its just transition planning. While the company has time-bound indicators to mitigate the social impacts of the transition on affected stakeholders, no evidence that it has indicators on workers and its business relationships.

The company has a commitment to create and support access to green and decent jobs as part of the low-carbon transition. The company also discloses the measures it takes to ensure that these jobs embed equality of opportunity for women and vulnerable groups. It does this through its career trackers program which supports indigenous and women employment. However, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company has a commitment to re- and up-skill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. For instance, it provides its employees with opportunities for learning, developing new skills, growing personal networks, and experiencing different parts of its business. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders.

The company contributes to the social protection of workers and affected stakeholders. It has a people transition strategy which provides health and wellbeing support as well as financial planning for its workers, and the company has set up community fund for affected stakeholders. However, no relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

While the company commits to respecting human rights and the ILO fundamental rights at work, no evidence that it expects its business relationships to respect the ILO fundamental rights at work. No evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and supply chain. No evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. No evidence was found of a time-bound target for paying all workers a living wage. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company’s required working hours. The company discloses the gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. No evidence was found that the company commits to gender equality and women’s empowerment.

The company commits to protecting personal data. There is also evidence available on the privacy statement regarding the collection, sharing and access to personal data. No relevant disclosure was found of the company’s global tax strategy and the corporate income tax paid for each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. However, no evidence that the company has a lobbying and political engagement policy, nor does it specify that it does not make political contributions. No relevant disclosure was found of the company’s expenditure on lobbying activities.