Ampol Limited

At the time of the performance assessment, Ampol had not set any emissions reduction targets. The company has since increased its climate ambition. However, by only targeting scope 1 and 2 emissions reductions, Ampol’s latest commitments overlook the company’s significant scope 3 emissions. The company’s substantial purchases from upstream suppliers and large downstream sales volumes, mean that scope 3 emissions account for the majority of its total emissions. Ampol should prioritise setting long-term and intermediate targets to reduce its scope 3 emissions in line with its 1.5°C pathway.

In 2019, Ampol did not disclose it capital expenditure (CapEx) towards low-carbon and mitigation technologies. The company’s latest reporting shows an improvement in its transparency, with Ampol disclosing planned investments of AUD100 million (USD 69 million) in low-carbon technologies by 2025. While this is an improvement, it still comprises a relatively low annual share of 7% compared to Ampol’s CapEx in 2019. The sectoral expectation for oil and gas companies is to invest 77% of CapEx in low-carbon projects to be aligned with a 1.5°C scenario; Ampol should commit to increasing its CapEx in line with this.

Production of refined oil products at Ampol’s Lytton refinery remained relatively constant between 2014 and 2019. However, the volume of Ampol’s refined petroleum products sourced from suppliers and sold to customers increased by more than 60%, leading to an upward trend in the company’s scope 1, 2 and 3 emissions intensity. Ampol needs to rapidly reverse this trend to deliver the 18% reduction required by its 1.5°C pathway by 2024.

Most of the petroleum products Ampol sells are sourced from suppliers rather than produced at its own operations. For instance, in 2019 almost75% of the products Ampol sold were purchased from suppliers. Despite the role that Ampol’s suppliers play in its business and its total emissions impact, the company has not set a strategy to engage them on climate-related issues or emissions reductions. The company’s latest reporting includes an intention to collaborate with its supply chain to achieve net-zero emissions, but this should be developed into a clear, results-driven strategy.

At the time of the performance assessment, Ampol did not have any measurable low-carbon commitments. The company has since committed to achieving net-zero scope 1 and 2 emissions by 2040, and has also set intermediate 2025 and 2030 targets for these emissions.

Ampol received investment from the Australian government to keep its Lytton refinery open until at least 2027. The company is making energy efficiency updates at the refinery and installing solar panels at many of its service stations. The company is working towards low-carbon business activities such as electric vehicle charging, energy storage and hydrogen production.

Ampol’s low-carbon business activities are still at an early stage. It has recently announced a collaboration with Tesla on electric vehicle charging and has committed to spending a minimum of AUD100 million (USD 69 million) on future energy and decarbonisation solutions by 2025, which equates to 7% compared to its total CapEx in 2019.

Between 2014 and 2019, Ampol’s fuel mix has remained constant resulting in no improvement to its scope 1 and 2 emissions intensities. Ampol’s increasing sales volumes of petroleum products across this period has led to the company increasingly diverging from with its 1.5°C pathway for scope 1, 2 and 3 emissions intensity.

Ampol’s new strategy shows the company is considering climate change more seriously in the context of its business. However, the lack of a scope 3 emissions target and limited CapEx for low-carbon technologies indicate the company will have to make a significant effort to align with its 1.5°C pathway.