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Aside from committing to the World Bank’s Zero Routine Flaring by 2030 Initiative, KMG has not set itself any emissions reduction targets. In the absence of emissions reduction targets, the level of the company’s climate ambition cannot be assessed. To demonstrate commitment to the low-carbon transition, KMG should set targets aligned with the company’s 1.5°C pathway to reduce its scope 1 and 2 and its scope 1, 2 and 3 emissions intensities. The company should set both short-term targets to drive ongoing accountability for managing emissions and long-term targets to guide strategic decisions.

KMG’s 2028 Development Strategy contains some low-carbon priority areas like emissions management, flaring reduction and energy efficiency. However, apart from the company’s commitment to the World Bank’s Zero Routine Flaring by 2030 Initiative, none of these priority areas are accompanied by measurable targets. The company acknowledges that its capital and operational investments will be impacted by the need for low-carbon innovation. However, it has not reported any low-carbon investment plans or low-carbon revenue streams. The company’s strategy continues to focus on fossil fuel growth, including growth in reserves, production, and gas exports to China.

Between 2014 and 2019, KMG’s sold fossil fuel products increased overall. The share of refined oil in the company’s sold product mix increased by nearly 25% across the period to account for about 68% of sold volumes in 2019. This has led to an increasing trend in the company’s scope 1, 2 and 3 emissions intensity and increased the company’s divergence from its 1.5°C pathway. The company needs to achieve an annual reduction of about 4% for its scope 1, 2 and 3 emissions intensity between 2019 and 2024 to align with its 1.5°C pathway. To achieve this, KMG will need to diversify its portfolio, which continues to be dominated by fossil fuels, to include a large share of low-carbon products.

KMG’s code of business conduct requires suppliers to comply with health, safety and environment (HSE) measures. In addition, KMG has started to create demand for low-carbon products within the supply chain by purchasing small amounts of renewable energy from third-party suppliers. In 2019, the company purchased 268,975 megawatt-hours (MWh) of renewable energy (nearly 6% of its purchased electricity that year). KMG should further increase the proportion of its renewable energy purchases and should expand its code of business conduct to focus its supplier engagement on climate change and emissions reductions. This will demonstrate the company’s commitment towards decarbonization throughout the production life cycle.

KMG has committed to the World Bank’s Zero Routine Flaring by 2030 Initiative, but it has not set itself any emissions reduction targets.

KMG has introduced technology for methane leak detection at its main gas assets. The company plans to reduce routine flaring through integrated gas treatment and is also using renewable energy sources to power some of its operations.

KMG has been investing small shares of capital in low-carbon and mitigation technologies including methane leak detection and repair, and smart systems management to improve energy efficiency. However, the company’s focus remains on expanding its oil and gas activities.

KMG’s increasing fossil fuel production and sales volumes between 2014 and 2019 have increased the company’s divergence from its 1.5°C pathway for scope 1 and 2 and scope 1, 2 and 3 emissions intensities.

KMG has no clear strategy to move away from oil and gas activities. The company has no emissions reduction targets and its low-carbon transition plan remains inadequate. KMG will have to make significant strategic and business model changes to align with its 1.5°C pathway.