Santos 

Santos has set targets to achieve a 26-30% reduction in its scope 1 and 2 emissions by 2030 and net-zero scope 1 and 2 emissions by 2040. These targets include an undisclosed quantity of nature-based offsets and could therefore not be assessed. Santos’ roadmap shows that it plans to achieve its targets through carbon capture and storage (CCS) for the vast part.
Santos can strengthen its targets by reducing its emissions solely through direct actions, rather than including nature-based offsets. Santos should also set specific targets to reduce its scope 1, 2 and 3 emissions intensity in order to achieve its aim to reduce customer emissions by at least one million tonnes per year by 2030.

Santos’ low-carbon transition relies on completing a CCS plant in the Cooper Basin in Australia. The plant is expected to capture 1.7 million tonnes of CO2 per year and produce blue hydrogen. The investment approval for the project is currently awaiting the Australian government’s decision on whether CCS projects can be used for Australian carbon credit units under the framework of the Australian government’s Clean Energy Regulator. Failure to realise this investment is a significant risk to Santos’ low-carbon transition plan, particularly as the company plans to increase hydrocarbon production to 120 million barrels of oil equivalent (MMboe) per year before 2030.

Santos is one of the few oil and gas companies that has publicly reviewed the alignment of trade associations with its own climate ambitions. The company claims that it uses its position in associations to evolve the association’s stance on climate change and policy. Despite this claim, Santos’ CEO holds the position of Chair in the Australian Petroleum Production and Exploration Association (APPEA), which has demonstrated a climate-negative stance. Santos can show leadership in this area by withdrawing from trade associations known for their negative stance on climate policy or by actively using its position in these associations to drive support for climate policy.

Santos has a low-carbon transition plan, which aims to achieve a 26-30% reduction in its scope 1 and 2 emissions intensity by 2030 compared to its 2019-2020 level, albeit using offsets. The plan also aims to achieve net-zero scope 1 and 2 emissions by 2040.

Santos intends to increase natural gas production while relying heavily on CCS. Santos’ 2030 emissions reduction target relies on the Moomba CCS Phase 1 project, supplemented by the use of renewable energy in production and nature-based offsets. By 2040, Santos plans to expand its CCS and ramp up production of blue hydrogen fuel.

The company’s investment strategy is focused on increasing natural gas production, while developing a large-scale CCS project. Before making a final investment decision in the project, Santos is awaiting the Australian government’s decision on whether CCS projects can be used for carbon credit units under the government’s Clean Energy Regulator framework.

Santos expressed support for the Paris Agreement’s aim of limiting global temperature rise to less than 2-degree Celsius. However, between 2014 and 2019, its production increased. With no significant shift in sold product mix, its scope 1, 2 and 3 emissions intensity is estimated to have remained flat, further diverting from its 1.5°C pathway.

Santos is planning to increase hydrocarbon production to 120 million barrels of oil equivalent (MMboe) per year before 2030. This places the company at risk of failing to achieve its net-zero commitment if it is unable to scale up its CCS and blue hydrogen production.