Saudi Aramco is a publicly listed fully integrated oil and gas company headquartered in Saudi Arabia, with 98.18% owned by government of Saudi Arabia. In 2020, it had USD 204.83 billion in revenue and a reported 70,000 employees*. Aramco is the world’s biggest oil producer and is also increasing its gas operations. Its 2019, its scope 1, 2 and 3 emissions were greater than Germany, France, Italy and Spain's combined emissions.
Aramco has set no emissions reduction targets, though it states a goal to “maintain the Kingdom’s crude oil upstream carbon intensity as among the lowest globally” and is a member of the World Bank’s Zero Routine Flaring by 2030 Initiative. To make these goals credible, Aramco should set a scope 1 and 2 emissions reduction target aligned with its 1.5°C pathway and ensure it covers emissions from all operations, and not just upstream emissions. It is also paramount that Aramco set a target that covers its scope 3 emissions, given scope 3 emissions accounted for nearly 87% of the company’s emissions in 2019.
Aramco’s absolute scope 1 and 2 emissions were estimated to be 12% higher in 2019 than in 2014, due to increased production and oil refining. Aramco’s scope 1 and 2 emissions intensity was estimated to have remained largely stable between 2014 and 2019. This business-as-usual pathway is inadequate, given Aramco’s 1.5°C pathway requires an annual decrease of nearly 9% in its scope 1 and 2 emission intensity.
Aramco’s strategy states that it aims “to grow its business sustainably by leveraging technology and innovation to lower its climate impact”. In 2019, the company invested USD 573 million in R&D. The company’s reporting states that it has R&D programmes dedicated to reducing emissions and developing novel carbon capture, use and storage (CCUS) technologies. However, it does not disclose on the proportion of its R&D spending that is dedicated to low-carbon and mitigation technologies. This undermines the credibility of its statements about using technology and innovation to lower its climate impact.
Aramco’s scope 1, 2 and 3 emissions intensity stayed largely stable between 2014 and 2019, with a marginal increase observed in 2018 and 2019. This was due to a slightly lower proportion of gas in the company’s product mix, which has a lower emissions intensity during the combustion phase, compared to crude oil and refined petroleum products.
The change in product mix, as well as increasing overall production volumes, also meant Aramco’s absolute scope 1, 2 and 3 emissions were nearly 10% higher in 2019 than in 2014. This increasing trend looks set to continue, with Aramco given a directive by the Saudi Ministry of Energy in March 2020 to increase its maximum sustainable capacity from 12 million barrels to 13 million barrels of oil per day.
Aramco is a member of several trade associations that are reported to have opposed climate policy. This includes the International Association of Oil & Gas Producers (IOGP), which has lobbied against the 100gCO2e/kWh rule for power generation in the EU Sustainable Finance Taxonomy. Through its USA subsidiary Motiva, Aramco is a member of the American Petroleum Institute (API) and the American Fuel & Petrochemical Manufacturers (AFPM). Motiva’s President and CEO sits on the board of AFPM, which funded opposition to a Washington State referendum to institute a carbon tax.
Aramco receives a trend score of -. If the company were reassessed in the near future, its score would likely decrease. Aramco increased its oil production between 2014 and 2019, leading to an increase of nearly 10% in its scope 1, 2 and 3 emissions. As the company has been directed to increase oil production capacity from 12 million barrels per day to 13 million barrels of day by the Saudi government, this trend looks set to continue. Aramco has no strategy to diversify into low-carbon business activities and has not even disclosed targets to reduce its scope 1 and 2 emissions.
Aramco has set no emissions reduction targets. It does have a goal to maintain its relatively low crude oil upstream carbon intensity and is committed to the World Bank’s Zero Routine Flaring by 2030 Initiative.
Aramco states it is developing technologies and processes to enable a circular carbon economy. However, it is does not disclose how much of its CapEx or R&D is dedicated to low-carbon technologies or CCUS technologies.
In its most 2020 annual report, Aramco started reporting scope 1 and 2 emissions for its operated assets and subsidiaries under operational control outside of Saudi Arabia. However, this reporting still excludes some of its majority-owned subsidiaries, such as S-Oil. The company does not report on its scope 3 emissions.