Suncor Energy Inc. is a publicly listed integrated oil and gas company headquartered in Canada. In 2020, it had USD 24.66 billion in revenue and a reported 12,591 employees*. Suncor is one of world’s largest producers of oil sands. It has recently made a commitment to achieve net-zero scope 1 and 2 emissions by 2050, but its emissions reduction trend does not yet support this ambition.
Suncor has a target to reduce its scope 1 and 2 emissions intensity by 30% by 2030. However, there is a projected gap of 57% between Suncor’s targeted emissions reductions and what is required by its 1.5°C pathway. The company also has an objective to reach net-zero scope 1 and 2 emissions by 2050, however, it is unclear how it plans to achieve this and whether offsets will be used. The company can improve its ambition by setting clear intermediate targets to drive ongoing accountability for managing emissions. Further, Suncor needs to include scope 3 emissions in its targets, particularly as its locked-in scope 3 emissions from upstream activities alone are expected to exceed its 1.5°C carbon budget by 50% between 2019 and 2050.
Suncor plans to invest CAD 300 million (USD 226 million) in a 200 (megawatt) MW wind power project expected to be completed by 2022. However, this only represents approximately 7% of the company’s total capital expenditure (CapEx) planned for 2021. Suncor will also invest CAD 1.4 billion over an undisclosed time period to replace coke-fired boilers with natural gas-fired cogeneration units at its Oil Sands Base Plant, which will generate 880 MW of power. Although more efficient, natural gas power generation is not considered a viable low-carbon alternative in the long term. Moreover, the company’s planned CapEx is far below the sectoral expectation for oil and gas companies to direct 77% of CapEx towards non-fossil fuel and low-carbon technologies to be aligned with a 1.5°C scenario.
Suncor has conducted a climate scenario analysis using three scenarios until 2050 and a 2°C scenario until 2100. In the company’s 2°C scenario, which is the most ambitious of its four considered scenarios, changing conditions such as shifting energy mix and policies have been reviewed alongside the inclusion of a carbon price that increases to CAD 300 by 2100. The company qualitatively links the analysis to its current low-carbon transition plan, but it can improve by stating clear financial and long-term business impacts. Suncor can also develop a more ambitious analysis using a 1.5°C scenario for 2050, which will better prepare it for the low-carbon transition in the nearer term.
Suncor finances the development of sustainable biofuel by investing in partner companies. It has partnered with LanzaJet to build a demonstration renewable diesel plant and is investing in LanzaTech to produce biofuels from recycled waste gas, as well as in Enerkam to produce biofuels from household waste. The company reports that it may commit to be the first customer of these new technologies. The company can demonstrate climate leadership in this area by making an agreement for future purchases of products or equipment produced in these pilot projects to use in its own biofuel production activities.
Suncor publicly supports the Paris Agreement and regional climate policies, including low-carbon pricing mechanisms and fuel standards. However, its public stance is undermined by its position on the board of the Canadian Association of Petroleum Producers (CAPP), who lobbied to exclude upstream oil and gas from Canada’s Clean Fuels Standard and funded social media adverts attacking carbon pricing in the run-up to 2018 elections in Ontario. Suncor should define a clear position on climate change and develop a policy to review trade associations and withdraw from those associations that oppose climate policy.
Suncor receives a trend score of -. If the company were reassessed in the near future, its score would like decrease. Even if the company meets its target for a 30% reduction in its scope 1 and 2 emissions intensity by 2030, it is projected to fall short of what is required by its 1.5°C pathway. Further, its ambition to become reach net-zero emissions by 2050 does not include scope 3 emissions. Its plans to develop renewables and biofuel production will improve its alignment with its 1.5°C pathway, but they will need to be rapidly scaled up to replace fossil fuel production and achieve a low-carbon transition.
Suncor has implemented a low-carbon transition plan which targets a 30% reduction in its scope 1 and 2 emissions intensity by 2030 compared to 2014. It has also set an objective to achieve net-zero scope 1 and 2 emissions by 2050. However, the level of ambition of the company’s 2030 target does not align with its 1.5°C pathway.
Suncor’s transition plan focuses on improving energy efficiency, driving technology improvements, increasing natural gas and renewable power production and developing sustainable biofuels through collaboration with other companies.
Suncor is developing a 200 MW wind power project and progressing with plans to replace a coke-fired boiler with natural gas-fired cogeneration units. It has also invested in and partnered with other companies that are developing sustainable biofuels.
Suncor has developed eight wind power projects in the past. From these projects, it retains 111 MW of gross generating capacity. However, between 2014 and 2019, Suncor’s absolute emissions increased due to a 45% rise in its total fossil fuel production, with its oil sands production growing significantly by approximately 60%.
Suncor’s transition plan lacks the long-term targets and ambition to achieve its 1.5°C pathway. The company does not indicate plans to transition away from oil and gas in the future. The company needs to rapidly scale up the deployment of its renewable power projects and expand its sustainable biofuel production to reduce dependency on fossil fuel activities.