Transferred Emissions are Still Emissions: Why Fossil Fuel Asset Sales Need Enhanced Transparency and Carbon Accounting
Jack Arnold, Martin Lockman, Perrine Toledano, Martin Deitrich Brauch, Shraman Sen, Michael Burger
In a widely reported trend, the “Oil Supermajors” — BP, Chevron, ConocoPhillips, Eni, ExxonMobil, Shell, and TotalEnergies — are selling off many upstream fossil fuel assets.
Selling these assets to entities that will continue producing and selling the fossil fuel resources does not necessarily reduce greenhouse gas emissions, but the supermajors have used these asset sales to support claims that they are making progress toward reaching net-zero greenhouse gas emissions.
Emissions reporting frameworks allow companies to conflate the apparent emissions reductions from asset sales with direct reductions from efficiency improvements and asset retirements. In doing so, they hinder the ability of investors and the public to push for actual emissions reductions. In addition, the companies that buy these assets are sometimes governed by less rigorous reporting requirements and subject to less public scrutiny than the supermajors, further removing the assets sold and their emissions from public scrutiny. It is crucial to track and monitor the emissions attributable to fossil fuel assets even after they are sold.
This report assesses the regulatory landscape governing the corporate disclosure of fossil fuel asset sales, outlines the scale of fossil fuel asset sales by the supermajors, and proposes regulatory reforms to enhance transparency around fossil fuel asset sales by oil and gas companies.