One of Australia’s biggest corporate emitters, Origin Energy, has unveiled a plan to reach net-zero by 2050, starting with a goal to cut its emissions by 40 per cent by 2030 by quitting coal and ramping up investments in wind, solar and storage.
But the impressive looking Climate Action Transition Plan is already coming under fire for taking a leaf out of the Albanese government’s handbook and greenwashing gas out of its ambition to “lead the energy transition” – at least until 2030.
But first, the positives.
Origin says it will target a 20 million tonnes reduction in absolute Scope 1, 2 and 3 equity emissions by 2030, from a 2019 baseline – a goal it should mostly meet through its recent decision to bring forward the closure of its last coal plant, Eraring, as well as by building up to 4GW of renewable generation and storage capacity.
“The release of our first Climate Transition Action Plan is an important milestone for Origin, and we believe it articulates a clear, pragmatic and ambitious pathway to accelerate decarbonisation across our business and create value for shareholders,” said CEO Frank Calabria.
“We have set new emissions reduction targets, with our medium-term emissions intensity target and long-term ambition to be net zero emissions by 2050 consistent with the goals of the Paris Agreement, as set out in our CTAP.”
Indeed, considering Origin’s ranking as Australia’s fourth biggest corporate emitter, the establishment of a climate plan is a welcome development – and shareholders will have their say on that when it is submitted to a non-binding advisory vote at the 2022 AGM in October.
Unlike some major political parties in Australia, Origin is not afraid to hitch its wagon to both the Paris targets and, by association, to the science that is now shouting that “the world must pursue efforts to limit the global average temperature rise to 1.5°C above pre-industrial levels.”
That quote sits at the top of the list of “beliefs” Origin says have informed its view on the global and local energy transition, alongside affirmative statements on the inevitable electrification of almost everything, the importance of green hydrogen and the opportunities and challenges ahead.
It’s also – depressingly – impressive to see Origin include Scope 3 emissions in its workings; something that other fossil fuel-tethered companies like Santos do not acknowledge at all in their own climate plans.
“Recognising that a significant proportion of our emissions result from our customers’ use of the energy products we sell (Scope 3), our customers are a central part of our strategy and are captured within our medium-term targets and long-term ambition,” Origin says in its report.
Less impressive, however, is the footnote that: “Including these [Scope 3] emissions in the calculations should in no way be construed as an acceptance by Origin of responsibility for these emissions.”
And even less impressive is the further footnote that Origin’s 2030 target of a 40% reduction in Scope 1, 2 and 3 emissions does not include “potential future emissions from any development of new gas fields like the Beetaloo Basin.”
This makes the company’s seemingly ambitious 2030 emissions task a great deal less so, by removing any possible fugitive methane and operational emissions from those projects, as well as those pesky Scope 3s.
Origin’s justification for this is as follows:
“There has been no decision, nor are we close to a decision, on whether to develop the Beetaloo, Canning and Cooper Eromanga basins. Any potential future increase in gas production and sales is subject to exploration outcomes that remain highly uncertain and has not been included in our medium-term targets.
“The decision to develop new gas fields in these basins would only occur where it was consistent with our net zero emissions by 2050 ambition. We have previously announced that we are seeking to farm down our interest in the Beetaloo Basin and therefore Origin’s equity interest may change.”
By assuring us that any new gas development that is pursued will be consistent with the 2050 target, Origin is effectively kicking that particularly emissions-intensive can about 10 years down the road, well past the 2030 target – as well as flying in the face of the science it claims to accept.
Even the International Energy Agency has made it clear that to achieve net zero emissions by 2050 in the energy sector there must be no new oil, gas or coal developments – and that was more than a year ago.
For Origin, it should be relatively straight forward to meet the 40% by 2030 emissions reduction target, largely through the early shut down of Eraring, which the report cites as the “most significant step” it has taken towards decarbonisation.
According to Clean Energy Regulator data, Eraring averaged 13.9 million tonnes of Scope 1 and 2 emissions a year between 2015 and 2020, so that takes a big chunk out of the 20 million tonnes Origin aims to cut over the next seven-plus years.
But it cannot rest on those laurels. As the ITK Consulting report prepared for Lock The Gate put it in July of last year, “Origin can never claim to be decarbonising so long as gas and oil exploration is part of the strategy.
“No one that takes climate change seriously thinks gas is a transition pathway,” the report says.
Origin, however, like the Labor Albanese government, remains prepared to ignore this fact for the near term.
While the climate report says the gen-tailer believes demand for gas will “decline over time,” it also says it “will remain important to ensuring reliability of the energy system for many years.”
“We believe gas will remain a key part of Australia’s, and the world’s, energy mix for many years to come,” the report says.
“We will continue to run a leading gas business that is reliable, competitive, and focused on decarbonisation.”
Origin at least concedes that managing its Scope 3 emissions from its 27.5% equity share of Australia Pacific LNG (APLNG) will be “challenging,” and will require the support of the other shareholders – particularly considering the scope of operations is expected to grow.
But the company’s failure to factor in – at all – the emissions of proposed major gas exploration activities, like Beetaloo, has not escaped the attention of organisations like the Australasian Centre for Corporate Responsibility (ACCR), who are kept pretty busy these days addressing acts of corporate greenwash.
“In a feat of mental gymnastics, Origin claims the current and future emissions from its exploration activities don’t count, since they may not amount to anything,” said the ACCR’s climate lead Harriet Kater on Friday.
“If Origin was serious about limiting warming to 1.5°C, it would stop spending shareholder money on gas expansion.”
Kater also took a swipe at Ernst & Young, who signed off on Origin’s climate plan. “The role of auditors in facilitating potential greenwash must be addressed as a governance issue,” she said.
“It beggars belief that Origin thinks it can simply erase these predicted emissions from its climate plan, instead of providing modelled scenarios,” added Carmel Flint, the national coordinator at Lock the Gate Alliance.
“Origin needs to model the likely greenhouse emissions from opening new gasfields, not ignore them. Failing to include emissions from these gas basins falls dismally short on the transparency and credibility required by the global Say on Climate initiative, under which this plan was developed.”
