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The Guardian - AU
The Guardian - AU
Peter Hannam

Woodside’s latest report a ‘fail’ despite profit more than tripling, climate activists say

Woodside Burrup gas hub
Critics say projects such as the Woodside-led Burrup Gas Hub will produce as much as 6bn tonnes of carbon dioxide-equivalent pollution, or about 12 times Australia’s current annual emissions. Photograph: Greg Wood/AFP/Getty Images

Woodside faces more challenges of its climate stance at its upcoming shareholders gathering with activist groups dismissing its latest annual report as a “fail”.

The energy giant on Monday released its climate report 2022 while also revealing its underlying profit had more than tripled to US$5.2bn ($7.7bn). A 63% increase in energy prices to US$98.40 a barrel of oil equivalent in the wake of Russia’s invasion of Ukraine buoyed results that fell about 9% shy of investors’ expectations.

Climate activists, though, focused on meagre progress by the oil and gas producer on its pledges to reduce greenhouse gas emissions. Last May, 49% of shareholders rejected Woodside’s climate plan and climate groups will test sentiment at April’s annual general meeting of shareholders.

According to Woodside, the company would stick to its plan to cut so-called scope 1 emissions resulting from production of the fossil fuels 15% by 2025, compared with an average over 2016-20 that includes oil assets acquired from BHP last year. By 2030, the reduction should be 30%, with the company on an aspirational 2050 net-zero path.

“Woodside aims to thrive through the energy transition by building a low-cost, lower carbon, profitable, resilient and diversified portfolio,” the company said.

The company has also set aside US$5bn of “targeted investments in new energy products and lower carbon services by 2030” that are aimed at helping customers reduce the scope 3 emissions resulting from burning the oil and gas. As of the end of last year, Woodside had spent more than $100m of that total on ventures ranging from electrolysers to “carbon-to-products technology”.

The company also said it set an internal long-term “cost of carbon” at US$80 a tonne in determining priorities of pursuing emissions reduction projects. That tally was about four times the current price of Australian carbon credits, it said.

Woodside is already one of Australia’s largest greenhouse gas emitters. Critics say projects such as the Woodside-led Burrup Gas Hub will produce as much as 6bn tonnes of carbon dioxide-equivalent pollution, or about 12 times Australia’s current annual emissions.

Glenn Walker, head of Greenpeace Australia Pacific’s advocacy and strategy, said Woodside had made almost no progress on plans to reduce emissions.

“Woodside’s Climate Report is a schoolboy effort, essentially a rehash of its previous year’s plan that betrays the company’s lack of genuine commitment to emissions reduction,” Walker said. “Woodside is betting the farm on a fantasy future increase in gas use that is utterly at odds with modelling from credible energy analysts such as the International Energy Agency.”

Will van de Pol, acting executive director of Market Forces, said Woodside’s plans were “incompatible with a net zero emissions by 2050 pathway”.

“Woodside continues to promote a strategy that undermines climate action by paying big executive bonuses for increasing oil and gas production and progressing new oil and gas projects,” van de Pol said, adding Market Forces urged investors to vote for the “Capital Protection” shareholder resolution, vote against the company’s remuneration report and reject directors standing for reelection at the company’s AGM in April.

Alex Hillman, ACCR’s lead analyst, said fossil fuel companies like Woodside might have made “huge profits” in 2022 but such windfall gains would probably prove “short-lived” as energy markets accelerate their shift towards renewables.

“Today, Woodside remains stubbornly rusted on to its underwhelming 2021 climate plan, saying its ‘strategy remains consistent’,” Hillman said.

“Regardless of material investor concerns about the company’s overreliance on offsets, Woodside has confirmed it still plans to use offsets to meet 100% of its restated scope 1 emission reduction target,” Hillman said.

“Woodside’s directors have a tin ear on climate risk and it’s time they were called to account.”

As Woodside has stated it won’t provide shareholders with a second “Say on Climate” vote, investors would have no choice but to consider options for the standing management resolutions at the AGM, which include remuneration and director votes, the ACCR said.

Separately, the company said that while its profits had soared, so too had its payments in taxes and royalties. These more than tripled in the past year to A$2.7bn. and “are expected to again increase significantly in 2023”, Woodside’s chief executive, Meg O’Neill, said in a statement accompanying the results.

Woodside’s shares were about 1% higher for the day in mid-afternoon trading compared with a drop about 1.1% for the overall market.

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