By Dieter Holger
Norwegian energy major Equinor ASA (EQNR.OS) said Thursday that it would reach carbon neutrality from its operations by 2030, boost renewable energy tenfold by 2026 and cut its carbon intensity by at least half by 2050.
"It is a good business strategy to ensure competitiveness and drive change towards a low carbon future," said Eldar Saetre, president and chief executive of Equinor, in prepared remarks.
The company said it aims to become a major generator of offshore wind energy with an overall renewable capacity of up to 6 gigawatts by 2026. Equinor expects to have an installed capacity of up to 16 gigawatts by 2035, but plans to still drive oil-and-gas revenue for investors.
"We will produce less oil in a low carbon future, but value creation from oil and gas will still be high," Mr. Saetre said, "and renewables give significant new opportunities to create attractive returns and growth."
The company's ambition to lower its carbon intensity--the measure of how much emissions are required for each unit of energy produced--would also take into account Scope 3 emissions for the first time, which are indirect emissions from products.
Equinor's move follows shareholder pressure to account for these emissions, an area that fellow European energy company Royal Dutch Shell PLC (RDSA.LN) has already pledged to address.
In May, a shareholder proposal that called on Equinor to set targets on its Scope 3 emissions earned 12% support from investors. At the time, Mr. Saetre said, "Scope 3 is not my responsibility."
Follow This, the environmental investor group that filed the resolution, welcomed the company's change of course.
"It seems Equinor got the message loud and clear," said Mark van Baal, founder of Follow This.
Still, Mr. van Baal cautioned that Equinor's new target would only result in an around 30% reduction of absolute emissions when accounting for growing energy demand.
"Nevertheless, today we applaud Elder Saetre's jump over his own shadow and will encourage Equinor to set the second and third step tomorrow," he said.
Write to Dieter Holger at firstname.lastname@example.org; @dieterholger
(END) Dow Jones Newswires
February 06, 2020 06:19 ET (11:19 GMT)Copyright (c) 2020 Dow Jones & Company, Inc.