Petrobras
Petrobras has committed to net zero emissions by 2050. The carbon-neutral target applies to its Scope 1 and 2 operations. Petrobras' public-private structure means that it will face closer scrutiny over its emissions than other national oil firms.
Petrobras has the most complicated and lengthy sustainability report of all energy majors, which convolutes any information they try to convey. They seem to adhere to the belief “if you can’t convince them, confuse them”.
What can be understood is that one of the main mechanisms that Petrobras plans to use to reduce its carbon footprint is increased CO2 injection (Carbon Capture and Storage). Petrobras claims that they operated the largest CCS project in the world in 2020. In addition, Petrobras is in a key position for the development of new generation of biofuels, including HVO, and is investing roughly $600 million.
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Sustainability Report
About Company
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Petrobras It is targeting a 25% reduction in emissions by 2030, according to its 2020 sustainability report. Other targets are very specifically defined for upstream and refining segments, which are in a similar order of magnitude.
Petrobras committed to investing $1.8bn to reduce its carbon footprint in 2021-2025 in its most recent five-year plan, issued in November 2021. In addition, they committed to the creation of a $248 million decarbonization fund (see carbon pricing).
According to Petrobras, two out of three metrics that are used for the variable compensation of employees (IAGEE, VAZO and Delta EVA®) are correlated to environmental and sustainability goals. These are the goals regarding greenhouse gases (IAGEE) and oil and oil product leaks (VAZO). That means incentives are in place for employees to follow the targets.
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Petrobras states the creation of an internal decarbonization fund for which $248 million is reserved. Details are limited, but this fund is intended to incentivize the development of solutions, studies and implementation of additional projects that mitigate carbon emissions. It is unknown if the funds are provided by an internal carbon tax scheme.
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No shore power projects have been identified.
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Petrobras plans to produce more advanced biofuels, including bio-jet fuel and renewable diesel. In addition, research and development is performed on biobunker fuel. Total CAPEX investments are $600 million. Details on the plans, this investment or roll-out of which types of biofuels are produced in the coming years could not be found.
While Petrobras has divested conventional biofuel assets, it is evaluating investments in greenfield bio-kerosine projects, as well as the construction of dedicated co-processed green diesel refineries.
The company concluded refinery tests on its patented hydrotreated vegetable oil (HVO) production technology last year. The co-processed fuel uses up to 10% vegetable oils to produce a drop-in fuel that is chemically identical to petroleum diesel. Petrobras’ HVO diesel reduces emissions by 70% compared with conventional diesel and by 15% compared with biodiesel, according to company data.
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Available soon
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One of the main mechanisms that Petrobras plans to use to reduce its carbon footprint is increased CO2 injection. The goal is to capture and store 40 million tonnes of CO2 by 2025, which the firm says is equal to 18% of global carbon capture and storage. It reinjected 7 million tonnes of CO2 last year. Petrobras claims that they operated the largest CCS project in the world in 2020, in terms of annual injection, according to the Global Status of CCUS 2021 report.
Petrobras is also testing a system that would separate and reinject CO2 at the wellhead, which would significantly reduce costs.
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Petrobras is a member of the Carbon Sequestration Leadership Forum (CSLF). Other activities with respect to offsetting and sequestration could not be identified from their sustainability report.
In order to increase the company's socio-environmental investment in natural climate solutions (NCS) with a focus on forest restoration, we intend to increase our investments in projects aimed at forest restoration of native species in Brazilian biomes by approximately BRL 50 million, which contribute to carbon sequestration and fixation, and to avoid greenhouse gas emissions. The investment, scheduled for the next five years, is part of the Floresta Viva initiative, launched by the National Bank for Economic and Social Development (BNDES) during the forum “Strengthening the Forest Agenda”, held at the United Nations Conference on climate change – COP-26, in Glasgow, which was attended by Petrobras.
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Petrobras boosts an incredibly complete and vast overview of all associations on page 87-89 of their 2021 sustainability report. These include a mix of oil and gas related institutes, chemical and petrochemical associations, as well as initiatives with NGOs. Most noticeable partnerships include:
International Association of Oil and Gas Producers (IOGP)
American Petroleum Institute (API)
IPIECA – The global oil and gas industry association for advancing environmental and social performance
CDP Benchmark Club
World Economic Forum
Carbon Sequestration Leadership Forum (CSLF)
Furthermore, Petrobras claims that “by establishing partnerships with institutions that protect marine and coastal fauna, we contribute to the improvement of the preservation status of these species and increase the involvement of the local community for the preservation of biodiversity. The projects we support also benefit our stakeholders, such as traditional communities, particularly artisanal fishermen, helping to preserve the environment on which they depend and improve living conditions, including in the places where we operate.”
No further reference of the marine partners or projects is provided.
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The Board of Directors has six Statutory Advisory Committees, with specific attributions of analysis and recommendation on certain matters, linked directly to the Board, and the Safety, Environment and Health Committee (CSMS) advises on the establishment of policies and guidelines related to the management HSE strategy, climate change, transition to a low carbon economy, social responsibility, among other subjects. The composition and rules of operation of the committees are governed by regulations approved by the Board.
The decision-making process at Petrobras is extremely complex, involving seven executive management areas, multiple committees and an intricate ‘unfolding of responsibility hierarchies’ of several layers of executive management from the Executive Board and Board of Directors. No exact guidance for Petrobras can be provided on this level.
The lack of clarity is indicative of the alleged malpractices at Petrobras, as illustrated by operation Car Wash.
Frequently Asked Questions
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