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Equinor Sets New Target to Cut Greenhouse Gas Emissions

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Equinor ASA (EQNR - Free Report) recently announced its strategy for a sustainable environment wherein the company is targeting net-zero greenhouse gas emissions by 2050 from its operated offshore and onshore fields in Norway.

The strategy is aimed at addressing climate change and creating high value with low carbon footprint. It will also provide this state-owned company with a competitive edge given the rising costs incurred from the effects of global warming.

While the company’s new target is to achieve 40% reduction in emissions by 2030, it is hopeful to attain 70% emission cut by 2040 and reach a near-zero level by 2050. So, the entity is making considerable investments in achieving this benchmark.

To meet this target, Equinor along with partners is gearing up for spending nearly $5.7 billion by 2030 to cut back carbon dioxide emissions by 8 million tonnes annually from 13 million tonnes in 2018 at Norway’s onshore and offshore plants.

Phase one of the strategy to trim 40% toxic emissions by 2030 will see adoption of large-scale industrial measures, comprising energy efficiency, digitalisation and the initiation of a number of electrification projects at major fields and plants. This initial phase will further include the Troll and Oseberg offshore fields and the Hammerfest LNG plant.

Depending on the soon-to-be-held developmental work on its well-defined projects together with several attempts of expanding the overall output by utilizing its existing fields, Equinor anticipates to reduce 50% of its Norwegian oil and gas production from the current levels by 2050.

Equinor intends to optimally employ its skills within innovation, technology and diversified industrial services to build viable value chains. The company is now chasing options in terms of offshore wind, carbon capture and storage and emissions-free hydrogen based on natural gas.

Last year, Equinortook a final investment decision (FID) to build floating turbines for generating power supply to oil platforms offshore Norway. This Norway-based player will invest almost $550 million (or 5 billion kroner) in the 88-megawatt (MW) Hywind Tampen offshore wind project, which is a first-of-its-kind initiative.

Through offshore installations of gas turbines, Equinor will be able to curtail carbon dioxide emissions by 200,000 meters annually. This initiative may play an important role in the energy transition toward more sustainable global energy supply.

Recently, another energy major Spain's Repsol, S.A. (REPYY - Free Report) announced its non-binding plan to lower net carbon emissions to null by 2050. The move, which complies with the Paris Agreement climate goals, marks its first such green effort in the oil and gas industry.

The company intends to slash the carbon intensity of its products instead of curbing emissions directly. It aims to decrease 10% intensity by 2025 and 20% in the next five years. In fact, carbon intensity is expected to fall 40% by 2040 and reach 100% cutback by 2050. Notably, Repsol expects to accomplish 70% of its reduction target through existing technologies.

Notably, Equinor engages in developing oil, gas, wind and solar energy projects and focuses on offshore operations as well as exploration services.

Zacks Rank & Key Picks

Equinor currently carries a Zacks Rank #3 (Hold). Two better-ranked players in the energy space are TC Energy Corporation (TRP - Free Report) and Suncor Energy Inc. (SU - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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