Two fifths of oil and gas firms ‘have no net zero commitment’

A survey found 41% of companies in the north east of Scotland had not developed a specific net zero strategy.

Two fifths of oil and gas firms ‘have no net zero commitment’ iStock

Two fifths of companies working in the oil and gas sector in the north east of Scotland have not yet committed themselves to achieving net-zero emissions, a new report revealed.

A survey of firms in the sector by Aberdeen and Grampian Chamber of Commerce (AGCC) found while 20% of companies were looking to be carbon neutral by 2030, twice that number (41%) said they had “not developed a specific net zero or carbon reduction strategy”.

Martin Findlay, senior partner at KPMG in Aberdeen, said: “Two years ago, that figure might not have come as a surprise, but today it jars”.

Meanwhile, less than a quarter (23%) surveyed said they had been influenced by the COP26 climate change conference, which is currently taking place in Glasgow, in their efforts to be more environmentally friendly.

By the end of this decade, firms expect almost half (47%) of their business will come from outside of the oil and gas industry, up from just 21% at present.

But the Oil and Gas Transition Survey, carried out along with KPMG UK and economics experts at the Fraser of Allander Institute, also found that less than a quarter (24%) believe that Government support for the transition away from oil and gas is visible and accessible to their business.

Russell Borthwick, chief executive at AGCC, said the results of their latest research showed that “firms in the sector envisage the transition picking up pace rapidly over the next decade”.

He added: “The industry is clearly committed to taking a leading role in delivering the UK’s net-zero ambitions, with the majority of businesses committed to achieving net-zero. 30% of firms have set a clear target for doing so, which compares favourably with data on the wider Scottish economy.”

However, he said: “While companies in the sector are actively engaging in the transition, they are also facing some significant barriers.

“Firms are less confident about their ability to secure skilled talent in areas outside of oil and gas, and SMEs (small and medium sized enterprises) in the sector will require more support to identify and develop the skills they require to transform their own businesses.

“Only a quarter of companies stated that Government assistance to support them in making the transition was visible or accessible to their business.

“This underlines the importance of providing firms across the supply chain with the vital support they need to diversify into new activities and deliver a just transition”.

Mr Findlay said: “As we cautiously emerge from the pandemic, the direction of travel is clear amongst oil and gas companies who are gearing up for a decade of rapid sustainable transformation.”

He insisted: “Positively, most oil and gas firms are now doing far more than paying lip service to sustainability with the vast majority believing that strong sustainability credentials are critical to their long-term success.

“Despite this, two in five of those we surveyed have not committed to carbon neutral targets. Two years ago, that figure might not have come as a surprise, but today it jars.”

Mr Findlay said: “Without clear plans to transition to an integrated energy sector which involves oil and gas and renewables, with viable solutions on transportation and heating, many firms are now facing a clear fork in the road – evolve and thrive or be left behind.”

He said, however, it was “clear the industry is on the cusp of transformation, and with many businesses having already chosen their path – and heading towards a greener future”

But he said: “The question is how many more will follow and how quickly.”

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