Global net zero targets at risk due to scarcity of fossil fuel phase-out plans

News from COP28 - the status of fossil fuel phase-out commitments across nations, regions, cities, and companies with net zero targets

4 DEC 2023

Watch a replay of the Net Zero Tracker UNFCCC press conference here.

Monday 4th December 2023:

  • National net zero targets cover 88% of global GHG emissions, but only 7% of those emissions are covered by any kind of national commitment to phase-out exploration, production or use of coal, oil or gas. In total, 13% have pledged a full phase-out of any fossil fuel.

  • 94% of oil-producing countries have not set an oil exploration phase-out pledge, with a similar number (95%) failing to commit to phase-out gas exploration.

  • The striking lack of phase-out plans contradicts the IEA’s Net Zero Roadmap pathway, which says that no “new long-lead-time upstream oil and gas projects are needed” if clean energy is scaled up to its potential. Under current policies, the IEA forecasts that demand for fossil fuels will peak by 2030.

  • Phase-out leaders are emerging:
    • More than half (56%) of publicly listed companies engaged in coal production have a full or partial coal production phase-out pledge (fn 1).

    • Firms representing 18% of the combined revenue of the world’s largest publicly-listed companies have a full or partial phase out pledge, relating to either exploration, production or use of coal, oil and/or gas.

  • Net Zero Tracker calls for leaders at COP28 to “work with urgency towards ending new exploration by oil and gas-producing countries and companies.”

COP28, 4th December 2023: Most national net zero targets, which now cover 88% of global greenhouse gas (GHG) emissions, are misaligned with clear scientific evidence and policy directives, as they do not include plans to phase out fossil fuels.

The first global benchmark of fossil fuel phase out plans, conducted by the Net Zero Tracker, covers commitments to phase-out the exploration, production and/or use of coal, oil or gas within the net zero pledges of the 1,525 entities (companies, cities, regions & countries) the Tracker identifies as having net zero targets of any kind.

The lack of phase out plans runs counter to the International Energy Agency (IEA)’s Net Zero pathway, which calls for no new fossil fuel development from now on, as coal, oil & gas must fall by 95%, 60% and 45%, respectively, by 2050 to keep the 1.5°C limit in range (fn 2). Contradictorily, the lack of plans is encouraging the expansion of fossil fuels, the study finds.

  • Only 13% of the countries with net zero targets (19/151) have at least one phase-out commitment relating to exploration, production or use of coal, oil or gas.

  • Those countries represent only 7% of global emissions, despite 88% of global GHG emissions (92% of global GDP) being covered by national net zero targets.

  • Only 6% of oil-producing countries with net zero targets (6/93) have committed to a full or partial oil exploration phase-out, with 5% of gas-producing countries with net zero targets (5/94) committing to the same for gas (fn 3).

  • Only 3% (2/63) of coal-producing countries that were assessed have set full or partial coal exploration phase-out pledges (fn 4).

The report shows that national net zero pledges - should be urgently updated to align with the UN Expert Group guideline that credible net zero pledges require specific targets for ending the use of and / or support for fossil fuels in line with the Intergovernmental Panel on Climate Change (IPCC) and IEA pathways.

Natasha Lutz, Co-Data Lead, Net Zero Tracker (University of Oxford), said:

Phasing-out fossil fuels is a key element of realising credible pathways to net-zero. A lack of commitment at the country level leaves the door open for fossil fuel expansion and is inconsistent with achieving the temperature goals set out by the Paris Agreement.

“This proliferation of net-zero ambition without the commitment towards fossil-fuel phase-out highlights the need for entities to determine how these targets will be achieved. A pledge without a plan for implementation is at risk of becoming a bumper-sticker; broadcasted but never taken seriously.”

Professor Thomas Hale, Blavatnik School of Government, University of Oxford, said:

"A net zero plan with no clarity on how you phase fossil fuels down and out is like a fad diet that lets you eat as much grease as you like. It won't work."

Future leaders of a fossil-free future are stepping up

Despite the widespread lack of country-level phase-out plans, the study indicates that a group of companies, cities, states and regions are emerging as the future leaders of a fossil- free future. Momentum is most evident in plans to phase-out coal exploration, even though, at a national level, only 2% of global coal production is covered by a full phase-out pledge.

  • 56% (145/259) of publicly listed companies with net zero targets that engage in (or facilitate) coal production have a full or partial coal production phase-out pledge (fn 5).

  • 30% of the regions with coal reserves (6/20) that have set net zero targets have set a full coal exploration phase-out target.

  • 18% of annual revenue of the world’s largest companies covered by net zero targets have a full or partial phase-out pledge relating to either exploration, production or use of coal, oil and/or gas.

Camilla Hyslop, Co-Data Lead, Net Zero Tracker (University of Oxford): said:

“The value of coal was the first to be eroded by cheap renewables, but as fossil free energy is cheaper everywhere, oil and gas will be usurped next. It’s a question of ‘when’, not ‘if.’

“But without setting a timeline to halt dirty energy, laggards will continue to expand the extraction, use and production of fossil fuels past the brink of environmental collapse, while dicing with the risk of stranded assets.”

Phase out impacts on global decarbonisation race - Europe in the vanguard, North America lags

Fossil fuel phase out plans, or lack thereof, stand to be an important factor in the global race to decarbonise, which regions are driving through net zero-supporting policies, such as the Inflation Reduction Act in the US, the Net Zero Industry Act in the EU, as shown in the corporate landscape.

The Role of a Fossil Fuel Non-Proliferation Treaty

The Fossil Fuel Non-Proliferation Treaty Initiative attended the NZT report launch. The Initiative represents a growing bloc of nation states that are spearheading the development of a Treaty to complement the Paris Agreement by halting new fossil fuel development; managing an equitable phase-out of fossil fuels; and laying the foundations for a global and just energy transition — in which no worker, community or country is left behind.

Building on support from Vanuatu, Tuvalu, Tonga, Fiji, the Solomon Islands, Niue, Antigua and Barbuda, Timor-Leste, and Palau, Colombia has just become the tenth country to formally join the bloc of nation states seeking a Fossil Fuel Non-Proliferation Treaty negotiating mandate. They are backed by thousands of scientists, over 2,200 organisations and institutions including the European Parliament, the WHO, and almost 100 cities and subnational governments globally.

Tzeporah Berman, Chair, Fossil Fuel Non-Proliferation Treaty Initiative, said:

“Net zero commitments should not be a haven for bad math and broken promises. This report lays bare the fallacy that net zero targets can be met while countries and companies continue to expand oil, gas and coal projects.”

Spain, Ørsted and Stockholm - leading the way

The NZT study recommends that countries, states and regions, cities and companies look to examples of emerging good practice. For example:

  • Spain has enshrined the phase-out of fossil fuels into law, targeting an end to production in Spanish territories before 2043. To ensure this, new permitting for exploration and production, as well as fossil fuels subsidies, have been halted.

  • Energy utility Ørsted, once heavily invested in, and reliant on, fossil fuels, has reinvented itself as a renewable energy company, with a target to phase out coal completely by 2024 (fn 6).

  • Stockholm aims to be fossil-free by 2040, as part of the Swedish capital’s ambition, the city-owned Stockholm Exergi closed the country’s final coal-fired power plant in 2020, thus shifting focus to phasing out oil and gas in the city (fn 7).

The study, entitled ‘In The Pipeline: Baselining what nations, regions, cities, and companies are doing on fossil fuel phase-outs’ has been produced using applicable entities from within the Net Zero Tracker database of 4,000 national and subnational governments and large, publicly-listed companies.

The full report can be found here.

Notes to editors:

Fn 1: Companies engaged in the process of extracting coal for processing, marketing and use, such as extracting coal from a mine for domestic use or export. Also included are firms that facilitate coal extraction through, eg., financing or provisioning of equipment.

Fn 2: IEA World Energy Outlook 2023.

Fn 3: Countries were considered to undertake oil exploration if they have issued or have publicly considered issuing oil exploration licences within their territory.

Fn 4: Countries were deemed to be coal producing if reflected as having produced coal in the most recent data for its country on the Statistical Review of World Energy.

Fn 5: Companies engaged in the process of extracting coal for processing, marketing and use, such as extracting coal from a mine for domestic use or export. Also included are firms that facilitate coal extraction through, eg., financing or provisioning of equipment.

About Net Zero Tracker (NZT):

Net Zero Tracker is the most comprehensive ‘living’ database of net zero commitments made by nations, states & regions, cities and major publicly-listed companies. It includes:

  • all UNFCCC member states and a selected number of territories;

  • subnational states and regions in the 25 largest emitting countries;9

  • all cities around the world with populations over 500,000;

  • Publicly-traded companies that were listed in the Forbes Global 2000 in 2020.10

Using a combination of automated web data-scraping and manual searching by volunteer data analysts working in a range of languages, the NZT gathers and collates data on the status of net zero targets and robustness parameters across 4000+ entities. Parameters include the existence of interim targets, intentions regarding offsetting, the existence of a published plan, and what the target covers in terms of GHGs and emission scopes.

NZT is an independent research consortium, comprising The Energy & Climate Intelligence Unit (ECIU); Data-Driven EnviroLab (UNC); NewClimate Institute; and Oxford Net Zero.



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