environmentlower carbon intensity of our operations
Our strategy is straightforward - we are leveraging our strengths to deliver lower carbon energy to a growing world. Our capabilities, assets and customers are distinct advantages. We are building on these strengths as we aim to lead in lower carbon intensity oil, products and natural gas and to advance new products and solutions that reduce the carbon emissions of major industries.
portfolio carbon intensity
We are utilizing a portfolio carbon intensity (PCI) metric that represents the carbon intensity across the full value chain associated with bringing products to market, including from use of sold products, a type of Scope 3 emissions. Our PCI target for 2028 sets more than a 5% reduction from 2016.
chevron PCI (scope 1, 2, and 3) reduction targets for 2028:
71 g CO2e/MJ >5% reduction for 2016
approach to lowering carbon intensity of our portfolio
We aspire to achieve net zero upstream emissions (scope 1 and 2) by 2050. Accomplishing this ambition depends on continuing progress on commercially viable technology; government policy; successful negotiations for carbon capture and storage (CCS) and nature-based projects; availability of cost-effective, verifiable offsets in the global market; and granting of necessary permits by governing authorities. We’re taking actions to reduce the carbon intensity of our portfolio.
marginal abatement cost curve
The approach we use to drive emissions reductions in our portfolio is the Marginal Abatement Cost Curve (MACC) process. Like supply stacks, MACCs can enable a visualization of abatement opportunities, showing their relative cost and abatement potential on a similar basis.
projects identified to reduce carbon intensity
planned carbon reduction projects spend
expected emissions reductions
We group reduction opportunities into the key areas of energy management; methane management, consisting of venting, fugitives, and flaring reductions; CCUS; and offsets.
greenhouse gas abatement projects
We have identified nearly 100 greenhouse gas (GHG) abatement projects to advance. In 2021, we made progress on 36 projects and completed five. We plan to spend more than $300 million on these projects in 2022 and approximately $2 billion on similar projects through 2028. When completed, the opportunities are expected to deliver approximately 4 million tonnes of emissions reductions per year. Beyond 2028, we have identified opportunities to potentially further lower our Upstream carbon intensity to the mid-teens, helping us get closer to our net zero Upstream aspiration.
Energy management emissions associated with our own energy use make up about 70% of our Scope 1 and Scope 2 emissions, which is why energy management is a key focus area for driving down emissions intensity. Aggregated at a corporate level, such projects contribute significant reduction opportunities.
Our strategy to deploy mature, renewable power generation solutions is focused and selective. We invest in wind and solar projects that have the greatest ability to cost-efficiently lower carbon emissions. We are increasing the use of renewables in a number of our products with the aim of reducing life cycle emissions, as well as working to provide verified, low-cost, high-quality offsets to our customers around the world in an effort to help them achieve their own lower carbon goals.
By sourcing more electricity from renewable sources, such as our 65 megawatt wind-power purchase agreement in the Permian Basin, we are switching to a lower carbon fuel source and working toward optimizing between purchased and self-generated power. These types of efforts can reduce the direct and indirect emissions associated with our operations and lower the overall life cycle carbon intensity of our products.
Energy storage is an important component to help address intermittency with renewable generation. By combining energy storage solutions with lower carbon fuel sources, we can lower the overall carbon intensity of our products.
Chevron believes that methane management is critical to a lower carbon future and that methane reductions are possible in the energy industry, and in other key sectors, through adoption of industry best practices, advancement in measurement technologies and methane regulations.
LNG carbon footprinting
This methodology has the potential to help advance a standard for GHG product-level accounting. The framework adheres to GHG protocols and lifecycle accounting standards, and is expected to enhance transparency, improve accuracy, and build stakeholder confidence in data reliability to help advance net zero ambitions.