Woodside scraps clean energy targets as windfall oil profits soar
Australia’s largest oil and gas producer has abandoned its long-term emissions goals and a $US5 billion clean energy investment pledge, citing slower-than-expected market development for lower-carbon technologies.
Woodside Energy has formally retired its long-term emissions and clean energy targets, a strategic pivot that follows a significant surge in profitability driven by global supply disruptions. The Perth-headquartered company, Australia’s largest oil and gas producer, reported a 27 per cent increase in sales profit to $1.67 billion ($A2.33 billion) for the six-month reporting period, according to financials lodged on Tuesday.
The profit boost was largely attributed to windfall gains from the Iran conflict, which sent crude oil prices soaring. Woodside indicated it expects further trading gains by redirecting barrels to markets currently paying premium prices for oil. This financial performance provides the backdrop for the company’s decision to scale back its commitments to decarbonisation.
Under new chief executive Liz Westcott, the company is shifting its focus back to fossil fuels while placing its US ammonia business under strategic review. The ammonia project had previously been described as one of Woodside’s highest potential options for decarbonising power sources. Westcott told analysts that the company would retire its scope 3 investment and abatement targets, which refer to emissions produced by its customers, arguing that these goals were established in a different market context.
Westcott stated that markets for emerging lower-carbon opportunities, including hydrogen, ammonia, and carbon capture and storage, have developed more slowly than anticipated. Consequently, the company said its new energy business would henceforth be guided by customer demand and commercial markets rather than fixed long-term targets.
The decision has drawn sharp criticism from climate campaigners. Sophie McNeill, the Greens (WA) spokesperson on climate change, said Woodside had given up any pretence of trying to reduce emissions. She noted that while climate scientists’ warnings are materialising, the company appears focused on maximising profits. Brett Morgan, investor campaigns manager at Market Forces, argued that major investors must respond by demanding an end to the company’s plan to expand fossil fuel operations.
The Conservation Council of Western Australia described the move as grossly negligent and a dereliction of its clean energy obligations. AustralianSuper, one of Woodside’s biggest shareholders, declined to comment on the changes. The announcement comes as recent deadly heatwaves in the northern hemisphere, attributed to fossil fuel emissions, increase pressure on oil and gas companies to shoulder environmental costs.
