Baker Hughes Commits to Net-Zero by 2050

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As the global oil and gas industry faces pressure to ‘green’ their portfolios and business models, Baker Hughes has established a clear and measurable framework for implementing a company-wide – and industry-wide – clean energy transition. In July, the American international services provider released its 2020 Report on Corporate Responsibility, pledging support of the Paris Climate Agreement and delineating its strategy for achieving net-zero carbon emissions across Scopes 1 and 2 by 2050. Structured via nine key building blocks, the strategy centers on defining and operationalizing efforts for enterprise transformation, implementing a comprehensive, sustainable supply-chain framework, and continuing to innovate and advance research and development of low-carbon technologies.

Decarbonization Roadmap

As part of its roadmap, the company identified eight strategic pathways to decarbonization, divided into three primary scopes. Scopes 1 and 2 focus on improving internal processes in the short- to medium-term, from reducing emissions from the company’s own manufacturing, to increasing the proportion of renewable energy used in its electricity mix, to increasing electrification and low-carbon fueling of Baker Hughes’ vehicles and vessel fleet. Meanwhile, Scope 3 addresses external processes in the long-term, including reducing emissions from supply chain and sourcing activity, reducing emissions from third-party waste treatment and disposal; and reducing downstream emissions from customer use of Baker Hughes’ products and services.

Measurable Effect

So far, the policy has proven to have a measurable impact. According to Baker Hughes, it was able to decrease greenhouse gas emissions by 15% across Scopes 1 and 2 in 2020 alone. The company also invested $595 million in research and development and was awarded over 3,000 patents related to carbon capture and storage and hydrogen – two emerging technologies at the center of the global energy transition and efforts to reduce the release of CO2 from heavy-emitting industries. In the same year, the company expanded its low-carbon technology portfolio and prioritized net-zero investments under the umbrella of its corporate strategy.

“Last year was a period of challenge and change for the global business community, and the business case for sustainability as a core strategic focus has never been clearer,” noted Lorenzo Simonelli, Chairman and CEO of Baker Hughes. “Baker Hughes is guided by our corporate purpose and deeply committed to operating responsibly and sustainably – challenging ourselves to perform at the level of the most responsible companies in the world, not just in our industry.”

Baker Hughes is one of several international operators and service providers that have established a specific roadmap to net-zero emissions in the past 24 months – signaling a growing commitment from the oil and gas industry to augment accountability and achieve measurable reductions in carbon emissions. In June, oilfield service company Schlumberger announced its commitment to achieving net-zero emissions by 2050, targeting a 30% reduction in Scopes 1 and 2 by 2025. In February 2020, BP outlined its vision to ‘reimagine energy’ and eliminate 415 million tons of emissions from both its operations and the carbon content of its upstream production; In March 2020, Royal Dutch Shell made public its plans to become a net-zero business; and TotalEnergies aligned itself with European majors in May 2020, seeking net-zero emissions across all revenue streams.

Energy Capital & Power (ECP) – in partnership with the African Energy Chamber’s U.S.-Africa Committee – invites U.S. companies, investors and organizations to participate in the first-ever U.S.-Africa Energy Forum (USAEF) (December 9-10, 2021, Houston, Texas), introducing American companies to African opportunities. To learn more about how U.S. firms can advance the agenda of sustainable, long-term investment in African energy, please visit www.energycapitalpower.com. To sponsor, speak or attend USAEF 2021, please contact Senior Director James Chester at james@energycapitalpower.com

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Grace Goodrich

Grace Goodrich

Grace Goodrich is a Field Editor at ECP, where she writes about the intersection of energy, policy and global finance in sub-Saharan Africa's fastest-growing economies. Grace produces our Africa Energy Series investment reports in Angola and Equatorial Guinea (2019), as well as co-authored African Energy Chamber: Road to Recovery (2021).

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