Statoil has been operating in a market where an external carbon price has existed since the early 1990s. Due to CO2 tax and other regulatory measures the oil and gas industry in Norway has adopted emission-reduction measures corresponding to more than five million tonnes of CO2 per annum since 1996. Consequently, Norwegian oil and gas production is in the global premier division for low GHG emissions and the average amount emitted per unit produced is about half the world average.
Statoil has built considerable internal capacity on carbon pricing, and actively updates its approach based on the emergence of carbon pricing in a number of markets. The company’s aim is to understand the carbon costs it will face in operating and reducing emissions in various markets around the world, as well as which impact these costs would have on stimulating fuel switching from coal to gas and development of low-carbon technologies.
Facing multiple carbon pricing policies, Statoil focuses on building energy market scenarios and carry out modelling to anticipate carbon price. Currently, the company applies a shadow price of $50 (in 2014 $) per MTCO2eq, applicable from 2020, in markets where an external carbon price is lower or does not exist. It applies the existing carbon price in markets where the price is greater than $50 per MTCO2eq. For example, Statoil assesses potential investments at the Norwegian continental shelf based on an explicit CO2 tax of 436 NOK per MTCO2eq (approx. $55 per MTCO2eq as of Oct 2017) and the EU Emissions Trading Scheme market price of approximately €7,8 per MTCO2eq (approx. $9,2 per MTCO2eq as of Oct 2017).
Statoil is actively advocating for carbon pricing. The company has for many years been calling for an ambitious EU climate target and significant strengthening of the EU ETS. Statoil is engaging with others, through coalitions such as the Carbon Pricing Leadership Coalition and the International Emissions Trading Association. These groups provide a platform for engaging in business-to-business and business-to-government dialogues. Statoil is also one of the six major oil and gas companies that sent a joint letter to the United Nations Framework Convention on Climate Change and French Government to initiate a dialogue on carbon pricing ahead of COP21 in Paris.
