Major energy producers such as Shell have withdrawn from a prominent initiative aimed at establishing a global standard for “net-zero” emissions, after a draft proposal effectively called for banning the development of new oil and gas projects, according to documents reviewed by the Financial Times.
The departing companies include Shell, BP, Norway’s Aker BP, and Canada’s Enbridge, all of which exited an expert advisory group set up by the Science Based Targets initiative (SBTi). SBTi is a widely referenced climate standards body, whose certification is sought by global corporations like Apple and AstraZeneca.
This wave of withdrawals highlights rising tensions between the fossil fuel industry and evolving climate accountability frameworks.
Dispute Over New Oil and Gas Projects
The controversial draft outlined a ban on any new oil and gas project development by companies submitting climate plans to SBTi—either immediately or by 2027, whichever comes first. It also called for a sharp decline in fossil fuel production, sparking concerns across the energy sector that the proposed standards may impose an unworkable path to net-zero goals.
Shell, which had participated intermittently in SBTi processes since 2019, stated that it withdrew after determining the draft “does not reflect the industry’s perspective in any meaningful way.”
Nevertheless, Shell reiterated its commitment to reaching net-zero emissions by 2050, but emphasized that any credible standard must offer “sufficient flexibility” and reflect a “realistic pathway” for society.
Aker BP cited limited ability to influence the developing standard as the reason for its withdrawal, insisting it had “no bearing whatsoever” on its climate ambitions. Enbridge declined to comment, according to the FT.
SBTi Halts Work on Oil and Gas Standard
Following these high-profile exits, SBTi announced it had “temporarily paused” work on its oil and gas standard, citing “internal capacity considerations.”
However, the group denied that the decision was influenced by industry pressure, telling the Financial Times there was “no basis” for such claims.
Meanwhile, reports emerged that SBTi has also delayed and softened planned guidelines for financial institutions on fossil fuel financing.
According to informed sources, the deadline to restrict funding or insurance for companies developing new oil and gas projects was pushed from 2025 to 2030, after David Kennedy, a former EY partner, became SBTi’s executive director in March.
Growing Divide Between Industry and Climate Standards
These developments underscore a deepening divide between climate goals and industry realities. While fossil fuel combustion remains the leading cause of global warming—and scientists stress the need to cap temperature rises at 1.5°C to avoid irreversible catastrophe—the oil and gas industry remains wary of climate standards that effectively demand a halt to exploration and production, citing concerns over energy security, investor interests, and the global ability to meet demand during the energy transition.
A source involved in drafting the oil and gas and financial sector standards said: “The longer we delay, the more cover we give to Big Oil.”
Despite these disputes, Shell and other companies continue to publicly commit to achieving net-zero emissions by 2050. Yet the frameworks and standards that are supposed to clearly define what “net-zero” actually means remain mired in controversy.
