Occidental was the first US-based international energy company to announce its ambition to achieve net zero GHG emissions associated with the use of its products by 2050, building on its 40-year history of using carbon dioxide in its oil recovery operations.
As part of that commitment, OLCV has been expanding its ability to capture man-made carbon dioxide emissions through partnerships and technology advancements. By identifying new ways of increasing energy efficiency and capturing and retiring more GHGs than its products create — and making the solutions available to others looking to do the same – OLCV is advancing the vision of a lower-carbon world.
Together, Macquarie and Occidental recognise the critical role technology will play in the decarbonisation of the petroleum industry and have partnered to deliver a first-of-its-kind energy project - the world’s first shipment of carbon-offset oil.
The carbon offsets were sourced from a variety of projects verified under the Verra Verified Carbon Standard, meeting eligibility criteria for the UN’s International Civil Aviation Organization’s (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). CORSIA’s eligibility criteria was used as a benchmark given ICAO’s recent review of the eligibility of offset types for inclusion in the scheme, the first of its type for an international body. Additionally, OLCV has a medium-term aspiration to use net zero oil to produce a CORSIA-compliant sustainable aviation fuel.
The volume of offsets applied against the cargo covered the expected GHG emissions from the entire crude lifecycle – including oil extraction, transport, storage, shipping, refining and eventual combustion.
The project leveraged Xpansiv, the first significant data and commodities platform that generates data on environmental factors to facilitate trading in sustainable commodities, in which both Occidental and Macquarie invested last year.
This project is the energy industry’s first major petroleum shipment for which GHG emissions associated with the entire crude lifecycle have been offset.
It is an immediate executable solution that helps promote investments in longer-term, industrial-scale decarbonisation strategies, and is a positive first step in the creation of a new market for climate-differentiated crude oil.
It also provides a bridge for OLCV to develop a further differentiated petroleum product, net zero oil, produced through direct air capture technology – extracting carbon dioxide directly from the air and removing it.
This transaction with Occidental is the first step in the creation of a new market for climate-differentiated crude oil. We see this as the beginning of an era where a premium will be paid for environmentally-differentiated commodities.”
Head of Commodity Financing, Commodities and Global Markets group