Occidental Petroleum Corp: Disclosure of Carbon Offset Accounting

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 WHEREAS: As the window narrows to avoid the most damaging economic consequences of climate change, investors and experts, including the Science Based Targets initiative and CA100+, emphasize that companies must set and prioritize achieving near- and mid-term Paris-aligned emissions reductions across their operations and supply chains. While carbon offsets, including carbon sequestration technologies such as direct air capture (DAC), will play a necessary role in achieving global net zero by 2050 goals, they are not a replacement for actual, enterprise-wide emissions reductions.[1]

Occidental Petroleum aims to bring the world’s first commercial-scale DAC plant online in mid-2025.[2] The completion of this facility presents a unique set of risks and opportunities for the Company. Most notably, Occidental plans to generate environmental attribute certificates from its DAC business, either selling carbon credits in the voluntary carbon market, or using the sequestered carbon dioxide for enhanced oil recovery (EOR) and marketing the resulting product as “net zero oil.”[3] 

Accurate and transparent reporting regarding Occidental’s DAC is key to assuring credible progress toward the Company’s climate goals and avoiding claims of misleading climate accounting. Litigation over misleading offsetting claims is growing, underscoring the urgent need for reliable disclosures that avoid double counting concerns.[4]

Although Occidental discloses the technologies and processes used in the Company’s DAC, the Company’s current reporting raises concerns about how it will account for the emissions removals associated with its DAC operations. Occidental’s most recent sustainability report suggests that it intends to use DAC to offset the emissions from its own production and/or customer use of oil, while also selling carbon credits generated from the same discrete removals to other entities.[5] The potential for double counting emissions reductions associated with DAC raises serious reputational and legal concerns, and the Company’s current reporting does not provide investors with clear and transparent information about these risks. 

By transparently disclosing the accounting methods that it will use to quantify and claim carbon dioxide removals from the Company’s DAC facilities, Occidental Petroleum can mitigate the serious legal and regulatory risks associated with misleading and improper carbon removals claims and maximize the potential benefits of its leading role in the emerging DAC market.

BE IT RESOLVED: Shareholders request that the Board publicly disclose, at reasonable expense and omitting proprietary information, how the Company intends to account for carbon dioxide removals from direct air capture, including the generation and retirement of carbon credits, and the anticipated use of carbon removals in the Company’s emissions goals.

Resolution Details

Company: Occidental Petroleum Corp.

Lead Filers:
As You Sow

Year: 2025

Filing Date: 
November 2024

Initiative(s): Climate Accounting

Status: Filed

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