Oxy Low Carbon Ventures (OLCV) claims to have delivered the energy industry’s first major petroleum shipment for which greenhouse gas (GHG) emissions associated with the entire crude lifecycle have been offset.
OLCV, a division of Occidental, announced the delivery of two million barrels of carbon-neutral oil to Reliance Industries in India at the end of January. The transaction was arranged in conjunction with Macquarie Group’s Commodities and Global Markets group (Macquarie).
The transaction, said OLCV, is a ‘first step in the creation of a new market for climate-differentiated crude oil’. It is also expected to bridge the development of a further differentiated petroleum product, net-zero oil, which Occidental intends to eventually produce through the capture and sequestration of atmospheric CO2 via industrial-scale direct air capture (DAC) facilities and geological sequestration.
The oil was produced in the US Permian Basin by Occidental and delivered to Reliance in India. Macquarie arranged and structured the bundled offset supply and retirement. The 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 Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
According to OLCV, the volume of offsets applied against the cargo are sufficient to cover the expected GHG emissions from the entire crude lifecycle including oil extraction, transport, storage, shipping, refining, subsequent use, and combustion.
As previously reported, Occidental is a founding signatory to the Sea Cargo Charter and claims to be the first US-based international energy company to announce an ambition to achieve net-zero GHG emissions associated with the use of its products by 2050.
‘We are taking important initial steps to work with our customers in hard-to-decarbonise industries to offer carbon-neutral and other low-carbon products that will leverage our expertise in carbon management to lower their total carbon impact and address Scope 3 emissions,’ said Richard Jackson, President OLCV.
The very large crude carrier (VLCC) Sea Pearl containing the carbon-neutral oil finished unloading in India on 28 January.