Mexico’s state energy company Pemex is planning to reduce its emissions and turn into a net-zero company by 2050, starting with a 30% reduction over the next six years.
The target is part of a new sustainability report that Pemex released this week that “establishes the company’s commitment toward ethical and sustainable production, and reinforces Pemex’s role as an agent of change in the nation’s energy sector when it comes to climate action,” according to chief executive Octavio Romero, as quoted by Bloomberg.
Pemex is currently the world’s most indebted oil company replacing Brazil’s Petrobras at the top spot. Earlier this month, the company reported a 44% increase in debt to suppliers and contractors alone since October, to reach some $8.2 billion. Total debt is in excess of $100 billion.
It is also trying to reverse a prolonged decline in oil production, which as a target stands in contrast with Pemex’s stated goal of reducing emissions unless it invests heavily in carbon capture and other emission-reduction measures that it is doubtful the company could afford at this point.
At the same time, however, Pemex needs to become more attractive to creditors, the Bloomberg report suggests, noting that some investors have been shunning the company’s bonds because of the absence of a net-zero plan.
The company was also forced to prepare its net-zero plan by banks that have extended credit facilities to it and these facilities now need extending, per the Bloomberg report.
Mexico’s track record in the emissions department is not that great, either. Last year, emissions from the country’s energy industry rose by 11%, to reach the highest in five years. One unforeseen reason for this was the drought-caused underperformance of Mexico’s hydropower capacity, where output dropped precipitously by 40% in 2023. Wind power also underperformed, leading to increased consumption of hydrocarbons, which in turn boosted emissions.
By Charles Kennedy for Oilprice.com
