Climate Transition Action Plan

As part of Santos’ Annual Report materials, we have released our Climate Transition Action Plan (CTAP) which details our progress and key climate commitments.

It takes into account feedback from shareholders and outlines how we are managing the risks and opportunities of the energy transition and describes the action we are taking towards our net-zero targets.

We have invested real dollars in real projects that are now leading to real emissions reduction.

Since our targets baseline year of 2019-20, we have achieved a 26 per cent reduction in our equity share Scope 1 and 2 emissions, representing 84 per cent progress towards our 2030 emissions reduction target, and in 2024 our methane emissions reduced by 17 per cent on 2023 levels.

We are confident that our climate strategy will enable Santos to generate shareholder value by supplying the energy needs of today while seeking to develop the low carbon fuels of tomorrow.

All information on this page should be read in conjunction with our 2024 Climate Transition Action Plan and our 2024 Annual Report.

2024 Climate Transition Action Plan

Our CTAP outlines our current potential decarbonisation initiatives Santos is currently following to achieve our Scope 1, 2 and carbon storage growth and methane targets. It also provides a potential pathway to develop and deliver commercial carbon management services, lower carbon energy and low carbon fuels in the future.

Since 2022, we have invested over $740 million in CTAP activities. This real investment in real projects is now leading to real emissions reduction. Since 2019-20 (our target baseline year), we have achieved a 26 per cent reduction in our equity Scope 1 and 2 emissions, representing 84 per cent progress towards our 2030 emissions reduction target.

Refer to Page 9 of the 2024 Climate Transition Action Plan

Our approach to the Paris Agreement

Santos is setting its targets and undertaking actions to contribute to UN Paris Agreement Goals as set out below.

Refer to Page 12 of the 2024 Climate Transition Action Plan

Santos has undertaken analysis of how our Scope 1 and 2 emissions targets generally compare against emissions trajectory scenarios that third parties have modeled which limit global warming to 1.5 degrees Celsius, a goal of the Paris Agreement. Comparing our historic and targeted emissions[1] with such scenarios provides us with further general understanding of progress toward our climate goals.

The analysis used a range of 1.5 degrees Celsius emissions scenarios developed by leading energy and climate institutions, including the IEA, S&P, Network for Greening the Financial System (NGFS) and Shell,[2] and sought to focus on emissions trajectories relevant to Santos’ operations. Our historic and targeted emissions were analysed using 2023 as the baseline year and were compared against these modeled scenarios.[3]

[1] Emissions reduction targets as per our climate targets on page 11. The 2040 emissions reduction forecast represents the target of net-zero Scope 1 emissions plus a forecast of Scope 2 emissions through to the target of net-zero in 2050 based on portfolio forecast data accounting for electricity usage and forecast changes in grid intensity.

[2] Analysis also considered scenarios published by BP and IPCC but were not included due to discrepancies in baseline year, superseded data sets no longer reflective of current conditions, and/or availability of data not aligning with Santos’ operational context.

[3] The third-party emissions trajectories analysed are inclusive of all global emissions, including those which would be considered Santos Scope 3. Santos does not have control over our Scope 3 emissions as they are the Scope 1 and 2 emissions of other entities, and as such we have not included our Scope 3 emissions in this analysis. In 2024, Scope 3 emissions comprised approximately 88 per cent of our total Scope 1, 2 and 3 emissions. There remains uncertainty around 1.5 degrees Celsius pathway scenarios as the science of climate change continues to evolve. Santos has utilised the most up-to-date third-party pathways available as at the date of the report to conduct our analysis, however we acknowledge that 1.5 degrees Celsius pathway scenarios are subject to many assumptions and uncertainties and emissions trajectories analysed were generally aligned as closely as possible to Santos’ operational context, including data interpolations as required where emissions trajectories did not align to the baseline year of 2023. However, limitations on external provider data availability and granularity may result in only partial comparability with Santos’ emissions reduction targets.

CCS and low carbon fuels hubs

Santos is pursuing a three CCS hub strategy within Australia and Timor-Leste to provide an opportunity to store carbon dioxide emitted from our own operations, as well as carbon dioxide that is generated from third parties.

CCS is a core component of Santos’ decarbonisation strategy, as well as the decarbonisation strategies of our customers and emitters in hard-to-abate industries.

CCS is considered a key pillar of decarbonisation by the IEA [1]. It is the centrepiece of Santos’ decarbonisation strategy, meeting the global demand for carbon management services and facilities while laying the foundation for low carbon fuels in the future.

CCS has the potential to facilitate the transition to Net Zero by:

• Reducing emissions from existing assets
• Capturing and storing emissions from hard-to-abate sectors
• Assisting to potentially establish large-scale low carbon fuels production

[1] Credible Pathways to 1.5 °C: Four pillars for action in the 2020s

Low carbon fuels

Santos continues to progress our CCS projects and explore concepts and technologies to support the potential delivery of low carbon fuels. This underpins our commitment to deliver affordable, reliable, lower carbon energy.

Low carbon fuels are a customer-led opportunity to supply products that reduce both Santos’ and our customer’s emissions.

Our ambition is for our Moomba low carbon fuels hub to provide CCS and carbon solutions to hard-to-abate sectors and customers. Santos can see a potential long-term opportunity for low carbon fuels as markets develop.

This includes investigating the potential for producing low carbon synthetic gas. Synthetic gas is made by combining hydrogen and CO2 through a process known as methanation.

Through capturing or importing CO2 and then exporting it to our trading partners in the form of synthetic gas, there is a potential opportunity to create a circular decarbonisation model.

Picture: Port Bonython, South Australia