The Strike Energy Ltd (ASX: STX) share price is lifting in mid-morning trade today after the company pledged to reduce scope 1 and 2 carbon emissions to net-zero by 3030.
At the time of writing, shares in the oil and gas company are trading for 38 cents each – up 2.7%. In comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) is currently 0.84% higher.
Let's take a closer look at today's update and what it means for the Strike share price.
Strike share price climbs on lower emission pledge
In a statement to the ASX, Strike Energy said it was committing to becoming a net-zero carbon emitter for scope 1 and 2 emissions by 2030. The company added it "aspired" to fully offset its scope 3 emissions sometime after 2030.
According to the government's Clean Energy Regulator, Scope 1 emissions occur directly as a result of company operations, such as emissions produced from manufacturing processes.
Scope 2 emissions are those indirectly caused by operations (for example, the electricity used that has been generated by coal power stations). Scope 3 emissions are those generated throughout a company's supply and value chain, such as in the metals used to manufacture tools.
It should be noted that net-zero emissions are not the same as zero emissions. A zero-emissions strategy would not produce any air pollutants, period. A net-zero strategy means any carbon pollution is offset (or counterbalanced) by green initiatives.
Strike says it hopes to be "Australia's first integrated energy company" to deliver net-zero scope 3 emissions.
However, according to Strike's release, the emissions promise is predicated on its proposed Project Haber becoming fully operational, a current unknown:
[Current studies into the feasibility of Project Haber] are indicative in nature only. The studies are based on low-level technical and economic assessments and are insufficient to provide full assurance of an economic development case at this stage or provide certainty that the conclusions of the studies will be realised, and that the development of Project Haber will be commercially viable.
The announcement has failed to excite investors, judging by the Strike share price movement so far today.
Management commentary
Strike CEO and managing director Stuart Nicholls said:
Project Haber is the enabler for Strike to make the ambitious target of achieving net-zero scope 1 & 2 emissions by 2030. This commitment epitomises the broader value proposition of Strike's downstream integrated strategy.
Should the company achieve success through its Mid-West Geothermal Project, it would possess sufficient offsets to meet its aspirations of being Australia's first net-zero energy company across all of its Scope 1, 2 and 3 emissions.
Nicholls said this would create additional value as net-zero emissions energy attracted premium pricing from industrial energy consumers making their own transition to a lower carbon future.
With a near term target and the contemporary nature of Strike's business, its current board and management team will be the company's custodians to be held to account against these ambitious targets.
Strike share price snapshot
Over the past 12 months, the Strike share price has increased 138.7%. It is only slightly off its all-time high of 39.5 cents achieved in mid-April this year.
Strike Energy has a market capitalisation of $743.7 million.
