Key takeaways:

Engagement priorities:

Woodside needs to seriously consider its role in the provision of low-carbon fuels like hydrogen. To date, it has framed hydrogen as a way to reduce its own scope 3, but demand from its existing customers is unclear. Hydrogen could provide Woodside with a material lower emission revenue stream but only if it approaches it as a genuine business opportunity. Investors engaging with Woodside should ask it to: 

1) Provide a production portfolio split between hydrogen, oil, and gas by FY40.

2) Bring forward projects to unlock more emission reduction (Scope 1 and 2) for its assets, reducing its significant reliance on offsets (84% of emissions reductions in FY23), and leveraging the skills of its new director, Ashok Belani.

3) Provide a clearer distinction between how its $5bn in transition spend is delivering avoided vs abated emissions, with quantification of the real scope 3 emissions reductions before FY30. 

4) Provide the economics and opportunity for market share from hydrogen. Develop (lower carbon) projects that adhere to the most stringent criteria as set by the IRA, thereby limiting their exposure to future changes in future US regulation.