Sign up for updates

Eni’s sustainability-linked bonds not so sustainable

Italian energy firm Eni’s plans to develop one of the most carbon dioxide (CO2) intensive gas fields in the world that will be used for LNG exports, with an intention to sanction later this year the Evans Shoal gas field offshore the northern Australia coastline.

In a report released by the Insitute for Energy Economics and Financial Analysis (IEEFA) detailing Eni’s actions that are inconsistent with its pledge to acheive net zero greenhouse gas emissions by 2050.

Eni has promoted itself to investors as a sustainable leader among oil and gas producers reducing emissions. The Italian investing public embraced their ambitions by subscribing €2 billion into Eni’s first sustainability-linked bond issue to retail investors in January where funds could be used to develop Verus and millions of CO2 a year – hardly a sustainable activity.

As greenwashing claims have become a focus for regulators in the United States, Europe and Australia, Eni’s sustainability credentials should not only come under greater regulatory scrutiny but investors should also be asking questions.

Eni has made much of its sustainability credentials on its website and in multiple public presentations. Yet just days after raising €2 billion through its first sustainability-linked bonds issue to retail investors in January 2023, Eni held a briefing in Australia to outline its development plans for Evans Shoal. When Eni issued its sustainability-linked bonds to Italian retail investors, it did not disclose its Verus plans.

Not only will the Evans Shoal field, which has been renamed Verus and boasts CO2 levels of 27%, challenge Australia’s ambitions to reduce national greenhouse gas (GHG) emissions by 43% by 2030 below 2005 levels, it will also hamper Eni’s own ambitious CO2 reduction target of net zero by 2035 for all emissions generated from extracting and producing oil and gas.

There have been many plans for the Evans Shoal project over its 35-year history. This latest plan will be subject to Australia’s Safeguard Mechanism meaning Evans Shoal/Verus will be subject to higher carbon costs than other gas fields given the CO2 average content of 27% in the field and make it potentially one of the largest CO2 facilities under the mechanism.

Eni Sustainability-linked bonds

Published by the Institute for Energy Economics and Financial Analysis (IEEFA)

Go to report