CLIMATEREPORTAcknowledging country
Woodside recognises Aboriginal and Torres Strait Islander
peoples as Australia’s first peoples. We acknowledge the uniqueconnection that First Nations peoples have to land, waters andthe environment. We extend this recognition and respect toFirst Nations peoples and communities around the world.

On the cover
The cover features the coastline of Murujuga in Western
Australia, also known as the Burrup Peninsula.

About this report
This Climate Report 2022 summarises Woodside’s climaterelated plans, activities, progress and climate-related data
for the period 1 January 2022 to 31 December 2022.
This report has been structured to align with the Task Force on
Climate-related Financial Disclosures (TCFD) recommendations
framework. It aims to provide a balance of disclosures thatmeet the recommendations of the TCFD, while avoiding
overwhelming readers with information. Woodside considers
that this report contains disclosures consistent with TCFD’s fourrecommendations and eleven recommended disclosures, noting
its Guidance for all Sectors and Guidance for Non-Financial
Groups.1,2 Woodside is a supporter of the TCFD.
The report has also been prepared with reference to selected
relevant metrics from the Sustainable Accounting Standards
Board (SASB) Oil and Gas Exploration and Production Standard.3

Annual Report 2022 and Sustainable
Development Report 2022
Our Annual Report 2022 provides a summary of Woodside’s
operations and activities for the 12 month period ended
31 December 2022 and Woodside’s financial position as
at 31 December 2022.
Our Sustainable Development Report 2022 provides a summaryof Woodside’s sustainability approach, health and safety
performance and other information for the 12 month period
ended 31 December 2022.
The Annual Report 2022, Sustainable Development Report 2022
and Climate Report 2022 together provide a complementary
review of Woodside’s business.
The reports are available on our website at
woodside.com

Report feedback
We welcome feedback on our reports via
companyinfo@woodside.com

External assurance
Selected greenhouse gas emissions data is assured by GHD.
Please refer to page 65-66 for more information on the scopeof assurance.

Green Reports

See page 62 for an index which cross-references
content in the report to these recommendations.
Woodside Energy Group Ltd (ABN 55 004 898 962) is theultimate holding company of the Woodside group of companies.
In this report, unless otherwise stated, references to “Woodside”,“our”, “us” or “we” refer to Woodside Energy Group Ltd andits controlled entities.

We are working with Green Reports™ on
an initiative to ensure that communications
minimise environmental impact and create amore sustainable future for the community.

On 1 June 2022, the merger of Woodside with BHP Group
Limited’s (BHP) oil and gas portfolio (BHP’s petroleum business)
was completed. This report contains information relevant forthe period 1 January to 31 May 2022 for the heritage Woodsideentity and from 1 June to 31 December 2022 for the post-merger
Woodside entity.4
Further detail regarding the scope of this report including a
disclaimer, risks, emissions data and other important informationis contained on pages 63-64.
All dollar figures are expressed in US currency, Woodside share,
unless otherwise stated.

1

Financial Stability Board (2017). “Recommendations of the Task Force on Climate-related Financial Disclosures. Final Report.” Figure 4, page 14. Some elements of the TCFD’s four recommendations
and eleven recommended disclosure have been presented in different order to enhance readability. A cross reference between the TCFD and this report is provided on page 62.
2 Financial Stability Board (2021). “Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures.”
3 SASB (2018). “Oil & Gas – Exploration and Production. Sustainability Accounting Standard. Version 2018-10.” Table 1, page 6.
4 Heritage Woodside refers to Woodside’s assets prior to the merger with BHP’s petroleum business. Heritage BHP refers to the assets acquired through the merger with BHP’s petroleum business.

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Climate Report 2022

Contents
1.

Overview

4

1.1
1.2
1.3
1.4

Message from the Chair
Introduction from the Chief Executive Officer
Executive summary
Our climate policy

4
5
6
7

2. The energy transition

8

2.1 Climate change
2.2 Oil and gas in the energy transition
2.3 Market decarbonisation plans

8
10
15

3. Strategy

16

3.1 Woodside’s climate strategy
3.2 Our portfolio today
3.3 Financial resilience testing of our portfolio
3.4 Capital allocation framework
3.5 Decarbonisation strategy
3.6 Offsets
3.7 Scope 3 emissions

16
18
24
26
28
34
36

4. Metrics and targets

40

4.1 Targets: 2022 progress
4.2 Metrics

40
42

5. Governance48

5.1 The Board’s oversight of climate-related risks
and opportunities
5.2 Management’s role in assessing and managing
climate-related risks and opportunities
5.3 Just transition

50
52

6. Risk management

54

6.1 Risk management framework54

7. Appendices

58

7.1
7.2
7.3
7.4

58
59
62

48

Climate-related data
Glossary
Index
Disclaimer, risks, emissions data andother important information
7.5 GHD assurance statement

63
65

—
Coastline of Murujuga in Western Australia,
also known as Burrup Peninsula.
Woodside Energy Group Ltd|iii

S ection 1 : O V E R V I E W

S ection 1 . 1

Messagefrom the Chair—
Richard Goyder AO.

Woodside is proud to be a global energy company,
producing oil and gas whilst working to develop newenergy products and services. For us, climate change is acomplex and important issue that significantly influences
our strategy.
Woodside is committed to playing its part. We are
reducing our net equity Scope 1 and 2 greenhousegas emissions towards our targets, and progressing
investment in new energy products and lower carbon
services alongside existing and potential new oil and gas
opportunities.
The Board is confident in our strategy and our response
to climate change, which is outlined in this Climate Report
2022. Last year’s Climate Report 2021 was adopted by 51%
of our shareholders at the 2022 AGM. During 2022 we havebeen engaging and listening to our shareholders to further
understand their expectations about our climate-related
strategy and disclosures.
Shareholders have told us that they would like to understandmore about how we plan to reduce emissions from ouroperations, and about how we manage our use of carbon
credits appropriately. We also heard that they would like tounderstand how we consider our future investment optionsin oil, gas and new energy in the context of climate change.
Some shareholders have also asked us to consider setting
Scope 3 greenhouse gas emissions targets.
These matters, and other climate-related factors, havebeen discussed by the Board and its Committees
throughout the year. We have addressed them in thisreport, explaining what we can and cannot do, and why.

1

4

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Please see glossary for a definition of how Woodside uses the term lower carbon portfolio.

Climate Report 2022

Not surprisingly on an issue of the magnitude andcomplexity of climate change, there is uncertainty anda broad range of views in the community about how toproceed.
The Board intends to navigate this uncertainty on behalfof shareholders by building a low cost, lower carbon,1
resilient, diversified and profitable portfolio, supporting ourcapability to adapt to the choices made by our customers,
as they too navigate through an uncertain transition.
Our intention in this report has been to explain why webelieve that accepting uncertainty and responding to itwith resilience and flexibility is not only in the interests ofour shareholders, but is also more likely to contribute tosuccessful global emissions goals.
Much of this report is similar to our Climate Report
2021 because our understanding and strategy remains
consistent. With this in mind, the Board will continue toengage with and listen to shareholders about how theywould best like to receive information and provide feedback
about our climate strategy and progress in future years.

Richard Goyder AO
Chair of the Board
27 February 2023

S ection 1 . 2

Introduction from the
Chief Executive Officer—
Meg O’Neill.

In 2022, the world faced what the International Energy
Agency called “the first truly global energy crisis”, with supply
disruptions and high prices impacting people’s lives andlivelihoods around the world.
It had roots in under-investment in energy supply over thepreceding decade and came into sharp focus after Russia’s
invasion of Ukraine.
This has been a wake-up call about the importance of energy
security and affordability as we progress along the pathway to
net zero. It is also a reminder that the future is uncertain andunforeseen events can impact energy transitions.
As we have seen in the wake of the invasion of Ukraine,significant volumes of gas and other fossil fuels cannot simply
be removed from our energy systems without consequence,
let alone be switched off altogether overnight.
We need all options on the table if we are to successfully change
the way we produce and consume energy and limit global
temperature rise.
Energy security and the energy transition therefore should not
be seen as alternatives. It is increasingly clear that they both
require effective management and substantial investment.
In the Asia Pacific region, major economies such as Japanremain clear that they need Australia to continue as a secure,affordable supplier of energy, including liquefied natural gas(LNG). Investment in new LNG supply can help meet demandat affordable prices. And LNG can help Asia to decarbonise, forexample by replacing coal, supporting renewables, and in hardto-abate uses.

But this is not uniform. The public discourse on the energy
transition can be polarised and ideological, particularly inAustralia. We believe this is to the detriment of careful analysisof climate science and delivery of practical solutions. We seek torebalance this through this report and our broader advocacy.
This report provides updates on how we made progress in 2022
on reducing Woodside’s net equity Scope 1 and 2 greenhousegas emissions towards the targets that we announced in 2020.
And also how we progressed projects across oil, gas and newenergy which have the potential to help our customers secure
their energy needs whilst they reduce their own emissions.
Reflecting the fact that our merger with BHP’s petroleum
business took place part way through the year, some elements ofthis report are partial. Climate-related data reflects the heritage
Woodside entity for 1 January to 31 May 2022, and the merged
entity for the remaining seven months of the year since themerger took effect. Some of our climate-related actions, such as
the development of asset decarbonisation plans, are still being
extended to our new assets.
I hope that you find this report useful and informative, and acontribution to constructive dialogue.

Meg O’Neill
Chief Executive Officer and Managing Director
27 February 2023

There have been reasons for optimism during 2022. The energy
crisis has not deflected the world’s resolve to meet the goals of
the Paris Agreement, which were reaffirmed at the Sharm elSheikh climate summit in November. Major economies introduced
supportive new policies, such as the United States’ Inflation
Reduction Act, and Australia legislated its climate targets.

Woodside Energy Group Ltd|

5S ection 1 . 3

Executive summary
Woodside aims to thrive through the energy transition by building a low cost, lower
carbon, profitable, resilient and diversified portfolio.1 Our climate strategy has two
key elements: reducing our net equity scope 1 and 2 greenhouse gas emissions andinvesting in the products and services that our customers need as they secure theirenergy needs and reduce their emissions.
SCOPE 1 AND 2 GREENHOUSE GAS EMISSIONSSCOPE 3 GREENHOUSE GAS EMISSIONS

15% 30% US$5
by 2025

by 2030

billionNet equity emissions reduction targets withan aspiration of net zero by 2050 or sooner.2

Targeted investment in new energy products
and lower carbon services by 2030.3

2022 highlight: Achieved 11% reduction compared
to starting base.

2022 highlight: Progressed a suite of potential
opportunities with $100m spent to date.

Global efforts to reduce greenhouse gas emissions in order tomeet climate goals are changing the way the world produces
and consumes energy. This energy transition is uncertain andthere is a wide range of potential demand for oil, gas and newenergy including in pathways consistent with limiting global
temperature rise.
Today, Woodside has a portfolio of oil and gas assets. We arealso developing a portfolio of new energy products and lower
carbon services. Across our portfolio we seek to match the pace,scale and needs of our customers as they determine their own
decarbonisation pathways.

In 2022, Woodside’s net equity Scope 1 and 2 greenhouse gas
emissions were 11% below the starting base, which has beenadjusted to include the assets acquired due to the merger with
BHP’s petroleum business.
Methane emissions were around 0.1% of our production by
volume, and during 2022 Woodside became a signatory to the
Aiming for Zero Methane Emissions initiative.
Asset decarbonisation plans have been completed at heritage
Woodside operated assets and during 2023 are targeted to beextended to include heritage BHP operated assets.

We see an ongoing role for natural gas to support our customers
plans to secure their energy needs, while they reduce theiremissions. Woodside’s existing LNG supplies as well as projects
such as the Scarborough development can contribute to natural
gas supply.

We test the financial resilience of our existing portfolio of
producing assets and sanctioned products using scenario
analysis. Investment decisions as we grow and diversify ourportfolio are informed by market analysis and a disciplined
capital allocation framework, including climate-related
considerations.

We have set near- and medium-term targets to reduce net
equity Scope 1 and 2 greenhouse gas emissions. We have three
ways to achieve these targets: avoiding emissions throughdesign; reducing them through efficient operations; andoffsetting the remainder. Avoiding and reducing emissions are
our first priority. Offsetting emissions by retiring carbon credits
also has an important role.

During 2022, Woodside progressed a developing portfolio of
new energy products and lower carbon services. These include
proposed hydrogen and ammonia production facilities in the
United States, Australia and New Zealand, assessment of carbon
capture and storage opportunities in Australia, and investments
in carbon to products technologies.

1

For Woodside, a lower carbon portfolio is one from which the net equity scope 1 and 2 greenhouse gas emissions, which includes the use of offsets, are being reduced towards targets, and into which
new energy products and lower carbon services are planned to be introduced as a complement to existing and new investments in oil and gas. Our Climate Policy sets out the principles that we
believe will assist us achieve this aim.
2 Target is for net equity Scope 1 and 2 greenhouse gas emissions, relative to a starting base representative of the gross annual average equity Scope 1 and 2 greenhouse gas emissions over 2016-2020
and may be adjusted (up or down) for potential equity changes in producing or sanctioned assets with a final investment decision prior to 2021. Please refer to the Glossary starting on page 59 andthe section on decarbonisation strategy starting on page 28 for further information on the definition and calculation of Scope 1 and 2 net equity greenhouse gas emissions.
3 Individual investment decisions are subject to Woodside’s investment targets. Not guidance. Potentially includes both organic and inorganic investment.
6|

Climate Report 2022

S ection 1 . 4

Our climate policy
WOODSIDE POLICYBACKGROUND
The Intergovernmental Panel on Climate Change has stated that “it is unequivocal that human influence has warmed
the atmosphere, ocean and land”. An objective of the Paris Agreement is to hold “the increase in the global averagetemperature to well below 2°C above pre-industrial levels” and to pursue “efforts to limit the temperature increase
to 1.5°C”. Many countries have set targets to reduce greenhouse gas emissions, including by changing the way they
produce and consume energy.

OBJECTIVE
Woodside’s objective is to thrive in this energy transition as a low cost, lower carbon energy provider.

PRINCIPLES
Woodside aims to achieve the objective by:• Setting science-based1 near, mid, and long-term net emissions reduction targets that are consistent with
Paris-aligned2 scenarios, covering equity scope 1 and 2 emissions, both operated and non-operated.3• Developing and operating oil and gas projects in a manner that is consistent with these targets. This includes the
deployment of lower-emission technologies (Design Out), supporting efficient operations (Operate Out) and useof robust offsets (Offset) as methods to reduce and offset greenhouse gas emissions.
• Investing in new energy products and lower carbon services to reduce customers’ emissions (part of Woodside’s
Scope 3 emissions), including but not limited to hydrogen, ammonia and carbon capture, utilisation and storage.
• Publishing transparent climate-related disclosures aligned to the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD) or other recognised global reporting standards.
• Aligning our advocacy to the principles of this Climate Policy.

APPLICABILITY
Responsibility for the application of this Policy rests with all Woodside employees, contractors and joint venture
participants engaged in activities under Woodside operational control. Woodside managers are also responsible forpromotion of this Policy in non-operated joint ventures.
This Policy will be reviewed regularly and updated as required.
Reviewed by the Woodside Energy Group Ltd Board in December 2022

1

Woodside is using the draft Prototype IFRS Sustainability Disclosure Standard definition of “science-based” (published 2021) which states “targets are considered ‘sciencebased’ if they are in line with what the most recent climate science sets out is necessary to meet the goals of the Paris Agreement—limiting global warming to below 2 degrees
Celsius above pre-industrial levels and pursuing efforts to limit warming to 1.5 degrees Celsius.”. See https://www.ifrs.org/content/dam/ifrs/groups/trwg/trwg-climate-relateddisclosures- prototype.pdf (Appendix A).
2 Woodside is using the draft Prototype IFRS Sustainability Disclosure Standard definition of “Paris-aligned scenarios” (published 2021) which states “scenarios consistent withlimiting global warming to below 2 degrees Celsius above pre-industrial levels and pursuing efforts to limit warming to 1.5 degrees Celsius.” See https://www.ifrs.org/content/
dam/ifrs/groups/trwg/trwg-climate-related-disclosures- prototype.pdf (Appendix A).
3 Equity emissions means the share of the total emissions arising from an activity that are attributable to Woodside in proportion to Woodside’s ownership interest in the activity,
irrespective of whether Woodside operates the activity. Operated emissions are the total emissions arising from an activity that Woodside operates, irrespective of Woodside’sownership interest.

Woodside Energy Group Ltd|

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S ection 2 : T H E E N E R G Y T R A N S I T I O N

S ection 2 . 1

Climate change
Climate science is a rapidly evolving field in which new observations continue
to improve our understanding of the current and potential impacts of global
warming, and the possible pathways for mitigating and adapting to it.

Climate change science
The Intergovernmental Panel on Climate Change (IPCC) is
the United Nations body for assessing the science related
to climate change. Its reports provide a synthesis of current
science that is broad based, robust and supported bystatements of scientific confidence.
In 2022, the IPCC published two new reports: Climate
Change 2022: Impacts, Adaptation and Vulnerability1and Climate Change 2022: Mitigation of Climate Change.2
These reports are respectively the contributions ofWorking Group II and Working Group III to the IPCC’s Sixth
Assessment Report (the AR6-WG2 and AR6-WG3 reports),
and follow the 2021 report from Working Group I Climate
Change 2021: The Physical Science Basis (AR6-WG1).3
A final synthesis report is expected to be completed
in 2023.
The AR6-WG1 report stated that it is unequivocal that
there is human-induced warming. It also stated that
increased atmospheric carbon dioxide (CO2) levels,
generated by human activity, are the largest driver ofwarming over the longer term, and that there are a range
of factors, including emissions of methane, which increase
warming in the short-term.
The AR6-WG2 report stated that human-induced climatechange, including more frequent and intense extreme
events, has caused widespread adverse impacts andrelated losses and damages to nature and people,
beyond natural climate variability. It stated that global
warming, reaching 1.5°C in the near-term, would cause
unavoidable increases in multiple climate hazards andpresent multiple risks to ecosystems and humans.

1

The report noted that societal choices and actions
implemented in the next decade will determine the extent
to which medium- and long-term pathways will deliver
climate resilient development.
The AR6-WG3 report provided an updated global
assessment of climate change mitigation progress andpledges, and examined the sources of global emissions.
It explained developments in emissions reduction andmitigation efforts, and assessed the impact of national
climate pledges in relation to long-term emissions goals.
More than 2,000 quantitative emissions pathways were
submitted to the IPCC, of which 1,202 scenarios included
sufficient information for assessing the associatedwarming.
The report found that there are many pathways in theliterature that likely limit global warming to 2°C withno overshoot, or to 1.5°C with limited overshoot.4
These pathways vary, sometimes widely, across global
indicators including different sources of primary energy.
These variations occur because, while climate science
is able to calculate a “carbon budget” of net emissions
before any particular temperature outcome is reached,
the allocation of this budget between different humanactivities requires additional judgements about for
example technology, economics, consumer preferences
and policy choices.

IPCC 2022. “Climate Change 2022: Impacts, Adaptation, and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on
Climate Change” [H.-O. Pörtner, D.C. Roberts, M. Tignor, E.S. Poloczanska, K. Mintenbeck, A. Alegría, M. Craig, S. Langsdorf, S. Löschke, V. Möller, A. Okem, B. Rama (eds.)]. Cambridge
University Press. Cambridge University Press, Cambridge, UK and New York, NY, USA, 3056 pp., doi:10.1017/9781009325844.
2 IPCC 2022. “Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate
Change” [P.R. Shukla, J. Skea, R. Slade, A. Al Khourdajie, R. van Diemen, D. McCollum, M. Pathak, S. Some, P. Vyas, R. Fradera, M. Belkacemi, A. Hasija, G. Lisboa, S. Luz, J. Malley,(eds.)]. Cambridge University Press, Cambridge, UK and New York, NY, USA. doi: 10.1017/9781009157926.
3 IPCC, 2021. “Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change”[Masson-Delmotte, V., P. Zhai, A. Pirani, S.L. Connors, C. Péan, S. Berger, N. Caud, Y. Chen, L. Goldfarb, M.I. Gomis, M. Huang, K. Leitzell, E. Lonnoy, J.B.R. Matthews, T.K. Maycock, T.
Waterfield, O. Yelekçi, R. Yu, and B. Zhou (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, In press, doi:10.1017/9781009157896.
4 Overshoot means the temporary exceedance of a specified level of global warming, such as 1.5°C. Overshoot implies a peak followed by a decline in global warming, achieved throughanthropogenic removal of CO2 exceeding remaining CO2 emissions globally.

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Climate Report 2022

The energy transition

Energy security

The use of fossil fuels for energy accounts for around threequarters of total anthropogenic greenhouse gas emissions.1
This means that efforts to meet climate change goals must
include changes to the way that the world produces andconsumes energy. These changes are referred to as the“energy transition”.

During 2022, the world experienced what the International
Energy Agency (IEA) has called the “first truly global
energy crisis”.5

The precise shape and pace of the energy transition is uncertain.
It is expected to vary in different countries because they havedifferent starting points, development requirements, resources
and capabilities. However, the scale of the transition is clearer.
It will take many trillions of dollars, invested over decades.
The International Renewable Energy Agency (IRENA) estimates
it will require $115 trillion of cumulative investment by 2050.2

GLASGOW CLIMATE PACTAt the 26th UN Climate Change Conference of theParties (COP-26) in Glasgow in November 2021,
world governments reaffirmed “the Paris Agreement
temperature goal of holding the increase in the
global average temperature to well below 2°C above
pre-industrial levels and pursuing efforts to limit thetemperature increase to 1.5°C above pre-industrial
levels”. They also recognised “that the impacts ofclimate change will be much lower at the temperature
increase of 1.5°C compared with 2°C” and resolved“to pursue efforts to limit the temperature increase
to 1.5°C.”3This crisis has seen higher energy prices and in some cases
constraints on access to energy supply, impacting upon bothbusinesses and households.
The energy crisis has led to a renewed focus on energy security
and has reconfirmed that the energy transition needs to becarefully managed if it is to be fair, inclusive and ultimately
successful.
In Woodside’s view, a stable energy transition will be one inwhich energy is affordable and reliable, as well as lower carbon.
This is likely to lead to significant investment in new supply of oil,gas and new energy, as we explain in the coming pages ofthis report.
“The combination of the Covid pandemic and the current
energy crisis means that 70 million people who recently
gained access to electricity will likely lose the ability toafford that access — and 100 million people may no longer
be able to cook with clean fuels, returning to unhealthy
and unsafe means of cooking. That is a global tragedy.”– IEA World Energy Outlook 20226

This was reconfirmed at the 2022 COP-27 Summit
in Sharm el-Sheikh, Egypt.4

1
2
3
4
5
6

IEA 2021. “Net Zero – a Roadmap for the Global Energy Sector”. All rights reserved.
IRENA 2022. “World Energy Transitions Outlook 2022: 1.5°C pathway”. International Renewable Energy Agency, Abu Dhabi. Page 31.
UNFCCC 2021. “Glasgow Climate Pact” paragraphs 20-21. Accessed at unfccc.int.
UNFCCC 2022. “Sharm el-Sheikh Implementation Plan”. Accessed at unfccc.int.
IEA 2022. World Energy Outlook 2022. All rights reserved.
IEA 2022. World Energy Outlook 2022. Page 3. All rights reserved.

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9S ection 2 . 2

Oil and gas in the energy transition
In this section of the Climate Report 2022, we consider the potential global use of oil
and gas through the energy transition.
To do so, we review literature from the IPCC, the IEA,
the Nationally Determined Contributions in key markets as
submitted to the United Nations, and also provide a casestudy of decarbonising power grids in Australia’s National
Electricity Market.
The analysis provided here is global in nature. In subsequent
sections of the report, we make observations about Woodside’s
specific portfolio of assets and potential investment opportunities,
and how we expect our global analysis to impact upon our
strategy, business and financial planning.

Oil and gas in Paris-aligned climate scenarios
Climate science has drawn a robust link between cumulativeemissions of greenhouse gases and global temperature levels.1
The link between cumulative emissions and temperature levels
allows a carbon budget to be calculated. This is the remaining
amount of net emissions (i.e. all global sources of emissions
minus all global sinks2 of emissions) that can occur before today’s
concentration of greenhouse gases increases to the concentration
associated with potential temperature outcomes.
However, the distribution of this carbon budget across different
human activities requires additional judgements about a wider
range of social, economic and technological factors and consumer
and policy choices. Strategies to achieve emissions reductions
include transitioning from fossil fuels without CCS to very lowor zero-carbon energy sources, such as renewables or fossil
fuels with CCS, demand side measures and improving efficiency,
reducing non-CO2 emissions, and deploying carbon dioxide
removal (CDR) methods to counterbalance residual greenhousegas emissions. Pathways to limit warming therefore show different
combinations of sectoral mitigation strategies consistent with agiven warming level.
As a result the demand for oil and gas in climate-related
scenarios that could limit global warming to 1.5°C or 2°C
is uncertain. For example in the AR6-WG3 report, the IPCC
stated that in pathways that limit warming to 1.5°C (with agreater than 50% probability and with no or limited overshoot)the potential global use of gas in 2050 ranges from 30% above
2019 levels to 85% below them with a median 45% decline.

The AR6-WG3 also provides ranges and median declines for oil
and for coal and says that “as indicated by the ranges, choices
in one sector can be compensated for by choices in anothersector while being consistent with assessed warming levels”.3
Additional insight into the subsets within the range was provided
by the IPCC in their 2018 Special Report on Global Warming of
1.5°C (AR6-SR1.5).4
The AR6-SR1.5 report grouped the scenarios that are consistent
with limiting warming to 1.5°C into four illustrative pathways,
respectively P1, P2, P3 and P4. Of these, only P1, P2 and P3 limit
warming to 1.5°C with no or limited overshoot, whereas P4 does
so with high overshoot.
The pathways vary in key respects. These variables include:• Estimates of future energy demand• The distribution of that energy demand between different
supply sources such as renewables, nuclear, coal, oil and gas• The rate of scale-up of technologies such as carbon captureand storage (CCS)• Emissions from outside the energy sector, such as methane
emissions from agriculture.
Of these pathways, the pathway with the lowest levels of gas use(which is P1) is also characterised by lower overall energy demandand deeper cuts in agricultural methane emissions prior to 2030.
The pathway with the highest gas use in 2050 (which is P3) is
associated with maintenance of historical patterns of demand,
coupled with significant use of energy technologies such as CCS.
These pathways do not vary in all respects. The level of energy
delivered by renewables, and the level of overall emissions
reduction is similar in both pathways. The page opposite
provides further information on P1 and P3. Drawing upon
historical and current data as well as future projections,
Woodside also provides observations on signposts associatedwith these pathways.
The AR6-SR1.5 report forms part of the IPCC’s Sixth Assessment
Cycle and its findings may be updated in their Synthesis Reportfor this cycle, which is expected to be published in 2023.

1 IPCC, 2021. “Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change”.
2 Carbon sinks are forests and other ecosystems that absorb carbon, thereby removing it from the atmosphere and offsetting CO2 emissions. (Definition taken from European Commission “Climatechange: glossary of common terms and acronyms” https://www.eea.europa.eu/help/glossary/eea-glossary/carbon-sink).
3 IPCC 2022. “Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change”. Summary for
Policymakers paragraph C.3.2.
4 IPCC 2018. “Global Warming of 1.5°C, an IPCC special report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context
of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty.” [Masson-Delmotte, V., P. Zhai, H.-O. Pörtner, D. Roberts, J. Skea, P.R.
Shukla, A. Pirani, W. Moufouma-Okia, C. Péan, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X. Zhou, M.I. Gomis,E. Lonnoy, T. Maycock, M. Tignor, and T. Waterfield (eds.)]. In Press. See Page 14,
pathways P1 and P3.

10|Climate Report 2022

FIGURE 1: SELECTED GLOBAL INDICATORS OF 1.5°C PATHWAYS1
Indicator

P1

P3

Woodside observations

Primary energy from gas in 2050(% relative to 2010)

-74%

+21%

There is a wide variation in natural gas use between these twomodelled pathways.

Temperature outcome>50% probability of limiting warming
to 1.5°C with no or limited overshootCO2 emission change in 2050(% relative to 2010)

-93%

-91%

Primary energy fromnon-biomass renewables in 2050(% relative to 2010)

+833%

+878%

Final energy demand in 2050(% relative to 2010)

-32%

+21%

Cumulative CCS until 2100
(Gt CO2)

0687

The pathways are differentiated in other factors. For example,
the lower gas pathway (P1) also includes absolute reductions infinal energy demand and deeper cuts in agricultural methane in
the near term.

Agricultural methane emissions
in 2030 (% relative to 2010)

-24%

+1%

Conversely the higher gas pathway (P3) includes a marked
increase in the takeup of CCS.

They are not materially differentiated by CO2 emissions change
or by the takeup of renewable energy. In fact, the takeup of
renewable energy is greater in the higher gas pathway.

The IPCC provides several indicators which contribute to
the emissions and temperature outcomes in its pathways,
including the selected indicators provided in figure 1.

Signposts

FIGURE 2: GLOBAL FINAL ENERGY DEMAND2

All the indicators can inform judgments about the viabilityof the pathways and should not be viewed in isolation of eachother. This includes indicators that are directly relevant to thelevel of natural gas e.g., final energy demand, as well as thosethat are not linked e.g., agricultural methane emissions.

12000

P3
10000

P1

mtoe

8000

Of these indicators, levels of CCS development are growing
and receiving government support, such as the Inflation
Reduction Act in the United States. However, they are not yet
close to achieving the cumulative quantities consistent with
P3. The Global CCS Institute states that “ambition must now
translate to urgent, broad and large scale action”.4

6000
4000
2000
0
1990

2000

2010

World total final energy consumption

2020

2030

P1 pathway

2040

2050

P3 pathway

FIGURE 3: GLOBAL EMISSIONS OF METHANE FROM AGRICULTURE3
3600

P3

Mt CO2-e

3200
3000
2800

P1

2600
2400
1990

2000

2010

Agricultural methane emissions

2020

P1 pathway

2030

Similarly, other indicators are not currently consistent withachieving the P1 pathway. For example, figures 2 and 3 show
the historical values for final energy demand and for emissions
from agriculture respectively. They also show the future values
projected in each of the P1 and P3 pathways. Neither indicator
is currently consistent with achieving the pathways, but P3 iscloser to the current trajectory than P1.
In Woodside’s view, this means that the IPCC P3 pathway,
which involves relatively higher levels of natural gas together
with a marked increase in levels of CCS, should continue to beconsidered by policy makers and by energy companies whenassessing options to limit global warming to 1.5°C.

3400

2200

Despite the divergent levels of gas use, both the P1 and P3
pathways have the same potential temperature outcome.

2040

P3 pathway

2050

P3 is described by the IPCC as “a middle of the road scenario
in which societal as well as technological development follows
historical patterns. Emissions reductions are mainly achievedby changing the way in which energy products are produced,
and to a lesser degree by reductions in demand.”

1

IPCC 2018. “Global Warming of 1.5°C, an IPCC special report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context
of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty.” The Woodside analysis on this page explores variables in natural gas
use because natural gas is the dominant product in Woodside’s portfolio. Woodside has focused on P1 and P3 pathways because they include the two ends of the range of natural gas use from the
IPCC AR6-SR1.5. The AR6-SR1.5 also includes two other pathways, P2, in which global gas use is between the values of P1 and P3, and P4 which is a pathway to limiting warming to 1.5°C but which,unlike pathways P1-P3, has higher overshoot.
2 International Energy Agency, accessed online January 2023 at https://www.iea.org/data-and-statistics/charts/world-total-final-consumption-by-source-1973-2018. Note the values for separate fueltypes provided by the IEA have been totalled by Woodside. 2030 and 2050 values have been added by Woodside using data from the IPCC AR6-SR1.5.
3 World Bank, accessed online January 2023 at https://data.worldbank.org/indicator/EN.ATM.METH.AG.KT.CE. 2030 and 2050 values have been added by Woodside using data from the AR6-SR1.5.
4 Global CCS Institute 2022. 2022 Status Report. https://status22.globalccsinstitute.com/2022-status-report/global-status-of-ccs/.

Woodside Energy Group Ltd|

11

CASE STUDY:
ARE NEW OIL AND GAS FIELDS NEEDED IN SCENARIOS WHICH ACHIEVE NET ZERO?
In 2021, the International Energy Agency (IEA) published its
Net Zero by 2050: A Roadmap for the Global Energy Sector
report (the NZE scenario).1
Although the report is clear that “the route mapped out here is apath, not necessarily the path…”, the report’s finding that “no new
oil and gas fields” are needed has, for some stakeholders, becomea singular litmus test of climate alignment and an objective to be
pursued as a matter of policy.
Woodside considers the IEA NZE scenario in the scenario
analysis on page 24-25 of this report. However, we also recognisethat this is just one scenario among many, and we also consider
the range of pathways considered by the IPCC.
The levels of oil and gas usage in the NZE are plotted against
the range of oil and gas usage in 1.5°C pathways from the IPCC’s
AR6-WG3 report in the charts on page 13. All of these pathways
have a greater than 50% probability of limiting warming to 1.5°C
with no or limited overshoot. The NZE scenario correlates within
the lowest quartile of the IPCC range, meaning that 75% of the
1.5°C pathways included in the IPCC AR6-WG3 report entail more
oil and gas usage than the NZE.
Moreover, “no new oil and gas fields” does not mean “no oiland gas investment”. In fact, the IEA estimated the need foran average of $365 billion of upstream oil and gas investment
every year to 2030, and $171 billion every year thereafter to 2050
is required in its NZE scenario.2 This is because output fromexisting fields will decline as they are depleted, so investment isneeded to sustain and replace them in all scenarios. In the NZE
scenario, this investment is achieved wholly at existing fields,
rather than initiating new ones.

1
2
3
4

12

The IEA further cautions that: “The fact that no new oil andnatural gas fields are required in the NZE does not mean that
limiting investment in new fields will lead to the energy transition
outcomes in the NZE. If demand remains at higher levels,
reduced investment would result in a shortfall in supply inthe years ahead, and this would lead to higher and morevolatile prices”.
To avoid an energy shortfall, the IEA’s NZE requires investment inclean energy to reach $5 trillion annually by 2030.3 It is currently
tracked by the IEA at $1.2 trillion and expected to reach $2 trillion
following the passage of measures such as the United States
Inflation Reduction Act.
Lastly, the IEA’s report provides a spotlight on key uncertainties
by highlighting the differences between NZE and other net zero
scenarios considered by the IPCC.4
For example:• The IPCC scenario range envisages total final energy
consumption ranging from 300-550 EJ in 2050. The NZE has
final energy consumption of 340 EJ in 2050.
• The IPCC scenario range envisages between 3.5-16 Gt ofcarbon dioxide removals (CDR) in 2050, whereas NZE
envisages 1.9 Gt.
• The IPCC scenario range envisages a median use of bioenergy
200 EJ in 2050, whereas NZE envisages 100 EJ.
• The IPCC scenario range envisages a median of 18 EJ total final
hydrogen consumption and NZE envisages 33 EJ.
These differences do not mean that the NZE is incorrect: rather,that it is simply one point on a wide range of potential future
pathways that could successfully limit global warming.

IEA 2021. “Net Zero by 2050. A Roadmap for the global energy sector”. All rights reserved.
IEA 2021. World Energy Outlook 2021. All rights reserved. Table 6.1, page 278.
The IEA defines clean energy as including “renewables, energy efficiency, low carbon fuels, nuclear power, battery storage and carbon capture, utilisation and storage.”
IEA 2021. “Net Zero by 2050. A Roadmap for the global energy sector”. All rights reserved. Pages 62-64.

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Climate Report 2022

The IEA’s NZE scenario projects a single data point for oil and gas use in 2050. In figure 4 this has been superimposed on the
IPCC range of oil and gas use from the AR6-WG3 report, for scenarios that have a 50% or greater probability of limiting warming
to 1.5°C with no or limited overshoot.
Figures 5, 6 and 7 compare the IEA Net Zero Roadmap value for total final energy consumption, adoption of carbon dioxide removals(CDR) technologies, and take up of hydrogen with the respective ranges from the IPCC for scenarios that limit warming to 1.5°C
including with overshoot.

FIGURE 4: OIL AND GAS USAGE1

FIGURE 5: TOTAL FINAL ENERGY CONSUMPTION1,2
700

200

5th Percentile

Median0Interquartile
range

MedianInterquartile
range

IPCC
range

400
300
200

95th Percentile

95th Percentile

100
Range of potential
oil use in 2050

Range of potential
gas use in 2050

IEA NZE projected level02019 values

FIGURE 6: ENERGY RELATED CO2 REMOVALS1,2

Gt CO2

EJ

100
50

500

5th Percentile

45

16

40

14

35

12

30

IPCC
range

8

25

6

15
10

2

5

0

0

Energy related CO2 removals in 2050
2019 value

IPCC
range

20

4

IEA NZE projected level2019 value

FIGURE 7: HYDROGEN CONSUMPTION1,2

18

10

Total final energy consumption in 2050
IEA NZE projected level

EJ

EJ

150

600

Hydrogen in total final energy consumption in 2050
IEA NZE projected level2019 value

1

Data in Figures 4-7 is drawn from a number of publicly available sources and consequently has some differences arising from the format of data in those sources. Chart 4 utilises the IPCC’s range forpotential percentage change in oil and gas usage (both with and without CCS), in scenarios that have a 50% or greater probability of limiting warming to 1.5°C with no or limited overshoot from AR6WG3. It applies this range to the 2019 actual values from the IEA’s WEO 2021. The IEA NZE 2050 value is drawn from the IEA’s WEO 2022, the most recent published update of this value. In Charts
5-7, the IPCC range is as presented in the IEA’s 2020 Net Zero Roadmap report (pages 62-64). This includes 53 scenarios with no or limited overshoot and 37 scenarios with a higher temperature
overshoot. The 2019 value in Charts 5, 6 and 7 is taken from the IEA’s WEO 2021, noting that this contains a nil value for CO2 removals and hydrogen. In Figure 6 the IEA data refers to CO2 removals
from bioenergy with CCS and direct air capture with CCS only.
2 IEA 2021. “Net Zero by 2050. A Roadmap for the global energy sector”. All rights reserved. Pages 62-64.

Woodside Energy Group Ltd|

13

CASE STUDY:
NATURAL GAS IN DECARBONISING POWER GRIDS: THE AUSTRALIAN CASE STUDY
Australia’s National Electricity Market (NEM) provides acase study for the challenge facing the electricity system.
The Australian Energy Market Operator (AEMO) describes
this challenge as a “double transformation: electrification of
the economy while switching to firmed renewables” as thesource of power generation.1

They show some stark differences with implications for thegreenhouse gas emissions arising from the power system:

Electrification of the economy will increase demand on thegrid and require the scaling up of the electricity system as
more energy uses, such as passenger vehicles, switch overto electricity.

• The power systems in Victoria, NSW and Queensland sourced
most of their electricity from coal-fired generation, with lessthan half the share of renewables and less than a third theshare of natural gas than South Australia.

Switching to firmed renewables requires both replacing existingfossil-fuel generation (today, substantially coal fired), and also
increasing the firming capacity that can keep power supply
stable through renewable intermittency.

The South Australian system benefits, not only because of
the higher share of renewables but also because of the shareof natural gas-fired generation, which typically emits half theemissions of coal-fired generation.5

The AEMO’s Integrated System Plan (ISP) published in 2022
estimates that a doubling of total electricity delivered and a ninefold increase in utility scale variable renewable electricity (VRE)will be needed by 2050, in its most likely “Step Change” scenario.
The Step Change scenario is aligned with delivering Australia’s
net zero commitments.2

These examples highlight the twin potential of natural gas indecarbonising power, i.e gas can both supplement renewables(potentially enabling faster elimination of coal-fired power
generation) as well as firm them.

• Power generators located in South Australia used no coal.
Around two thirds of power generation was sourced fromrenewables, with the remainder overwhelmingly from gas(batteries provided around 1%).

This is a multi-decade task: the AEMO concludes that “by themid-2040s, [NEM] electricity supply is expected to be generated
almost exclusively from renewable resources, with energy
storages helping to manage their seasonality and intermittency,
and peaking gas-fired generation providing firming support.”3
In addition to firming services, natural gas-fired power
generation has the potential to accelerate the decarbonisationof the power system, from today. Figure 8 shows the 12 monthaverage mix of fuels used to generate electricity, in the four
Australian mainland states connected to the NEM.4

This is why Woodside sees the potential for the use of gas for
power generation in the decades ahead, as the power system
grows, decarbonises and remains stable.
In the longer term, renewables could also substitute for natural
gas use in power generation, with both hydrogen and batteries
providing stabilisation and storage. However, this implies peakrenewables capacity which is greater than 100% of demand,so that the excess power generation can be used to recharge
batteries and hydrogen storage for use at off-peak times.

FIGURE 8: EMISSIONS INTENSITIES AND FUEL MIXES IN THE NATIONAL ELECTRICITY MARKET4,6,7

Emissions
intensityof electricity
generation

Fuel mixof electricity
generation

Victoria

New South Wales

Queensland

South Australia

0.85 kg CO2-e /kWh0.73 kg CO2-e /kWh0.73 kg CO2-e /kWh0.25 kg CO2-e /kWh

4%

4%

30%

9%

24%
TOTAL
44,419 GWh

Brown coal

1
2
3
4
5
6

13%
TOTAL
66,060 GWh

66%Black coal

2%
33%

TOTAL
61,636 GWh

72%

Renewables (wind, solar, hydroelectricity)

TOTAL
11,887 GWh

77%Natural gas

65%

Other (battery, biomass and liquid fuels)

AEMO 2022: 2022 Integrated System Plan. © 2022 Australian Energy Market Operator Limited. Page 9.
AEMO 2022: 2022 Integrated System Plan. © 2022 Australian Energy Market Operator Limited. Page 23.
AEMO 2022: 2022 Integrated System Plan. © 2022 Australian Energy Market Operator Limited. Page 45.
Fuel mix percentages accessed online https://www.aemo.com.au/energy-systems/electricity/national-electricity-market-nem/data-nem/data-dashboard-nem on 31 January 2023.
IEA (2019). “The Role of Gas in Today’s Energy Transitions”. Page 4. All rights reserved.
Australian Department of Climate Change, Energy, the Environment and Water 2022. “Australian National Greenhouse Gas Factors.” Electricity generation emissions intensities have been sourced
from the emission factors in Table 1, pages 7-8. These factors represent the emissions from the consumption of electricity purchased from a grid.
7 Total electricity generated is sourced from the “Greenhouse and energy information by designated generation facility 2020-21” www.cleanenergyregulator.gov.au. On-grid only.

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Climate Report 2022

S ection 2 . 3

Market decarbonisation plans
In addition to analysis of the range of oil, gas and new energy demand estimated in climate-related scenarios, Woodside also
assesses the actual policies and plans being implemented in the jurisdictions that are relevant to its business. Selected examplesof these, drawn from countries’ Nationally Determined Contributions (NDC) to the goals of the Paris Agreement and from otherpolicy documents, are provided here.

Australia

In June 2022 Australia increased the ambition of its 2030 target, committing to reduce greenhouse gas emissions 43% below
2005 levels by 2030. Australia also reaffirmed its target to achieve net zero emissions by 2050. The Australian Government is
implementing a suite of new policies across the economy, including a Powering the Regions Fund (to support the developmentof new clean energy industries and the decarbonisation priorities of existing industry) and the introduction of declining emissions
baselines for Australia’s major emitters under the existing Safeguard Mechanism.

United States

In July 2021 the United States set an economy-wide target of reducing its net greenhouse gas emissions by 50-52% below 2005
levels in 2030. Signed in 2022, the Inflation Reduction Act aims to unlock $370 billion in climate and energy investment and is
expected to reduce carbon emissions by roughly 40% by 2030.1

EuropeIn December 2020, the EU updated its NDC and committed to an economy-wide net domestic reduction of at least 55% ingreenhouse gas emissions by 2030 compared to 1990. The REPowerEU Plan, put forward by the European Commission in May
2022, is a plan for “saving energy; producing clean energy; and diversifying our energy supplies.”2

Japan

Japan updated its First NDC on 22 October 2021. It states: “Japan aims to reduce its greenhouse gas emissions by 46 percent infiscal year 2030 from its fiscal year 2013 levels, setting an ambitious target which is aligned with the long-term goal of achieving
net zero by 2050. Furthermore, Japan will continue strenuous efforts in its challenge to meet the lofty goal of cutting its emission
by 50 percent.”
Japan also published an “Outline of Strategic Energy Plan” in October 2021.3 This plan assumes that LNG, while reducing from
37% in 2019, still makes up 20% of Japan’s electricity generation mix in 2030. Renewables double from 18% to 36-38% andnuclear power increases from 6% to 20-22%. Outside the electricity sector it says in respect of heating “We will pursue the shift
to natural gas on demand side and decarbonisation of gas through methanation and other means, which play a significant role indecarbonising heat demand. We will also work to further strengthen the resilience of gas.”

China

The People’s Republic of China updated its First NDC on 28 October 2021. It states: “On September 22, 2020, President Xi Jinping
declared, at the General Debate of the 75th Session of the United Nations General Assembly, that China would scale up its NDCs
by adopting more vigorous policies and measures, and aims to have CO2 emissions peak before 2030 and achieve carbon
neutrality before 2060.”“China will stringently curb coal-powered projects, set strict limitation on the increase in coal consumption over the 14th FYP
period and to phase it down in the 15th FYP period.4 The large scale development of wind and solar power will be accelerated,hydro power in accordance with local condition will be developed, nuclear power will be advanced in an ordered manner with thepremise of ensured safety, and peaking power including energy storage and gas-powered electricity will be stepped up rapidly.”“China will push forward technological breakthroughs in various fields to support the green and low-carbon transition, such as
renewable energy, hydrogen energy, smart grid and energy storage, CCUS, circular economy, low-carbon transportation andsmart cities, climate change impact and risk assessment.”

Republic of Korea

The Republic of Korea updated its First NDC on 23 December 2021. It states: “The Republic of Korea declared to move towards
the goal of carbon neutrality by 2050 in December 2020 and has finalized its 2050 carbon-neutrality scenarios as a follow-up
measure.”“The Republic of Korea is seeking to dramatically phase down coal-fired power generation while ramping up renewable power.
Aged coal power plants will be shut down or shift their fuels from coal to Liquefied Natural Gas (LNG). The uptake of solar andwind power will be scaled up as well.”“The Republic of Korea has markedly raised its 2030 target on the deployment of zero-emission vehicles such as the ones
powered by electricity and hydrogen.”

Refer to the United Nations Framework Convention on Climate Change (UNFCCC) secretariat at unfccc.int.

1
2
3
4

The White House 2023. “Building a clean energy economy: A guidebook to the Inflation Reduction Act’s Investments in clean energy and climate action”. Version 2. Pages 5 and 6.
Accessed online https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en on 01 February 2023.
Government of Japan, Agency for Natural Resources and Energy (METI) 2021. “Sixth Strategic Energy Plan.”
FYP is an abbreviation of Five Year Plan.
Woodside Energy Group Ltd|

15

S ection 3 : S T R A T E G Y

S ection 3 . 1

Woodside’s climate strategy
Our climate strategy is an integral part of our company strategy.
It has two key elements: reducing our net equity Scope 1 and 2 greenhousegas emissions, and investing in the products and services that our customers
need as they secure their energy needs and reduce their emissions.

FIGURE 9: WOODSIDE’S STRATEGYPROFITABLE

N
BO
R
CA

RE
SI
L
NT
IE

DIVERSIFIEDOPTIMISEVALUE ANDSHAREHOLDER
RETURNSLOW COSTLOW
ER

THRIVE THROUGH THE ENERGY TRANSITIONWOODSIDE’S CLIMATE STRATEGY IS AN INTEGRAL PART OF OUR COMPANY STRATEGYREDUCE OUR NET EQUITYSCOPE 1 AND 2 GREENHOUSEGAS EMISSIONSDESIGNOUT

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Climate Report 2022

OPERATEOUTOFFSETINVEST IN THE PRODUCTS AND SERVICES
THAT OUR CUSTOMERS NEED AS THEY
SECURE THEIR ENERGY NEEDS AND
REDUCE THEIR EMISSIONSCAPITAL
ALLOCATIONFRAMEWORKSUPPORT
VALUE CHAIN

PROMOTEMEASUREMENT
AND REPORTING

Reducing net equity Scope 1 and 2 greenhouse gas emissions is achallenge that we share with many businesses, organisations andhouseholds in society.
Our decarbonisation strategy explains how we plan toachieve our targets, and is described on pages 28-39of this report. Our progress in 2022 is summarised in
the Metrics and Targets on pages 40-47 of this report.
We recognise that as society reduces Scope 1 and 2 greenhousegas emissions, our customers will likely change the way theypurchase and use energy.
Woodside therefore aims to invest in products and services
so that our portfolio meets evolving demand for oil, gas,
new energy products and lower carbon services.
Our current portfolio is described on pages 18-25
and our capital allocation framework is describedon pages 26-27 of this report.
The uncertainty surrounding the pace and shape of the energy
transition creates both risk and opportunity for Woodside’s
strategy, business and financial planning in the short-, mediumand long-term.

On 1 June 2022, Woodside completed its merger with BHP’s
petroleum business. The merger is expected to have improved
Woodside’s ability to navigate the energy transition inseveral respects.
These include:• The merged entity has stronger cashflows, which can support
its investment in the transition. For example, Woodside’s
target to invest US$5 billion in new energy products and lower
carbon services by 2030 was conditional upon completion of
the merger.1• The merged entity’s portfolio is more diversified by geography
and product mix, containing a balance of LNG, pipeline gas
and oil. Each of these products has different characteristics
and different risk/reward profiles, improving resilience touncertainty in the energy transition.
Woodside’s net equity Scope 1 and 2 greenhouse gas emissions
reduction targets have been extended to the assets acquired
from the merger with BHP’s petroleum business.2 See page 40
for more information.

Our risk management process is described on pages
54-57. We have identified potential climate-relatedrisks and opportunities for our strategy, business andfinancial planning.

1 Individual investment decisions are subject to Woodside’s investment hurdles. Not guidance. Potentially includes both organic and inorganic investment.
2 Target is for net equity Scope 1 and 2 greenhouse gas emissions, relative to a starting base representative of the gross annual average equity Scope 1 and 2 greenhouse gas emissions over 2016-2020
and may be adjusted (up or down) for potential equity changes in producing or sanctioned assets with a final investment decision prior to 2021.

Woodside Energy Group Ltd|

17

S ection 3 . 2

Our portfolio today
Woodside has a portfolio of oil and gas assets that provide the foundation todeliver new growth opportunities. We are also developing a portfolio of new energy
projects.1 These projects have the potential for significant future growth as customer
demand increases and technology reduces the cost of supply.
Natural gas in our portfolio

Some relevant attributes of natural gas are:Natural gas is the dominant product in Woodside’s portfolio,
representing approximately 75% of equity production in 2022.
Following the merger between Woodside and BHP’s petroleum
business, Woodside increased its exposure to Australian pipeline
gas markets. However, most of our natural gas continues to be
sold as LNG.

• When used to generate electricity, natural gas emits aroundhalf the life cycle emissions of coal.3

Gas projects typically generate long-term cash flows and tend
to be resilient through the commodity price cycle. We target aninternal rate of return (IRR) greater than 12% and payback withinseven years.2 The business case for the Scarborough project,approved in 2021, exceeded these investment hurdles.

• More than half of the world’s natural gas supply is used in
sectors other than power generation, such as in industrial
applications and fertiliser manufacturing. Some of these havelower emissions intensity than power generation,5 and may beconsidered hard-to-abate.

We see an ongoing role for Woodside’s LNG and pipeline gas
to support our customers’ plans to secure their energy needs,
while they reduce their emissions.

• In the form of LNG, natural gas is transportable and flexible
between destinations, which is an advantage during an
uncertain and potentially volatile energy transition.6• The IEA advises that while renewable, nuclear and other low
carbon power sources are expected to meet most additional
power demand, gas and coal are expected to compete witheach other to fill the gap.4• While energy storage technologies (such as batteries)
continue to improve, natural gas in the meantime enables
cost-effective and reliable conversion of power grids
to renewable electricity because of its ability to “firm”
intermittent generation.7• Natural gas is also used for hydrogen manufacture byreforming. This process, including carbon capture and storage(CCS), is predicted by the IEA to represent almost half ofhydrogen production in 2030 in their Net Zero Emissions by
2050 Scenario (NZE).8
To achieve global net zero emissions, the greenhouse gas
emissions from natural gas usage will need to be abated,using technologies such as carbon capture utilisation andstorage (CCUS).

1
2
3
4
5
6
7
8

18

For definition of New Energy, see glossary.
Payback refers to ready for start-up (RFSU) + x years.
IEA 2019. “The Role of Gas in Today’s Energy Transitions”. Page 4. All rights reserved.
IEA 2022. “Coal 2022 - Analysis and Forecast to 2024”. Pages 11, 14 and 26-30. All rights reserved.
IEA 2022. “World Energy Outlook 2022”. Page 46. All rights reserved.
IEA 2020. Website accessed 2022. https://www.iea.org/commentaries/record-year-for-gasliquefaction-investment-lights-a-path-towards-market-flexibility. All rights reserved.
Wood, T. and Ha, J. (2021). “Go for Net Zero”. Grattan Institute. Page 30. (Firming means to support intermittent renewable generation by quickly ramping up or down to support stable supply).
IEA 2021. “Net Zero 2050 – A Roadmap for the Global Energy Sector”, page 76. All rights reserved.

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Climate Report 2022

Key challenge
The contribution of natural gas to the energy transition will be influenced bywhether it is sufficiently competitively priced. In 2022, the IEA reported thathigher gas prices (emerging due to the Russian invasion of Ukraine) were testing
the traditional arguments for the role of gas in the energy transition.
For example, the IEA noted that in India and Southeast Asia a challenging
environment for domestic gas production between 2010 and 2021 meant natural
gas became less competitive with coal. The result was around 30 bcm of natural
gas demand lost to gas-to-coal switching, leading to a 50 Mt CO2 increase inemissions which would have been avoided if natural gas had been used instead.1
Woodside’s existing LNG supplies and projects such as Scarborough cancontribute to increasing natural gas supply.

“Although the prospects for coal-togas switching have been adversely
affected by higher gas prices,
it would be technically possible,
for example, for one third of coal-fired
power output in Southeast Asia tobe substituted by existing gas-fired
power capacity… Doing this would
avoid around 120 Mt CO2 emissions,equivalent to 22% of emissions fromcoal-fired power plants in South
East Asia.”2- IEA World Energy Outlook 2022

Oil in our portfolio
Oil plays an important part in Woodside’s portfolio and is
expected to continue to do so. Oil projects typically have shorter
payback periods than LNG projects, which is expected to makethem more resilient to unexpected rates of change in demandthrough the transition. They also typically generate strong cash
flow, so we expect them to be an important part of funding
Woodside’s investment in new energy and lower carbon services.
Further oil exploration has the potential to discover new oil
resources which could prove to be more competitive thanexisting discovered resources, including in demand pathways
which are consistent with limiting global temperature rise.

In 2021, around 17% of global oil supply was produced for
non-energy uses, and even in the IEA’s NZE scenario, the volume
consumed for these purposes is expected to remain similarin 2050.4
On average, the Scope 1 and 2 greenhouse gas emissions arisingfrom conventional offshore oil production are lower than fromthe production of LNG, but when combusted, the Scope 3
emissions from using the product are higher.5,6
For future oil developments we target an IRR greater than 15%
and payback within five years.7

We expect that oil demand will be increasingly substituted outof the relatively easy-to-abate sectors such as power generation
and road passenger vehicle transportation, but remain stronger
for hard-to-abate and non-combustion uses such as aviationand synthetic materials.3

1
2
3
4
5
6
7

IEA 2022. “World Energy Outlook 2022”. All rights reserved. Page 408.
IEA 2022. “World Energy Outlook 2022”. All rights reserved. Page 405.
IEA 2021. “Net Zero by 2050 — A Roadmap for the Global Energy Sector”. Pages 45 and 102. All rights reserved.
IEA 2022. “World Energy Outlook 2022”, page 445. All rights reserved.
Wood MacKenzie 2019. Website accessed 2022. https://www.woodmac.com/news/opinion/greener-lng-is-vital-to-asias-sustainable-development/.
IEA 2017. Website accessed in 2022. https://www.iea.org/commentaries/the-environmental-case-for-natural-gas. All rights reserved.
Payback refers to ready for start-up (RFSU) + x years.

Woodside Energy Group Ltd|

19

New energy in our portfolio

Woodside capabilities in the new energy value chain

As the energy transition progresses, we expect demand toincrease for new energy products such as hydrogen andammonia, and lower carbon services such as CCS and carbon
capture and utilisation (CCU), collectively CCUS. Woodsideis investing to add these new products and services to ourportfolio, seeking to match the pace, scale and needs of ourcustomers as they determine their own decarbonisation
pathways. There are inherent uncertainties in this pace and scale.
We expect the development of new energy markets to be similar
to the development of the LNG industry many years ago, suchas in the need for government support and opportunities forcollaboration. Like then, we are building relationships across thevalue chain and aligning solutions to customers with options tomatch the scale and pace of the energy transition.

The oil and gas value chain is typically described in threesegments: upstream, midstream and downstream. We think of
the new energy value chain in similar segments (see figure 10).
• Upstream is about the location for power, water and otherinfrastructure. We target our facilities in locations that haveadvantaged access to low cost renewables and enabling
infrastructure.
• Midstream is similar to our existing core capabilities in the
LNG business and is our focus. We believe we can leverage ourexperience as a safe and reliable energy producer, supplying
industrial scale volumes to customers, and that this will be adifferentiating characteristic that is not easily attained. We
see a competitive advantage for Woodside in the processing,electrolysis and liquefaction segments of the value chain.1• Downstream is about customer relationships which we havebeen investing in for decades with our traditional LNG buyers
and we are extending that to new and emerging customers in
new energy.

FIGURE 10: NEW ENERGY VALUE CHAIN

UPSTREAM

Segments of thevalue chain

Key advantages andgrowth catalysts forWoodside’s H2 projects

Characteristics

MIDSTREAMDOWNSTREAM

Power generation

Processing electrolysis+ liquefaction

Liquids marketing

Customers

Advantaged locations
Power
Water
Infrastructure

Large scale
processing andexperience for safe,
reliable operations

Strong global
liquids marketing
capability andpresence

Years of strong
relationships
with key energy
customers

Deep market

High barrier toentry potential forhigher returns

Optimisation
lever

Traditional plus
new customers

Enabling capital

Investment focus

Enabling capital

Strategic focus aligned to Woodside’s core capabilities

120

Hydrogen and ammonia can be manufactured in different ways including electrolysis of water and by reforming natural gas. Where the manufacturing method leads to greenhouse gas emissions
these can be abated, for example with CCS.

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Climate Report 2022

End-use markets for hydrogen and ammonia
Hydrogen has been recognised as a key option to realise the net
zero greenhouse gas emissions commitments that governments
have announced in recent years. Ammonia can be used as acarrier for hydrogen, either to be used directly (as feedstock
for chemicals or as a fuel for power generation and maritime
transportation) or to be reconverted to hydrogen. They bothoffer the potential for decarbonising parts of the energy system
where other measures such as direct electrification are moredifficult or expensive, including sections of heavy industry
and long-distance transport.
Woodside sees potential in the following end-use markets:• Heavy duty transport: Liquid hydrogen is a potential substitutefor diesel in trucking fleets, utilising fuel cells that need liquidhydrogen for fuel. Woodside believes that with the support ofpolicies like the Inflation Reduction Act in the United States
there can be line of sight to cost parity with diesel for the fuelsupply, and that fuel cells will offer operational benefits overbattery-electric trucks.
• Power generation: Ammonia can be blended into the fuelused for existing coal-fired power generation. This has thebenefit of diversifying primary energy supply and reducing
greenhouse gas emissions from existing generation assets
including the longer term substitution of natural gas-fired
power generation. Woodside is participating in a joint
feasibility study on a potential ammonia supply chain
from Australia to Japan.1• Shipping and marine fuels: Ammonia as a marine fuel could
reduce emissions relative to the use of conventional fuels
for bulk carriers. Woodside is exploring opportunities withpotential partners and original equipment manufacturers.
• Industrials and chemicals: Hydrogen and ammonia are used
as industrial and chemical feedstocks today, and are primarily
manufactured from fossil fuels without carbon management.
This creates the potential for the same products to be
manufactured, but through renewable electrolysis or fossil
fuels with CCS.

Carbon solutions in our portfolio
Some technologies can abate emissions from conventional
processes, by capturing greenhouse gases and durably storingthem out of the atmosphere.

Carbon capture and storage
Carbon capture and storage has the potential to offer
significant abatement volumes for Woodside and its customers.
The capabilities required to identify reservoirs suitable for CCS
and to safely inject and store the CO2 are analogous to those
employed in our hydrocarbon business.

Woodside, as a participant in various joint ventures, wasrecently awarded three greenhouse gas licenses across Australia
to progress CCS. Woodside is also a participant in the Gippsland
Basin Joint Venture, which is progressing a feasibility study into
the development of a south-east Australian carbon capture andstorage hub.

Carbon to products
Woodside is investing in technology advancement to convert
carbon into useful products at the point source of the carbon
generation. Potential products include fuels, proteins and bulk
materials for use in the construction sector. This is an emerging
technology and Woodside has been collaborating with several
companies to drive the development of these CCU products.

Offsets
Woodside is developing a portfolio of carbon credits tocontribute to the achievement of its net equity Scope 1 and 2
greenhouse gas emissions targets. These also have the potential
to be bundled with product sales if customer demand is present,
at a scale which is able to be supported. For more information
about offsets, see pages 34-35.

2022 progress
For progress made in advancing CCS and technology to convert
carbon into useful products, please see page 47.
“CO2 capture and subsurface injection is a maturetechnology for gas processing and enhanced oil recovery.
In contrast to the oil and gas sector, CCS is less maturein the power sector, as well as in cement and chemicals
production, where it is a critical mitigation option.
The technical geological CO2 storage capacity is estimatedto be in the order of 1,000 gigatonnes of CO2, which ismore than the CO2 storage requirements through 2100
to limit global warming to 1.5°C, although the regional
availability of geological storage could be a limiting factor.
If the geological storage site is appropriately selected andmanaged, it is estimated that the CO2 can be permanently
isolated from the atmosphere. Implementation of CCS
currently faces technological, economic, institutional
ecological-environmental and socio-cultural barriers.
Currently, global rates of CCS deployment are far below
those in modelled pathways limiting global warming
to 1.5°C or 2°C. Enabling conditions such as policy
instruments, greater public support and technologicalinnovation could reduce these barriers.”2– IPCC AR6-WG3 report1

Woodside is participating in a joint feasibility study on a potential ammonia supply chain from Australia to Japan with Japan Oil, Gas and Metals National Corporation (JOGMNC), Marubeni,
Hokuriki Electric, Kansai Electric, Tohoku Electric and Hokkaido Electric.
2 IPCC 2022. “Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change” Summaryfor Policymakers paragraph C.4.6.

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21

Managing physical risks to our portfolio
Climate change creates potential risks and opportunities
for Woodside’s strategy, business and financial planning.
Our process for identifying and managing risks, and asummary of potential climate-related risks and opportunities
is provided on pages 56-57.
For illustrative purposes, a focus is provided here on one of
the categories for climate-related risks in the TCFD framework,
which is physical risks. Physical risks can arise from both event
driven (acute) and longer-term shifts (chronic) in climate
patterns. These physical risks may have financial implications
for organisations.
For example, in the oil and gas industry, this might include
harsh weather or ocean conditions that can damage or disrupt
the ability to safely operate offshore facilities, shipping andonshore processing plants. Woodside has decades of experience
designing and operating facilities located in harsh environments.
Woodside’s facilities are subject to oceanic conditions and arelocated in regions that experience tropical cyclones, hurricanes
and high ambient temperatures.

Design of Woodside’s facilities
Each Woodside facility is built in accordance with a basis ofdesign (BOD). This details, amongst other things, the climaticconditions that facilities need to withstand. Each BOD isreviewed against updates to climatic conditions and, whererequired, actions are taken to update procedures or replace/
refurbish equipment to withstand the revised conditions.
The requirements for maximum air temperature and sea levelin the BODs are aligned to IPCC Shared Socioeconomic
Pathway 2-4.5 (the SSP 2-4.5) in which global temperaturesrise by 2.7°C by the end of the century.1 Design sensitivities
are also performed against SSP 5-8.5 pathway in which
global temperatures rise by 4.4°C. (Note that the BOD isintended to describe harsh environmental conditions that afacility may need to withstand, hence the alignment with andsensitivities for higher temperature outcomes by 2100 rather
than 2°C or 1.5°C global temperature rise outcomes).2
Woodside’s assets are designed to withstand extreme weather
events that occur in the range of 1 in 1,000 years to 1 in 10,000
years. This is also specified in each BOD.

Physical risks could also impact emerging new businesses in
new energy products and lower carbon services. For example,
this could include bushfire or drought risk for nature-basedcarbon credit development projects, or access to water for use
in electrolysis.

Woodside’s capability
Woodside has specialised teams that support the safe and reliable design and operation of our facilities. Some relevant teams
within the Woodside organisation include:
Meteorology andOceanography (Metocean)

Metocean specialists quantify the potential impact and effect of meteorological and oceanographic conditions
on Woodside’s facilities. This includes waves, climate variability, tropical cyclones, hurricanes, air temperatureand rainfall. This analysis is used to define technical requirements for existing and new facilities.

Health, Safety andEnvironment

Health, safety and environment specialists support the business by providing guidelines on safe operating
conditions. Examples include the wellbeing of people working in high ambient temperature environments
and maintenance of safety critical systems and equipment.

Asset Management

Asset management teams are responsible for managing asset specific risks, such as structural integrity risks
from weather related events and risks to production forecasts from weather related outages. Regular risk
governance meetings are held to review the management of these risks.

Emergency Management

Emergency management specialists support the business in the development of emergency response plans
and capabilities and with response to any emergency events. This includes preparation for and responseto tropical cyclones and hurricanes.

1This is based on outputs from the Coupled Model Intercomparison Project (CMIP). CMIP coordinates climate model simulations worldwide under the World Climate Research Program (WCRP).
CMIP supports the IPCC Shared Socioeconomic Pathways. These Shared Socioeconomic Pathways explore the implications of future socioeconomic development on climate change mitigation,
adaptation and land use.
2 The approach to using IPCC SSPs in this paragraph has historically been used at heritage Woodside assets, and will be incorporated across the merged portfolio over time.

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Climate Report 2022

Examples of physical risk management
Climate change is expected to lead to more frequent and/or more severe cyclones or
hurricanes. These have the potential to damage equipment, cause increased production
outages and/or reduce asset life.
Woodside has assets that have operated in cyclone or hurricane affected regions for decades.
These onshore and offshore assets are designed and maintained for safe operations in
extreme conditions.

CYCLONESOR HURRICANES

Procedures are in place for pre-cyclone/hurricane season readiness, for preparations
immediately prior to a tropical cyclone, and for disconnection and demobilisation to keeppeople and assets safe during cyclonic events.
The design and maintenance of assets and the emergency response procedures were tested
during the severe Tropical Cyclone Damien in the North West of Australia in February 2020and during Hurricane Ida in the Gulf of Mexico in August 2021. No major damage occurredand production was resumed following these events.
Production planning and forecasting includes assumptions for cyclones/hurricanes and severeswells. These assumptions are informed by data from previous seasons along with forecasts
for upcoming El Niño and La Niña cycles.

Climate change is expected to lead to changes in rainfall volume and intensity. This could
cause flooding or drought, which might impact Woodside’s facilities and/or carbon
origination projects.

RAINFALLOR FLOODING

Drainage systems on Woodside’s facilities are designed to meet relevant international andAustralian standards. In regions impacted by cyclones, drainage and containment systems
are also inspected prior to cyclone season, as there may be intense rainfall or flooding during
this season.
Exposure to drought risk and flooding in our carbon origination projects is managed byholding a diverse geographic distribution of projects.

Climate change is expected to lead to increased frequency and/or severity of bushfires due
to hotter and/or drier climates.

BUSHFIRES

Where Woodside operates oil and gas producing assets located in bushfire-prone areas,
it incorporates bushfire preparation as a standard part of emergency response planning.
In addition, the geographical location of many of our oil and gas producing assets haveinherently lower exposure to bushfire risk, for example, because they are surrounded byshrubs/rock or are offshore.
Woodside’s carbon origination portfolio includes planting trees. Diversity in tree planting
locations reduces the potential impacts of bushfire risk on the portfolio.

Climate change is increasing ambient temperatures. This could create hotter working
conditions, impacting the wellbeing of our people and the operability of some equipment.

WARMER AMBIENTTEMPERATURES

The health and wellbeing of our people is inherent in our culture and operational practices.
For example, sun protection and hydration are regularly included as topics in site
communications and safety briefings. Facilities in the North West of Australia experience highambient temperatures. Major maintenance campaigns, where the number of people on site issignificantly increased, are targeted for execution in the cooler months to minimise exposure toheat stress.
Production planning and forecasting includes assumptions for ambient temperature,recognising that higher ambient temperatures can reduce plant performance.

Climate change is resulting in an increase in sea levels with the potential to impact offshore
and coastal facilities.

RISING SEA LEVELSAND STORM SURGE

Woodside’s facilities are designed in accordance with BODs, which include sea levelassumptions where relevant for the facility. An allowance for sea level rise is included in thecalculations of extreme total water level (the combination of sea level, tidal elevation, storm
surge and wave crest elevation). The assumptions for sea level in the BOD documents are
based on IPCC Shared Socioeconomic Pathways.1,2
Storm surges in the Karratha region in the North West of Australia are also included in cyclone
preparation plans.

1 The IPCC Shared Socioeconomic Pathways explore the implications of future socioeconomic development on climate change mitigation, adaptation and land use.
2 The approach to using IPCC SSPs in this paragraph has historically been used at heritage Woodside assets, and will be incorporated across the merged portfolio over time.

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23

S ection 3 . 3Financial resilience testingof our portfolio
Woodside uses a range of climate scenarios to inform its
strategy and planning and to test the financial resilience of ourportfolio of producing assets and sanctioned projects. In thissection, we describe the potential impact of the three scenarios
published in the IEA’s 2022 World Energy Outlook (WEO).
The IEA scenarios were selected for the analysis presented here
because they are publicly available, and provide a wide rangeof potential energy transition pathways linked to different
climate outcomes (see figure 11).
This analysis estimates the impact of each IEA scenario on
Woodside potential average annual free cash flow (FCF).
A summary of insights from the scenario analysis is:• FCF is positive in all tested scenarios, including in NZE and theIEA Announced Pledges Scenario (APS) that are aligned with
the Paris Agreement outcomes.
• FCF from 2023 to 2026 is lower than 2027-2031 due to highcapital expenditure during this period for Scarborough,Pluto Train 2 and the Sangomar Field Development Phase 1.1• FCF generation increases from the mid 2020s after
Scarborough start up, and then declines due to the natural
field decline of older assets in our portfolio. Note that potential
new investments are discussed in the capital allocation
framework section of this report on pages 26-27.
• Oil and gas prices are the key value drivers and have a greater
impact on FCF through to 2040 than carbon pricing.

Limitations of the analysis
Scenario analysis has limitations and is based on a wide range ofassumptions. It involves interpreting each scenario to generateannual average price points (see figure 12). It further requires
isolating all variables except for commodity pricing (including
carbon price) to enable examination of climate-related factors.
IEA scenarios have been used to enhance independence
and comparability of scenario analysis outcomes and do not
represent the outcomes of any internal assessment Woodsidehas undertaken in relation to possible future commodity andcarbon pricing.
The scenario analysis, therefore, does not include othermacroeconomic and geopolitical factors that could influencecommodity pricing. Nor does it include decisions Woodside
could make in response, such as acquisitions, divestments or
cost reduction. It also does not include the potential impact of
new Woodside investment decisions, which are discussed in thecapital allocation framework section starting on page 26-27.
This analysis must therefore not be interpreted as Woodsideinvestment guidance. These are scenarios not forecasts andno likelihood is assigned to any of these scenarios eventuating.

FIGURE 11: OIL, GAS AND HYDROGEN DEMAND
IN IEA SCENARIOSScenario analysis methodology

The analysis applies a price on carbon for all emissions thatexceed the profile created by our regulatory obligations, ournet equity Scope 1 and 2 greenhouse gas emissions reduction
targets of 15% by 2025 and 30% by 2030, and our aspiration
for net zero equity Scope 1 and 2 greenhouse gas emissions
by 2050.2 Carbon pricing is not applied to Scope 3 emissions as
this is accounted for in the demand (and therefore the oil pricecalculated) in each scenario by the IEA’s World Energy Model.3

EJ

0

2020

|

Climate Report 2022

2040

2050

200

100

Demand for oil andgas is modelled tocontinue through2050 in all scenarios
but to varying
degrees. Hydrogen
demand is alsomodelled to vary.
It grows in the NZE
and APS scenarios
in particular.

0

2020

2030

2040

2050

Low carbon hydrogen demand

300

200

100

0
2020

24

2030

Natural gas demand

300

EJ

The analysis is performed by substituting the IEA’s commodity
pricing (including carbon price) scenarios from its 2022 WEO
into Woodside’s existing portfolio economic model, which
is otherwise unchanged. The commodity and carbon priceassumptions used in the analysis are provided in figure 12.

200

100

EJ

Average annual FCF is used as a financial indicator in thisanalysis because it identifies the cash available to informfuture capital allocation decisions prior to the application of
accounting treatment.

Oil demand

300

2030

2040

2050

Stated Policies
Announced Policies
Net Zero Emissions

FIGURE 12: MODELLED IMPACT OF CLIMATE SCENARIOS ON POTENTIAL AVERAGE ANNUAL FREE CASH FLOW FROMCURRENT PRODUCING AND SANCTIONED ASSETS (NOT GUIDANCE)

Actual results
IEA NZE
IEA APSIEA STEPS

Average Annual Free Cashflow US$b (Nominal)

9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2018 - 2022
(Actuals)

2027 - 2031

2023 - 2026

2032 - 2036

2037 - 2040

Oil price (US$/bbl, Brent)4 , North Asian LNG price (US$/MMBtu)4 and Carbon price (US$/tCO2-e)5 average real 2022
IEA NZE
IEA APSIEA STEPS

59

18

100

38

6

135

33

6

169

31

6

199

88

20

98

70

9

130

65

9

154

65

9

172

92

21

80

85

11

80

85

11

80

88

11

80

* 2018-2022 average real terms 2022 Brent price was US$73/bbl.

Description of the IEA scenarios used
The IEA’s WEO explores three main scenarios.6 These scenarios are not predictions. The IEA does not have a single view on
the future of the energy system. In contrast to the 2021 edition of the WEO, they do not vary the assumptions about publichealth and economic recovery implications across the scenarios. A summary of the scenarios is as follows:
The Net Zero Emissions by 2050
(NZE) Scenario shows a narrow
but achievable pathway for the
global energy sector to achieve net
zero CO2 emissions by 2050, withadvanced economies reaching net
zero emissions in advance of the otherscenarios. It is consistent with limiting
the global temperature rise to 1.5°C
without a temperature overshoot(with a 50% probability).

The Announced Pledges Scenario(APS) takes account of all the climate
commitments made by governments
around the world including Nationally
Determined Contributions as well
as longer term net zero emissions
targets, and assumes that they will
be met in full and on time. In the APS,
emissions peak in the mid-2020s andfall to 12 Gt in 2050, resulting in a
projected global median temperaturerise in 2100 of 1.7°C.

The Stated Policies Scenario (STEPS)
explores where the energy system
might go without additional policy
implementation. In the STEPS, energyrelated CO2 emissions reach a plateau
around 37 Gt before falling slowly to
32 Gt in 2050, a trajectory that would
lead to a 2.5°C rise in global averagetemperatures by 2100.

1 Modelled based on current equity assumptions within portfolio: Sangomar 82%, Scarborough 100% and Pluto Train 2 51%.
2 Target is for net equity Scope 1 and 2 greenhouse gas emissions, relative to a starting base representative of the gross annual average equity Scope 1 and 2 greenhouse gas emissions over 2016-2020
and may be adjusted (up or down) for potential equity changes in producing or sanctioned assets with a final investment decision prior to 2021.
3 IEA 2022. “World Energy Model Documentation”. All rights reserved.
4 Based on data from IEA 2022. “World Energy Outlook 2022” as modified by Woodside analysis. Woodside used interpolation techniques to estimate Brent annual price points in between the years
that the IEA disclose prices for. For gas pricing assumptions all non-contracted LNG volumes were assessed at IEA’s Japan import price, as a proxy for North Asian LNG spot price. Woodside usedinterpolation techniques to estimate annual gas price points in between the years that the IEA disclose prices for. For oil linked LNG contracts, prices are derived from the Brent forecasts and theterms of the contracts.
5 Based on data from IEA 2022. “World Energy Outlook 2022” as modified by Woodside analysis. The IEA only provide carbon prices from 2030 onwards. As a result, Woodside used a starting point of
US$80/tCO2-e consistent with internal carbon pricing. Woodside used the 2022 starting price point and the IEA’s published 2030 and 2040 carbon prices for each scenario to interpolate annual pricepoints through to 2040.
6 IEA 2022. “World Energy Outlook 2022”. All rights reserved.

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25

S ection 3 . 4

Capital allocation framework
Woodside aims to thrive through the energy transition by working to build
a low cost, lower carbon, profitable, resilient and diversified portfolio of oil,gas and new energy assets.1
On pages 10-15 of this report, we described the potential role ofoil, gas and new energy through the transition. On pages 18-25
we described our current portfolio. In this section, we describe
how we incorporate our assessment of climate-related factors
into our consideration of new investments in oil, gas and newenergy, and our assessment of how climate-related factors might
impact our strategy, business and financial planning.

Our capital allocation framework sets target investment criteria
for oil, gas and new energy opportunities. Not all energy
investments are the same, and these three investment types
are fundamentally different in nature and have different
risk/return profiles. This capital allocation framework guides
our efforts to create a diversified and flexible portfolio whichis responsive to changes in demand for our products.

Future growth of our portfolio through new projects andinvestments is assessed according to market analysis anda disciplined capital allocation framework, including climaterelated considerations.

The Scope 1 and 2 greenhouse gas emissions from projects in all
capital allocation categories need to be managed to meet our
net equity emissions reduction target of 30% by 2030 and a net
zero aspiration by 2050 or sooner.2

FIGURE 13: CAPITAL ALLOCATION FRAMEWORK

OIL

GAS

OFFSHORE

Focus

Generate high returns tofund diversified growth,
focusing on high quality
resources

Characteristics

High cash generation
Shorter payback period
Quick to market

Opportunity
targets

IRR > 15%
Payback within 5 years3

Emissions
reduction

PIPELINE

NEW ENERGY
LNG

Leveraging infrastructure tomonetise undeveloped gas,including optionality for hydrogen

Stable long-term
cash flow profile
Resilient tocommodity pricing

Long-term
cash flow
Strong forecast
demandUpside potential

IRR > 12%
Payback within 7 years3

DIVERSIFIED
New energy products andlower carbon services to reduce
customers’ emissions; hydrogen,ammonia, CCUS

Developing market
Lower capital requirement
Lower risk profile

IRR > 10%
Payback within 10 years3

30% net emissions reduction by 2030, net zero aspiration by 2050 or sooner2

1 Please see glossary for a definition of how Woodside uses the term lower carbon portfolio.
2 Target is for net equity Scope 1 and 2 greenhouse gas emissions, relative to a starting base representative of the gross annual average equity Scope 1 and 2 greenhouse gas emissions over 2016-2020
and may be adjusted (up or down) for potential equity changes in producing or sanctioned assets with a final investment decision prior to 2021.
3 Payback refers to RFSU + X years.

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Climate Report 2022

How we incorporate climate-related factors into oil and gas investment decisions
Woodside uses market analysis and a disciplined capital allocation framework to inform investment decisions as we growand diversify our portfolio. In addition to the risk and reward balance described in our capital allocation framework, for future
investment decisions Woodside’s consideration of climate-related factors may include those described below.
None of these individual factors is sufficient on its own to provide a definitive answer to the impact of climate-related factors
on investment opportunities. However, together they can inform a broad-based consideration of risks, opportunities, competitivenessand resilience, and contribute to understanding the potential impact of climate-related risks on our strategy, business andfinancial planning.

Scope 1 and 2 greenhouse gas emissions

Analysis using a range of economic assumptions

Commercial analysis to support investment decisions
includes the application of an internal carbon price toall emissions that exceed the profile created by ourregulatory obligations and our net equity Scope 1 and 2
greenhouse gas emissions targets and aspirations.

Assumptions about macroeconomic variables are
considered in the business case. These assumptions
are informed by a wide range of externally publishedscenarios, such as those from the IEA, and are also
informed by the judgment of Woodside management
about the range of credible future scenarios, including
both Paris-aligned and non-Paris-aligned outcomes.

Asset decarbonisation plans are developed by all
projects, including options to abate emissions as wellas an estimate of any residual offset demand. Assetdecarbonisation plans are further described on page 29.

Testing resilience across a range of pathways
to 1.5°C and 2°C outcomes
The range of oil and gas use levels in pathways that canlimit warming is large and is described in the section on
oil and gas in the energy transition, see pages 10-14.
Woodside intends to build a portfolio which is, among
other things, low cost, lower carbon and resilient to thewidest range of outcomes. Scope 1 and 2 greenhouse gas
emissions intensity is included in this analysis.

Woodside’s life cycle intensity of production (measured
as Scope 1, 2 and 3 emissions divided by energy sold)was 63 gCO2-e/MJ in 2022.1
When considering a new investment decision, we canevaluate how that particular investment could change thismetric. This can give Woodside a broad view of how newinvestments could affect our long-term carbon footprint,
and allow comparison with other companies.

Cashflow scenario analysis

Climate-related risks and opportunities

Woodside considers climate-related scenario analysis(see page 24-25 of this report). This analysis considers
how the FCF of Woodside’s portfolio of producing assets
and sanctioned projects could vary over time, using thethree scenarios published in the IEA’s WEO.

Woodside uses the framework proposed by the
TCFD to understand the risks (transition and physical)
and opportunities arising from the energy transition.
A summary of this assessment for Woodside’s current
portfolio of producing assets and sanctioned projects
is on pages 56-57 of this report.

For future investment decisions about major projects,
we have the opportunity to evaluate how the investment
decision could change the outcome of a similar analysis.
This can give Woodside a view on the resilience of its
portfolio to different climate-related scenarios, including
the risk of investing in assets that could be stranded.

1

Portfolio life cycle intensity of production

When considering a new investment decision, we
can consider how that investment could change thisassessment. This can give Woodside a view of how
our aggregate exposure to climate-related risks andopportunities could change with a new investment,
and therefore whether that investment could takeWoodside beyond its risk appetite.

For discussion of Woodside’s Scope 3 emissions including the challenges to reporting them, see page 36-39. Emissions intensity is calculated based on net equity Scope 1 and 2 greenhouse gas
emission as well as equity Scope 3 (use of sold product) and Woodside’s equity production. Metric excludes emissions and production related to traded hydrocarbons.

Woodside Energy Group Ltd|

27

S ection 3 . 5

Decarbonisation strategy
As well as investing in the products and services our customers need, the second
key element of Woodside’s climate strategy is to reduce its net equity Scope 1 and
2 greenhouse gas emissions. To pursue this, we have developed a decarbonisation
strategy.1
In 2020, Woodside announced targets for near- and mediumterm emissions reduction below the gross annual average equity
Scope 1 and 2 greenhouse gas emissions over 2016-2020.
These targets are to reduce net equity Scope 1 and 2 greenhousegas emissions by:• 15% by 20252• 30% by 20303
below a starting base representative of annual average grossequity emissions for 2016-2020. Woodside also announced
an aspiration of net zero equity Scope 1 and 2 greenhouse gas
emissions by 2050 or sooner.4
Woodside’s targets are absolute reduction targets from anhistorically established starting base, aiming to deliver net
emissions reduction even as Woodside grows its business andmakes new investment decisions.
Greenhouse gas emissions, energy values and global warming
potentials are estimated in accordance with the relevant
reporting regulations in the jurisdiction where the emissions
occur (e.g. Australian National Greenhouse and Energy Reporting(NGER), US EPA Greenhouse Gas Reporting Program (GHGRP)).
Australian regulatory reporting principles have been used foremissions in jurisdictions where regulations do not yet exist.
Equity share is calculated in accordance with the GHG Protocol’s
Corporate Accounting and Reporting Standard: “Under theequity share approach, a company accounts for GHG emissions

from operations according to its share of equity in the operation.
The equity share reflects economic interest, which is the extent
of rights a company has to the risks and rewards flowing froman operation”.5
Woodside plans to achieve our net equity Scope 1 and 2
greenhouse gas emissions reduction targets in three ways:• Avoiding greenhouse gas emissions through the way wedesign our assets• Reducing greenhouse gas emissions through the way weoperate our assets• Originating and acquiring carbon credits to use as offsets
for the remainder.
Avoiding and reducing emissions are our priority. We can reduce
the risks of future price and availability constraints in carbon
markets if we prioritise emissions reduction at our facilities.
However, subject to appropriate integrity, a tonne of emissions
avoided through an offset has an equivalent greenhouse impact
to a tonne that has been avoided at our facilities.
The principal way that we prioritise avoiding and reducing
emissions is to pursue opportunities in the design and operationof our assets that are economically viable when assessed using
an internal long-term cost of carbon, currently US$80/tCO2-e(real terms 2022). This exceeds the current market price ofcarbon credits. The generic ACCU spot price was around A$30/t(approximately US$20/t) in the most recent Quarterly Carbon
Market report from the Clean Energy Regulator.6

SCOPE 1 AND 2 TARGETS

15%
1
2
3
4

by
20252

30%

by
20303

For definition of decarbonisation, see glossary.
This means net equity emissions for the 12-month period ending 31 December 2025 are targeted to be 15% lower than the starting base.
This means net equity emissions for the 12-month period ending 31 December 2030 are targeted to be 30% lower than the starting base.
Target is for net equity Scope 1 and 2 greenhouse gas emissions, relative to a starting base representative of the gross annual average equity Scope 1 and 2 greenhouse gas emissions over 2016-2020
and may be adjusted (up or down) for potential equity changes in producing or sanctioned assets with a final investment decision prior to 2021.
5 World Resources Institute and World Business Council for Sustainable Development 2014. “GHG Protocol: a corporate accounting and reporting standard.” Page 17.
6 www.cleanenergyregulator.com.au. Quarterly Carbon Market Report September Quarter 2022, published 17 November 2022.

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Climate Report 2022

Operational practices
Near-term emissions reduction can be achieved at ourexisting facilities through changes to operating practices.
Environmental and emissions performance has formed partof Woodside’s focus on safe, reliable and cost-competitive
operations for many years. This means that many of the simpler
operate out improvements to reduce greenhouse gas emissions
have already been implemented through changes to operating
practices.
Decarbonisation actions differ depending on each asset’s life
cycle and context. Pluto has focused on activities targeting
reliability. The North West Shelf (NWS) has prioritised efficiency
and debottlenecking at Karratha Gas Plant (KGP) as NWS
production declines. The Australian floating production storageand offloading (FPSO) facilities have focused their activities
on reducing flare and fuel usage and delivering reliability
improvements.
Woodside continues to explore potential further changes to its
operating practices that can reduce its Scope 1 and 2 greenhousegas emissions. Activities led by asset teams through 2022 areforecast to deliver approximately 25 kt CO2-e/year ongoing
equity Scope 1 and 2 greenhouse gas reductions.1

Asset decarbonisation plans
During 2022, Woodside developed asset decarbonisation plansfor each operated asset and project in the heritage Woodsideportfolio to identify opportunities to be pursued, including
further technology to be developed where needed.

The plans identify potential decarbonisation opportunities
prior to the application of technology or cost constraints.
The individual asset and project decarbonisation plans werethen rolled together to create an integrated portfolio view.
This was used to rank and select cost effective priorities for
decarbonisation investment and planning on an enterprise
wide basis.
In the 2022 asset decarbonisation planning cycle, Woodsideselected around 30 decarbonisation opportunities, including
energy efficiency projects, equipment modifications, lower carbon
power and process optimisation. These opportunities are notcertain to proceed but they are now included in asset level work
programs, in order to mature cost and engineering definition.
If implemented in full, Woodside estimates this activity set could
realise approximately 10 Mt CO2-e abatement (cumulative)prior to 2050 and could result in a 300 kt CO2-e reduction inemissions in 2030, compared to the equivalent plan at the timeof the 2021 Climate Report (see figure 14).2
These plans are targeted to be extended during 2023 to cover
heritage BHP operated assets, and are expected to identify
additional cost efficient decarbonisation opportunities.
The asset decarbonisation plans will be reviewed annually inline with asset strategic planning processes to maintain theircurrency and to continue to identify opportunities as costs
and technologies improve. We will also work with our joint
venture participants and operators to understand and quantify
decarbonisation opportunities at non-operated assets.

FIGURE 14: POTENTIAL IMPACT OF 2022 ASSET DECARBONISATION PLAN2

Scope 1 and 2 emissions (Mtpa CO2-e)

5

Design Out
4

Operate Out
Offset3

2

Potential impact of asset
decarbonisation plans

10
2016-2020
starting baseProduction
growth to 2030

Emissions to beabated, as estimatedin Climate Report
2021

Emissions to beabated, as estimatedafter 2022 asset
decarbonisation plan

2030 net equity
Scope 1 and 2
emissions target

1

Greenhouse gas savings are estimated using engineering judgment by appropriately skilled and experienced Woodside engineers. Emissions quoted are equity share reductions acrossAustralian operations.
2 Indicative only, not guidance. Potential impact of opportunities identified in Australian Operations asset decarbonisation plans assuming all opportunities identified in the 2022 asset decarbonisation
plan progress to execution. Heritage Woodside portfolio and working interest prior to the merger.

Woodside Energy Group Ltd|

29

Beyond 2030: Technology decarbonisation
plan
The asset decarbonisation plans developed during 2022 also
identified emissions reduction opportunities that could not
be prioritised for further development, either because they
are not technically mature or because they are not currently
commercially viable when assessed using Woodside’s long-term
cost of carbon assumption of $80/tCO2-e (real terms 2022).
However, with further development these opportunities have thepotential to offer abatement on a scale that would deliver a stepchange in emissions reduction, in particular beyond 2030.
Because of their enterprise wide nature, these technology
opportunities are pursued through a portfolio level technology
decarbonisation plan rather than through asset level planningand engineering processes.
These opportunities include:• Integrated carbon solutions, such as capturing carbon dioxide
so that it can either be durably stored in geological reservoirs(CCS) or converted into useful products (CCU). Different
existing emissions sources vary in the concentration of theiremissions, with the higher concentrations potentially offering
earlier viable opportunities.

• Switching of existing uses of electricity to lower carbon power(for example, renewables or gas with CCUS), potentially withenergy storage technologies to stabilise supply.
• Electrification of operating facilities. The opportunity for
retrofitting electrification will vary across different facility
types (for example, offshore platforms have different power
requirements to liquefaction facilities), as well as their ages
and expected remaining asset life.
Note that some of these opportunities are alternatives to eachother. For example, 67% of Woodside’s emissions in 2022 arosefrom fuel combustion to power our assets. These emissions
can be abated either by CCUS, or by electrification. However
by pursuing multiple technologies we expect to increase thepotential for a successful outcome that could enable adoption.
The technology decarbonisation plan draws on inputs such asa research partnership with Monash University. The Woodside
Monash Energy Partnership has been extended for 2023-2025
at a cost of A$11 million and is summarised in figure 15 below.
Industry partnerships also include a memorandum of
understanding on cooperation entered into with Baker Hughes in
2022 to pursue development of technologies and opportunities
for decarbonisation, including revenue generation andenablement of growth.

FIGURE 15: WOODSIDE MONASH ENERGY PARTNERSHIPThe pilot programs of the Woodside Energy Monash Energy Partnership are designed to complement Woodside Energy’s strategy
by partnering with expertise and infrastructure at Monash University in the following fields:
Input:
Sunlight

30

Input:
Renewable
Electricity

Input:
Air

Large-scale solar

Direct air capture• Re-imagining solar photovoltaic
PV at a utility-scale to drive
down the levelised cost ofenergy by maximising theenergy density of shipped PV
and reducing the deployment
costs.
• This project is developing
streamlined ultra-thin and low
weight Si-PV, alongside novel
deployment and solar tracking
solutions.
• A 10 kW pilot plant has
currently been developed anddeployed as a proof of concept.

• Direct air capture (DAC) of
CO2 has been identified as aprospective pathway to mitigate
the effects of global warming.
• The aim of this development isto design an energy and costefficient DAC technology thatis economically scalable andwill cost less than $150 /tCO2
captured.
• Current work has developed
prototypes for testing
adsorbents, contactors, andprocess conditions for both feed
and regeneration conditions.
• The final solution will bescalable to 1,000 t/day either
through sizing or modularity.

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Climate Report 2022

Input:CO2

Biochemical waste gas
conversion• Synthetic biology is turning
biology into the manufacturing
paradigm of the future.
• This project uses
chemoautotrophic bacteria toefficiently convert waste gases
into protein-rich biomass.
• By utilisation of waste gases,
including CO2, CH4, and CO,
it provides a novel biologicalprocess to convert waste gas
emissions into sustainable
feeds.

Methane emissions
After carbon dioxide, methane has made the second largest
contribution to human induced climate change and is believed tohave contributed to around 30% of the global temperature riseto date.1
The Global Methane Initiative estimated that in 2020 about 24%
of global human induced methane emissions came from the oiland gas sector. Other sources include agriculture, coal mines,
municipal solid waste and wastewater.2
A Global Methane Pledge was launched at the Glasgow Climate
Summit, and stated that rapidly reducing methane emissions
from energy, agriculture and waste can achieve near-term gains
this decade and is regarded as the single most effective strategy
to keep the goal of limiting warming to 1.5°C within reach.
Countries signing the Pledge agree to take voluntary actions
to contribute to a collective effort to reduce global methane
emissions at least 30% from 2020 levels by 2030, which could
eliminate over 0.2°C warming by 2050.3 Australia signed thePledge in 2022.
This is a global target. The UN Environment Programme’s
Global Methane Assessment has stated, “The mitigation potential
in different sectors varies between countries and regions.
The largest potential in Europe and India is in the waste sector;
in China from coal production followed by livestock; in Africa
from livestock followed by oil and gas; in the Asia-Pacific region,
excluding China and India, it is coal and waste; in the Middle East,
North America and Russia/Former Soviet Union it is from oil andgas; and in Latin America it is from the livestock subsector.”4

Woodside’s current methane emissions performance
Minimising methane emissions is a priority for Woodside
because if leaked at significant levels, methane could createa safety risk on our assets and/or result in a loss of production.
Because of the emphasis we have had on containing methane
effectively, our methane emissions are around 0.1% of our
production by volume. This is already well below the Oil and
Gas Climate Initiative (OGCI) 2025 methane intensity target of
below 0.2%, and we continue to strive for further reductions.5
The quantification of methane is challenging and inherently
includes a degree of uncertainty and underlying assumptions.
Woodside’s inventories are reported in accordance with therelevant reporting regulations in the jurisdiction where theemissions occur such as Australia’s National Greenhouse andEnergy Reporting (NGER) and the USA’s Greenhouse Gas
Reporting Program (GHGRP).

Methane emissions reduction plan
Methane emissions are a part of Woodside’s total greenhousegas emissions, so reductions in methane emissions contributeto our net equity Scope 1 and 2 greenhouse gas emissions
reduction targets. To help this, a methane emissions reduction
plan has been developed and is summarised on page 32.
It is a subset of our decarbonisation strategy.
In September 2022, Woodside became the first Australasiancompany to join the OGCI’s Aiming for Zero Methane Emissions
Initiative.6 The signatories to the Initiative state that they believe
virtually all methane emissions from the industry can and should
be avoided.
In 2022, Woodside’s methane emissions reduction plan won
a Game Changer Award from the Energy Club of Western
Australia. This is awarded for an outstanding contribution to
innovative thinking, policy or procedural advancement, energy
industry leadership, development in technological innovation,engineering design, or outstanding idea generation which has
resulted in significant advancement of the industry’s knowledge
and capability within the last two years.

1
2
3
4

IEA 2021. “Curtailing methane emissions from fossil fuel operations - Pathways to a 75% cut by 2030.” Page 7. All rights reserved.
Global Methane Initiative factsheet “Global Methane Emissions and Mitigation Opportunities” at www.globalmethane.org/documents/gmi-mitigation-factsheet.pdf. Page 1.
Global Methane Pledge: https://www.globalmethanepledge.org/.
United Nations Environment Programme and Climate and Clean Air Coalition (2021). “Global Methane Assessment: Benefits and Costs of Mitigating Methane Emissions”. Nairobi: United Nations
Environment Programme. Page 10.
5 https://www.ogci.com/action-and-engagement/reducing-methane-emissions/#methane-target.
6 https://aimingforzero.ogci.com/.

Woodside Energy Group Ltd|

31

Summary of methane emissions reduction plan
Woodside’s methane emissions reduction plan has four pillars.
Report emissions data
to stakeholders

Woodside reports its absolute methane emissions on an operated and equity basis in accordancewith the regulatory framework of the country of origin. We also calculate and report methane
intensity on an operated and equity basis.

Develop a comprehensive,high integrity methane
emissions dataset

Inventory measurement helps us to identify the highest priority methane emissions reduction
opportunities. In 2022, we commenced development of source level, bottom-up methane
inventories for our assets utilising internationally recognised methods. The accuracy andcompleteness of these inventories is informed via top-down or whole of facility measurement
technologies as well as direct measurement campaigns on our material sources. We aim to have acomprehensive data set, along with action plans to reduce methane emissions, finalised in 2023.

Lead, advocate andcollaborate

We believe that by leading, advocating and collaborating with our external stakeholders,regulators and joint venture participants there is scope to further reduce methane emissions
by sharing opportunities to decarbonise key emission sources. In 2021, Woodside commenced
non-operated joint venture (NOJV) workshops to share methane-related learnings and enhance
mitigation in Western Australia’s natural gas value chain. In 2022, these engagements were
continued to support the sharing of methane-related knowledge. We aim to extend the reach ofthese technical workshops in 2023 through our membership of the Methane Guiding Principles.

Striving for “near zero”
methane emissions

Once identified, methane emissions abatement opportunities can be integrated into our asset
decarbonisation plans, described on page 29. Given the short-term nature of methane as agreenhouse gas compared to CO2, Woodside assesses methane abatement opportunities using
a 20-year global warming potential rather than the IPCC standard 100 year potential. This meansthat we apply a multiple of 84 to our long-term cost of carbon US$80 t/CO2-e (real terms 2022),
i.e. an effective price of $6,720 t/CH4 (real terms 2022).
Opportunities to identify, assess and potentially abate methane emissions from our facilities
include:• Conducting methane slip measurement studies of sources at our LNG facilities• Using optical gas imaging and drone surveys to identify fugitive emissions that can beaddressed• Including fixed methane detection cameras in new facility design• Implementing seal oil vent vapor recovery on wet seals at LNG trains• Retrofitting dry seals on compressors and minimising use of high emitting compressors• Minimising flaring, and monitoring flare destruction efficiency.

Woodside is a signatory to the Methane Guiding Principles and the OGCI’s Aiming for Zero Methane Emissions Initiative.
Another initiative is the Oil and Gas Methane Partnership (OGMP 2.0), a measurement-based reporting framework, which
Woodside has not joined. Instead, we have focussed on developing our methane emissions reduction plan which includes
measurement and reporting but also prioritises emissions reduction and advocacy. Membership of OGMP 2.0 will be
reviewed by Woodside as part of existing annual processes.

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Climate Report 2022

CASE STUDY:METHANE SURVEYS
In 2022, Woodside undertook several different types ofmethane survey. These included a drone-based methane
measurement quantification campaign, targeted equipment
surveys, and flare performance monitoring via what we
believe to be the first trial of the Providence Photonics video
imaging spectro-radiometry (VISR) in Australia.
The drone-based facility measurements were conductedat several of Woodside’s offshore and onshore facilities inAustralia and the Gulf of Mexico. These were at FPSOs (Okha,
Ngujima Yin, and Pyrenees), offshore platforms (Goodwyn,
North Rankin, Shenzi, and Ruby/Angostura), and theMacedon onshore gas processing facility. They complement
prior methane surveys undertaken during 2020 at Pluto LNG
and the Karratha Gas Plant.

By partnering with local third-party service providers,
Woodside’s intent was to support ongoing methane
emissions measurement campaigns within Western
Australia, across the natural gas supply chain and for use byother industries.
The VISR survey focused on flare performance at Pluto LNG.
The survey also presented the opportunity to trial the Mantis
Lite™, a flare monitoring device which uses video imaging
spectro-radiometry (a more accessible pre-production unit
based on the well-established Mantis™). This trial could
lead to the use of this technology more broadly acrossWoodside’s portfolio.

Use of drone-based technology is intended to enhancelocation and quantification of key methane emission
sources, enabling the prioritisation of mitigation projects
in our asset decarbonisation plans. Prior to the surveys,
validation trials were undertaken in Perth, including trainingof local personnel.

Woodside Energy Group Ltd|

33

S ection 3 . 6

Offsets
Avoiding and reducing our emissions are our first priorities for meeting our net
equity emissions reduction targets. However, offsetting emissions allows Woodside
more flexibility to meet these targets, while asset and technology decarbonisationplans are matured and implemented. In the longer term, where emissions prove tobe hard-to-abate, any such residual emissions would also need to be offset using
carbon credits in order to achieve our net zero aspiration.
Offsetting emissions is achieved by retiring (or surrendering)carbon credits. A carbon credit is a tradable financial instrumentthat is issued by a carbon-crediting program and represents
a greenhouse gas emission reduction to, or removal from,the atmosphere. Where a company retires a carbon credit (inorder to permanently remove the carbon credit from circulation)
it can use the retirement to offset an emission from its own
operations.
The key characteristics underpinning credible carbon credits arethat they represent certified greenhouse gas abatement fromprojects that are additional, permanent, measurable, transparent,
independently audited and registered in a publicly transparent
register. An activity is ‘additional’ if it would not have occurred in
the absence of the incentive created by carbon credit revenues.1
A wide range of activities can generate carbon credits.
These activities can be categorised into avoidance/reduction
or removal activities. Some examples are provided in figure 16.
Today, emissions avoidance and reduction activities play a role inmaintaining carbon sinks2 and accelerating emissions reductions,which both contribute to preserving the world’s carbon budget.
However, in the longer term, the ability for these activities
to generate carbon credits could decrease for example
if activities become commercially viable or mandated byregulation, and therefore unable to demonstrate additionality.
As the world progresses towards a global balance between
emissions by sources and removals by sinks (global net zero),carbon dioxide removals (CDR), which take CO2 out of theatmosphere and store it, are expected to be increasingly
important. Examples of potential CDR activities include
reforestation and direct air capture projects. CDR activities may
be able to continue to meet the requirements to generate carbon
credits in the long-term.

Today, many removal-type carbon credits are nature-based.
Other CDR technologies such as direct air capture are receiving
significant technology investment and policy support, but therate of take up remains uncertain and estimates of future costs
vary widely.

FIGURE 16: TYPES OF ABATEMENT ACTIVITIES THATCAN GENERATE CARBON CREDITS
Avoidance /Reduction

Renewable energy projects
Landfill gas capture
Industrial efficiency
Prevention of deforestation
Carbon capture and storage

RemovalReforestation
Direct air capture and storage (DACS)
Bioenergy with carbon capture and storage(BECCS)Key challenge
Woodside recognises that, notwithstanding the
integrity of the carbon credits that it originates andacquires, some stakeholders question the validity
of offsetting emissions as part of decarbonisation
strategies. Woodside’s view is that the use of offsets
is inherently consistent with balancing sources andsinks of emissions (i.e. the “net” in “net zero”) andthat its participation in carbon markets can enhanceinvestment flows and integrity.

1 Integrity Council for the Voluntary Carbon Market (2022). “Core carbon principles, assessment framework and assessment procedure. Draft for public consultation.” Part 2, page 3.
2 Carbon sinks are forests and other ecosystems that absorb carbon, thereby removing it from the atmosphere and offsetting CO2 emissions. (Definition taken from European Commission “Climatechange: glossary of common terms and acronyms” https://www.eea.europa.eu/help/glossary/eea-glossary/carbon-sink).

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Climate Report 2022

Woodside’s carbon business
Woodside established a carbon business in 2018 to develop
a carbon credits portfolio.
We retire carbon credits from this portfolio annually to meet our
net equity Scope 1 and 2 greenhouse gas emissions reduction
targets and regulatory obligations. We acquire these carbon
credits through market purchases and through the developmentof our own carbon origination projects.
We currently use a mix of avoidance, reduction and removal type
carbon credits, as illustrated in the details of our retirements for2022 on page 41.
Woodside’s current plan is to shift our portfolio balance towards
removal type offsets, for example through the carbon origination
described below. We are also investing in new technology that
could capture and durably store greenhouse gases or convert
them into useful products (see page 47). However, the rate oftechnology maturation is challenging to predict, and not all suchactivities may generate carbon credits.

Carbon origination
Developing our own projects strengthens our internal capability
and improves our ability to assess the integrity of carbon credits
we purchase. It also helps us to directly manage the cost andvolume of a portion of the carbon credits portfolio that we hold.
An example of our carbon origination projects is Woodside’s
Native Reforestation Project, which is expected to sequester
approximately 1,100 kt CO2-e over 25 years. The Australian
Carbon Credit Units (ACCUs) generated from this project could
then be used to offset Woodside’s Scope 1 and 2 greenhousegas emissions.

Participation in carbon markets
Acquiring carbon credits allows Woodside to supplement its
origination projects with additional credits. Origination projects
take time to generate credits, whereas acquisition of additional
credits in carbon markets allows access to supply that is available
now. Acquiring credits via carbon markets provides investment
to help them develop and scale, and Woodside’s participation
can help to improve the robustness of methodologies andaccounting techniques.
We recognise that, in the absence of consistent global regulation,
there is the potential for carbon credits with varying integrity
to be available on the market. If Woodside was to purchase andretire carbon credits that were perceived to lack integrity,
this would have the potential to undermine the role of offsets
in our decarbonisation strategy.

and anti-bribery and corruption. As part of the due diligenceprocess, the impact on Woodside’s overall portfolio is assessed,
including a review of portfolio diversification across vintage,
methodology and geography.
Woodside has participated in both the Australian compliancemarket and the voluntary market for carbon credits. Woodsideholds carbon credits from the following carbon credit programs:• Emissions Reduction Fund, which is established and governedby the Clean Energy Regulator (CER). The CER issues ACCUs
and administers their trade on the Australian National Registryof Emissions Units.
• Verified Carbon Standard (VCS), under which Verified Carbon
Units (VCUs) are issued, is established and governed by thenon-government organisation Verra.
• Gold Standard, under which Verified Emissions Reductions(VERs) are issued, is established and governed by thenon-government organisation Gold Standard.
Woodside also subscribes to emerging independent carbon
credit rating platforms that assess carbon credit quality.
We monitor the evolution of integrity assessment frameworks
and standards developed by independent organisations so that
we can continuously improve our due diligence process.

CASE STUDY:
NATIVE REFORESTATION PROJECTIn 2020, Woodside commenced the first phase of the
Native Reforestation Project, which aims to create
biodiverse carbon plantings in Western Australia,
planting approximately 5,200 hectares of mixed
native species to date.
In 2022, we planted more than one million native
seedlings at Woodside owned properties near Moora,
approximately 200 km north of Perth in Western
Australia. Aiming to revegetate and restore the land,
we partnered with Perth-based Nativ Carbon to ensure
a diverse range of species were planted. Through thereforestation of the property, we anticipate that the
fully grown trees will allow for increased habitat
connectivity through restored landscape linkages.
The project also provided employment opportunities
for the local community.

To assess the integrity of carbon credits acquired throughcarbon market purchases, Woodside has established a due
diligence process. This process assesses both greenhousegas abatement integrity and broader environment, social andgovernance (ESG) integrity. The greenhouse gas abatement
integrity assessment includes factors such as additionality andpermanence. The ESG integrity assessment considers factors
such as human rights, social impact, environmental impact,

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S ection 3 . 7

Scope 3 emissions
Scope 3 emissions are the greenhouse gas emissions that occur
in a company’s value chain, other than those included in Scope
1 emissions (direct emissions from owned or controlled sources)
and Scope 2 emissions (indirect emissions from the generationof purchased energy consumed by the reporting company).
For example, Scope 3 emissions include the emissions thatarise when the products we sell are transported to customers
and consumed, or when the goods and services that we buy
get created. Importantly, Woodside’s Scope 3 greenhouse gas
emissions are also a different entity’s Scope 1 emissions.
Figure 17, modified from the Greenhouse Gas Protocol’s“Corporate Value Chain (Scope 3) Accounting and ReportingStandard”, provides an overview of the three Greenhouse Gas
Protocol scopes and selected categories of Scope 3 emissions.1
For Woodside, the largest source of Scope 3 emissions is fromthe use of oil and gas by our customers or “use of sold product”.
Therefore, the key focus of our Scope 3 emissions plan is on
investing in the development of new energy products, such ashydrogen and ammonia, and lower carbon services such as CCS,
that can significantly reduce these end-use emissions.

1

Challenges to robust Scope 3 emissions reporting include
inconsistent reporting regimes across the global value chainof our products and services, boundaries that ignore the realworld emissions reduction impact of offsets and coal-to-gas
switching, and average end use emissions factors that fail to
identify differences in end use emissions between customers.
This inhibits the ability to set targets, focus our actions andreport our progress. Our Scope 3 emissions reporting is currently
based on estimates rather than actual measurements.
Woodside’s Scope 3 emissions plan includes contributing
to finding solutions to address these issues. Over time, we
believe reporting regimes may evolve to better support
global decarbonisation across value chains and the successful
implementation of global carbon markets, but this will require
collaboration across many sectors and countries.

World Resources Institute and World Business Council for Sustainable Development (2011). “Corporate Value Chain (Scope 3) Accounting and Reporting Standard”. Page 5.

—
Scope 3 emissions for Woodside include
the purchase of goods and services e.g.
offshore support vessels.

36

Other sources of Scope 3 emissions for Woodside include
waste, business travel, the purchase of goods and services,and the shipping of our products. Although these are a smaller
proportion of emissions than those arising from the use of
our product, these emissions may be easier to measure andinfluence. Part of our Scope 3 emissions plan is therefore to seek
ways to support our customers and suppliers in their emissions
reduction journey.

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Climate Report 2022

FIGURE 17: WOODSIDE SCOPE 1, 2 AND 3 EMISSIONS1,2

Scope 1
Scope 2
Use ofimported
power

Scope 3DOWNSTREAM(selected)

BusinesstravelEmployeecommuting

Scope 3
UPSTREAM(selected)

Upstream

Purchased
goods &
services

Directfrom ouroperations
Shipping
Use of soldproducts

Waste generated
from operations

Woodside’s value chain

Downstream

Estimated Woodside Scope 3 emissions, 2022

87.6% Use of sold product - Woodside production
7.9% Use of sold product - Traded hydrocarbons
1.7% Purchased Goods and Services - Traded hydrocarbons
0.4% Selected other upstream3
2.4% Downstream transportation and distribution4

1 Data supporting these categories is provided in the climate-related data table on page 58.
2 From 2021, Woodside has reported estimated Scope 3 emissions associated with our traded volumes of LNG as well as our own production and in 2022 expanded this reporting toinclude traded oil and pipeline gas noting that this will result in some double counting of Scope 3 emissions with the original producer of these traded hydrocarbons.
3 Selected upstream emissions from GHG Protocol Categories 1 (purchased goods and services, not including production of purchased hydrocarbon); 5 (waste generated in operations);
6 (business travel); and 7 (employee commuting). Includes equity emissions associated with Woodside employees and Woodside operated facilities only.
4 Includes emissions associated with the downstream transport (GHG Protocol Category 9) of Woodside’s equity share of hydrocarbon sales. No adjustment has been made for
combustion of sold product during transport (e.g. LNG combusted by LNG ships, pipeline gas used in transmission compressor stations) and therefore could be double counted.

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37

Scope 3 emissions plan and 2022 activities
Woodside announced a Scope 3 emissions plan in 2021, which
has three key elements:

In addition to its main offices in Australia and the UnitedStates, Woodside maintains permanent offices in key
locations including Japan, Korea, China, and Singapore.

InvestNew energy products and lower carbon services
Woodside expects increasing demand for new energy products
such as hydrogen and ammonia, and lower carbon services such as
CCUS. These can reduce the emissions arising when our customers
consume energy compared to unabated use of fossil fuels.
Woodside is investing to add these new products and services
to our portfolio, seeking to match the pace, scale and needs ofour customers as they determine their own decarbonisation
pathways.
In December 2021, Woodside announced a US$5 billion
investment target in new energy products and lower carbon
services by 2030.1 The US$5 billion is intended for investmentsthat help our customers decarbonise by using these products
and services. It is not used to fund reductions of Woodside’s net
equity Scope 1 and 2 emissions which are managed separately
through asset decarbonisation plans.
At the end of 2022, Woodside had spent more than $100 million
towards its $5 billion target. This spend includes electrolysers
and liquefaction equipment for the H2OK hydrogen project
proposed in Oklahoma, the Heliogen pilot project, as well as
progressing an investment in String Bio, a company developing
carbon to products technology.

This enables Woodside to routinely engage withcustomers and other important stakeholders in these
key locations, including to understand their needs andpriorities through the energy transition.

PromoteGlobal measurement and reporting
Woodside is actively participating in industry collaboration
initiatives to mature, harmonise and advocate for accurate andtransparent measurement and reporting.
In 2022, examples include participating in• Ipieca’s Scope 3 Taskforce2• The Climate Leaders Coalition Scope 3 roadmap3• Working with expert external parties to assess reporting
standards for adoption in Woodside’s business in areas suchas maritime decarbonisation.

QANTAS’ SUSTAINABLE AVIATIONFUEL COALITION
Emissions from business air travel are a category of
Scope 3 greenhouse gas emissions. In November 2022,
Woodside became a member of Qantas’ Sustainable
Aviation Fuels (SAF) Coalition along with Australia
Post, Boston Consulting Group, KPMG Australia andMacquarie Group. The coalition supports the purchaseby Qantas of SAF, reducing around 900 tCO2-e perannum for each member of the coalition. SAF procured
by Qantas will be made from International Sustainability
and Carbon Certification certified feedstock and will
be audited on a limited assurance basis to confirm no
double counting. The additional benefits include:

Further updates on Woodside’s progress are included on page
46-47.

SupportCustomer and supplier emissions reduction
Woodside can support our customers and suppliers
by identifying opportunities to collaborate on theirdecarbonisation pathways.
Embedding climate expectations and emissions reporting is now
a standard practice for new contracts awarded by Woodside thathave a material Scope 3 emissions profile. We intend to track andreport where our suppliers have identified emissions reductions
achieved while providing us with goods and services.

• Emissions reporting for all Woodside employees’
business travel with Qantas

In 2022 activities included:• Promotion of SAF production both globally andwithin Australia• Joined the Getting to Zero maritime coalition• Joined the Qantas’ Sustainable Aviation Fuels (SAF) coalition• Opportunities to further develop the SAF Coalition
with Qantas to potentially include other suppliers andpartnerships Woodside are involved in.

• Signed binding agreement for more fuel-efficient LNG carriers• Announced a feasibility study for ammonia supply chain to
Japan.
In addition, Woodside and the Japan Bank for International
Cooperation (JBIC) signed a memorandum of understanding(MOU) on 1 November 2022, which is aimed at securing astable supply of energy for Japan and to assist in achieving its
decarbonisation goals.
1

Individual investment decisions are subject to Woodside’s investment targets. Not guidance.
Potentially includes both organic and inorganic investment.
2 https://www.ipieca.org/our-work/climate/.
3 https://www.climateleaders.org.au/publications/scope-3-roadmap/.

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Climate Report 2022

Scope 3 emissions targets
Woodside’s Scope 3 target is to invest $5 billion in new energy products and lower carbon services by 2030.1 We recognise that somestakeholders, including some investors, have requested that Woodside also set Scope 3 emissions reduction targets. The Board andthe Executive Leadership Team continue to carefully consider options for such targets, the viability of which may change over time
as reporting standards improve.
Some options for Scope 3 targets are described below. In addition to the challenges to robust Scope 3 emissions reporting describedon page 36, the rationale for why Woodside has not chosen to adopt them at this time is are also given:
TargetRationale for not adopting at this time

Absolute emissions
reduction targets“Use of sold product” is the largest category of Scope 3 emissions for Woodside. These emissions
therefore correlate to the volume and mix of products we sell, unless the subsequent use of those
products is abated. Absolute targets to reduce this category of Scope 3 emissions can be achieved
either by:• Selling less (or different) products• Relying on customers to abate the emissions associated with their use of our product after the
point of sale
• Divesting producing assets to others, which does not directly reduce global greenhouse gas
emissions.
As articulated on pages 16-17 of this report, Woodside intends to supply the energy products that
our customers need to secure their energy supplies as they reduce their emissions, and an absolute
reduction target does not reflect this. This is because customers may continue to choose a wide
range of oil, gas and new energy products during their decarbonisation transition, and an absolutetarget would constrain Woodside’s ability to supply these products. Further information on oil andgas in the energy transition and the net zero goals and decarbonisation plans in our key LNG markets
is provided on pages 10-15.
Further, while the use of oil and gas products may be subject to post-sales abatement by thecustomer, there are currently no adequate systems to track and measure this, which we consider
a prerequisite to setting a target.

Intensity-based
emissions reduction
targets

An intensity-based emissions reduction target would enable Woodside to maintain or expand its
supply of energy products to meet customer demand, while diversifying its portfolio to include newenergy products and lower carbon services.
While this is consistent with Woodside’s strategy, the pace of customer take up of the supply of newenergy products and lower carbon services remains difficult to predict, and so is the ability to predict
and record post-sales abatement.
Therefore, Woodside reports its actual emissions intensity (see data table on page 58), but has not
set a forward-looking target.

Supply chain emissions
targets

Woodside has considered whether a target could be set for other sources of Scope 3 emissions,such as business travel, supply of goods and services, and waste.
Data on the baseline emissions in these categories is estimated rather than measured. This inhibits
the ability to set a percentage target, because the baseline is uncertain and it may change asknowledge improves.
Instead, we work with our suppliers to track additional actions identified by them to reduce emissions.
The development of this tracking and reporting capability may in future facilitate the consideration of agoal for this category of emissions.

1

Individual investment decisions are subject to Woodside’s investment targets. Not guidance. Potentially includes both organic and inorganic investment.

Woodside Energy Group Ltd|

39

S ection 4 : M E T R I C S A N D T A R G E T S

S ection 4 . 1

Targets: 2022 progress
Woodside’s targets to reduce net equity Scope 1 and 2
greenhouse gas emissions are:
• 15% by 20251• 30% by 20302
relative to a starting base representative of gross annual
average equity Scope 1 and 2 greenhouse gas emissions
over 2016-2020. Woodside has also announced an
aspiration of net zero equity Scope 1 and 2 greenhousegas emissions by 2050 or sooner.3
Following the merger, this starting base was re-establishedas 6.32 Mt CO2-e representing the 2016-2020 gross annual
average for the merged entity.4
For 2022 performance only, in which the merger was
effective for seven out of 12 months, the effective startingbase has been adjusted to 5.19 Mt CO2-e.

Woodside’s net equity Scope 1 and 2 greenhouse gas
emissions for 2022, and the amount of carbon credits
retired as offsets are shown below and in the data tableon page 58. Because the 2022 data includes seven monthsof the merged entity, it is not directly comparable to either
the 2021 data, or to the starting base for the merged
entity, for which the first full year reporting period will becalendar year 2023. The level of carbon credits retired in
respect of 2022 emissions has been selected to deliver an
11% reduction from an adjusted starting base reflecting fivemonths of pre merger starting base and seven months ofpost merger starting base.

FIGURE 18: SCOPE 1 AND 2 GREENHOUSE GASEMISSIONS
7.0

Net equity Scope 1 and 2 greenhousegas emissions performance in 2022

5.0

Mt CO2-e

Woodside’s net equity Scope 1 and 2 greenhouse gas
emissions totalled 4,615 kt CO2-e in 2022, which was 11%
below the starting base. To achieve this, 754 kt CO2-e ofcarbon credits were retired, as set out in figure 19. Grossequity emissions (prior to the retirement of carbon credits
as offsets) were 5,369 kt CO2-e.

Merged entity starting base
6.0

Heritage Woodside
starting base

4.0
3.0
2.0
1.0

In 2022, 67% of Woodside’s equity Scope 1 greenhouse gas
emissions were from fuel combustion to power our assets,
20% came from venting of which the majority is associatedwith removal of reservoir CO2 as part of the LNG process,and 13% from flaring.

0.0

2021

2022

Net equity emissions
Emissions that have been offset
Adjustment to starting base to represent additionof heritage BHP assets

Assets operated by Woodside accounted for 79% of
these emissions, and the remainder came from assets inwhich Woodside has a share of ownership but not direct
operational control.

1 This means net equity emissions for the 12 month period ending 31 December 2025 are targeted to be 15% lower than the starting base.
2 This means net equity emissions for the 12 month period ending 31 December 2030 are targeted to be 30% lower than the starting base.
3 Target is for net equity Scope 1 and 2 greenhouse gas emissions, relative to a starting base representative of the gross annual average equity Scope 1 and 2 greenhouse gas emissions
over 2016-2020 and may be adjusted (up or down) for potential equity changes in producing or sanctioned assets with an FID prior to 2021.
4 The starting base has been calculated as 6.32 million tonnes CO2-e. This is intended to be representative of the gross average annual equity emissions over the period 2016-2020 for
both Woodside and also the assets acquired through the merger with BHP’s petroleum business.

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Climate Report 2022

FIGURE 19: SOURCES OF CARBON CREDITS RETIRED IN RESPECT OF 2022 EMISSIONSIn respect of 2022 net equity Scope 1 and 2 greenhouse gas emissions, Woodside has retired international carbon credits accreditedby two independent non-government organisations, Verra and Gold Standard. Verra and Gold Standard have been reviewed by
the Australian Government and are included as eligible carbon credits under the Climate Active Carbon Neutral Standard for
Organisations.1 The carbon credits retired are described in the table below.

1

Project name

Project ID

Project developer

Project type

MethodCountry

Vintage

Antai Group Waste Gas
Recovery for Power
Generation ProjectGold
Standard GS
605

South Pole Carbon
Asset Management
LimitedEnergy Efficiency— Industrial

ACM0012: Waste energy recovery

China

2017

Genneia Wind Projects
in Argentina

Verra VCS
1987

Genneia S.A.

Energy industries(renewable/nonrenewable sources)

ACM0002: Consolidated
methodology for grid-connected
electricity generation fromrenewable sources

Argentina

2018

Hyundai Steel Waste
Energy Cogeneration
Project

Verra VCS
786

Hyundai GreenPower and CERPD

Energy Efficiency— Industrial

ACM0012: Waste energy recovery

Republicof Korea

2017

Katingan Peatland
Restoration andConservation Project

Verra VCS
1477

PT. Rimba Makmur
Utama (PT. RMU)

Agriculture Forestry
and Other Land Use

VM0007: REDD Methodology
ModulesIndonesia

2018

Commonwealth of Australia 2020. “Climate Active Carbon Neutral Standard for Organisations, Commonwealth of Australia 2020.”

Woodside Energy Group Ltd|

41

S ection 4 . 2

Metrics
Additional metrics to describe Woodside’s 2022 performance in the context of our industry are included below. It has not been feasible
to accurately present comparable historical data due to the merger with BHP’s petroleum business.

FIGURE 20: SCOPE 1 AND 2 GROSS INTENSITY1

kg CO2-e / boe production

40

35

Scope 1 and 2 gross emissions intensity
This is a measure of the efficiency of our production, before the applicationof offsets. It is one way to demonstrate that Woodside is appropriately
prioritising avoiding and reducing emissions at our facilities relative to theuse of carbon credits as offsets, consistent with our strategy. Woodsidehas a lower (better) gross emissions intensity than the global average of acomparable portfolio of LNG, conventional shelf and deepwater assets(as calculated by Wood Mackenzie1) demonstrating the impact of actions
taken to avoid and reduce emissions from our operations.

30

25

20
Woodside2022

Global average
2016-2025 estimate

FIGURE 21: METHANE EMISSIONS INTENSITY2,3

Sm3 / Sm3 marketed gas (%)

0.20

OGCI 2025 target
of well below 0.2%

0.15

Methane intensity
Woodside currently has a lower (better) equity methane emissions intensity
than industry (OGCI) targets, but nevertheless has an action plan to further
improve and strive for near zero methane emissions.
Woodside’s methane emissions performance and methane emissions
reduction plan is described on pages 31-33. Methane emissions contributeto Woodside’s Scope 1 emissions, but receive specific focus because of theirnear-term importance to achieving global climate goals.

0.10

0.05

0.00

Woodside2022

1

OGCI industry
average 2021

Woodside analysis, based on Woodside Scope 1 and 2 emissions data for 2022 relative to a comparable portfolio of LNG, conventional shelf and deepwater assets, as estimated by Wood Mackenzie.
https://www.woodmac.com/news/opinion/portfolio-composition-is-key-to-emissions-intensity/.
2 Woodside methane emissions data, relative to OGCI average and targets. https://www.ogci.com/action-and-engagement/reducing-methane-emissions/#methane-target.
3 Greenhouse gas emissions, energy values and global warming potentials are estimated in accordance with the relevant reporting regulations in the jurisdiction where the emissions occur (e.g.
Australian National Greenhouse and Energy Reporting (NGER), US EPA Greenhouse Gas Reporting Program (GHGRP)). Australian regulatory reporting principles have been used for emissions injurisdictions where regulations do not yet exist.

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Climate Report 2022

FIGURE 22: SCOPE 1, 2, 3 LIFE CYCLE INTENSITY1
80

g CO2-e / MJ

75

Portfolio life cycle intensity of production
Portfolio life cycle intensity of production is a measure of the Scope 1, 2
and 3 greenhouse gas emissions, per unit (megajoule) of energy that we
produce and sell. It therefore provides a measure of the carbon intensityfrom both the production and the use of our portfolio of products.
Woodside’s intensity is currently lower than the 2021 oil and gas sector
mean as calculated by the Transition Pathway Initiative because ourportfolio is weighted towards natural gas, which has a lower life cycle
intensity than oil.

70
65
60
55
50
Woodside2022

Oil and Gas
sector mean 2021

Additional data on 2022 performance is also provided in the Climate-related data on page 58 of this report and in the Sustainable
Development Report, which also contains information relating to water, energy and waste management. For metrics associated withexecutive remuneration, refer to the Governance section. For considerations utilised in investment decision making, refer to theCapital Allocation Framework section on pages 26-27.

1

Woodside analysis, based on Woodside Scope 1, 2 and 3 emissions data for 2022 relative to the Transition Pathway Initiative oil and gas sector mean. https://www.transitionpathwayinitiative.org/
companies/woodside-petroleum, assessment date 01 August 2022.

Woodside Energy Group Ltd|

43

Strategy in action: delivering on emissions reductions in 2022
Avoiding emissions in design:
Pluto expansion project

Scarborough offshore design

Decarbonisation activities for the Pluto Expansion project,encompassing both the new Train (T2) and modification to theexisting Train (T1), focussed on improving emission intensity andminimising flaring during both routine operations and startup of
the new Train. Key work streams included the below.

A nitrogen flare purge has been included in the design of the
Scarborough floating production unit (FPU). For process safety
requirements, flare systems require a continuous purge. This canbe achieved with the use of a fuel gas purge. The ScarboroughFPU has developed a modified design for the high pressure flareusing primarily nitrogen instead. This reduces estimated flaring
emissions by approximately 800 tCO2-e/year.1

Flashing Liquid Expander (FLE): Following study work through2022, installation of tie-ins to support future installation ofan FLE is being considered for incorporation into the baseproject scope. FLE operation recovers energy by expanding
the refrigerant stream to produce electricity which can be usedin the refrigerant compressors, reducing fuel gas usage andimproving emissions intensity.
Integrated System Flaring: A detailed review of the integrated
Pluto T1/T2 Boil Off Gas (BOG) system was held in 2022 todevelop an operating philosophy that minimises system flaring
during LNG loading. Opportunities for optimisation of integrated
Scarborough commissioning and start-up are also planned
through 2023.
Study work on implementation of Advanced Process Control
across both T2 and T1 will be completed in 2023 to enable
early implementation after start-up, maximising efficiency andreliability.

Gas can be used to prevent damage between the inner and outer
sheath of the flexible riser which connects the FPU to the subsea
production and gathering system. This riser annulus gas, which
is mainly diffused methane, is normally monitored and vented
directly to the atmosphere. However, in the Scarborough design
this gas is routed to the flare system for combustion. This saves
approximately 600 tCO2-e/year in emissions.1
The FPU design has been optimised to reduce fuel gas usage
by compressors. The reduction in fuel gas usage from this work
results in an estimated annual saving of approximately 3,200
tCO2-e/year.1
After completion, wells are flowed to a mobile offshore drilling
unit (MODU) for a period of approximately 24 hours during
which resulting gas is flared. The activity is performed to reduce
the amount of solids and drilling fluids in the production systemonce it is connected. Through well completion and drilling fluid
selection, along with additional data analysis, the activity has
been removed from the Scarborough well commissioning scope.
Not flaring reservoir gas and reducing fuel uses on the MODU
has reduced emissions by approximately 17,000 tCO2-e, notingthat these are Scope 3 emissions for Woodside and Scope 1 forthe drilling contractor.1

Trion offshore design
During project definition, engineers at the Trion project haveadopted several measures which would reduce the potential
emissions from the project, should it proceed to a final
investment decision. These include tank vapour recovery, useof nitrogen as the primary flare purge, waste heat recovery,
selection of electric drives for major turbines and minimisationof spinning reserve. These projects are focused on reducing
emissions and improving emissions intensity.

1

44

The estimated GHG savings quoted in each example on pages 44 and 45 are estimated using engineering judgment by appropriately skilled and experienced Woodside engineers. Emissions quoted
are total project share, not equity share. Not all savings will be recurrent on an annual basis. For illustration 1,000 tC02-e is approximately 0.02% of Woodside’s 2022 gross equity Scope 1 and 2
greenhouse gas emissions.

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Climate Report 2022

Reducing emissions in operations:
Karratha Gas Plant: LNG Train 1 compressor seal vent
recovery
The four main refrigerant compressors on LNG train 1 have been
retrofitted with a seal vent recovery system. This recovers, treats
and re-directs hydrocarbons back into the compressor thus
reducing atmospheric emissions from the plant. The project isestimated to reduce emissions by approximately 8,000 tCO2-e.1

Karratha Gas Plant: energy efficiency improvements
through advanced process control
New advanced process control applications have been deployed
in both the power generation and liquefaction plants to optimise
energy consumption. The application of advanced processcontrol into a power generation control system is novel inapplication and approach. It actively shifts power load between
generators of different turbine types and favours the mostefficient machines, reducing overall emissions from gas turbines.
For the liquefaction plants, the inclusion of energy efficiency
calculations in the advanced process control reduces overall
emissions from gas turbines. Emissions reductions are estimatedto range between 55,000-130,000 tCO2-e.1

Macedon: metering station emissions reduction project
In June 2022, 61kW of solar photovoltaic (PV) panels and170kWh of battery energy storage were installed at the Macedon
Metering Station. The project objective is to displace therequirement to operate a 50 kVA gas engine alternator andreduce up to 133 tCO2-e/year.1“The journey towards a more sustainable future
begins with education and understanding.
The Woodside Energy Climate Awareness Network(WECAN) held a series of events during 2022 which
helped us gain a deeper understanding of thechallenges and opportunities ahead.”- Sam (WECAN).
“Having opportunities to continue to strengthen
our relationships with our suppliers while
collaborating on opportunities to support them toaddress our Scope 3 greenhouse gas emissions has
been rewarding.”– Logan (Supply Manager)“It’s satisfying to be involved with delivering a project
that’s not only good for the business in terms of costand safety, but also reduces our emissions footprint.”– Tom (Completions Engineering)“I feel empowered to take emissions reduction
opportunities into my own hands. Its exciting to see
the passion and innovation driving individuals andteams to make positive change.”– Jacinta (Environmental Engineer)

Karratha Gas Plant, Pluto LNG and North Rankin
Complex: gas turbine inlet air filters
Gas turbine inlet air filters have been upgraded at KGP, Pluto
LNG and the North Rankin Complex, improving production
efficiency and reducing emissions intensity. Emissions reductions
are estimated at approximately 18,700 tCO2-e.1

Pluto LNG: air cooler upgrades
Air cooler upgrades were trialled at Pluto LNG to support
more effective cooling, and reduce the power intensity of
LNG production. The trial resulted in an increased airflow, with
upgrades to be progressively rolled out to other coolers over the
next five years. Following upgrades to the remaining coolers,emissions reductions are estimated at approximately 4,400
tCO2-e.1

FPSOs: optimisation activities
FPSO optimisation activities included reducing flaring and fuelusage where possible. This was achieved through improved
equipment reliability, introduction of tools to support emissions
based operational decision-making, and through optimisation of
spinning reserves for rotating equipment. Emission reductions
are estimated at 12,700 tCO2-e.1

1

The estimated GHG savings quoted in each example on pages 44 and 45 are estimated using engineering judgment by appropriately skilled and experienced Woodside engineers. Emissions quoted
are total project share, not equity share. Not all savings will be recurrent on an annual basis. For illustration 1,000 tC02-e is approximately 0.02% of Woodside’s 2022 gross equity Scope 1 and 2
greenhouse gas emissions.

Woodside Energy Group Ltd|

45

Strategy in action: new energy products and lower carbon services in 2022
During 2022 Woodside progressed the following opportunities as part of a developing portfolio of new energy products andlower carbon services, supported by our $5 billion investment target by 2030. These projects are in development and so do not
yet generate revenue. They remain subject to final investment decision and regulatory approvals.

H2OK

H2TAS

H2OK is a proposed liquid hydrogen project to be locatedin Ardmore, Oklahoma with a maximum design capacity of
90 tonnes per day (tpd) of liquid hydrogen through electrolysis,
initially targeting the heavy transport sector.

Woodside has a proposed renewable ammonia and hydrogenproduction facility in the Bell Bay area of Tasmania. H2TAS
is planned to be a phased development, targeting an initial
capacity of up to 550 tpd of ammonia. Ammonia would be
produced through electrolysis, utilising a combination of windand hydroelectric power. Woodside continues to evaluate thecost and schedule impacts of the renewable power solutions thatwould enable the project to progress.

Woodside completed front-end engineering design activities in
2022 which have matured the facility design, cost and schedule.
In October 2022, Woodside awarded a contract to supply
160MW of alkaline electrolyser equipment and in December 2022
awarded a contract for liquefaction units with a capacityof 60tpd.
Woodside is operator and holds a 100% participating interest.

H2PerthH2Perth is a proposed hydrogen and ammonia production
facility to be located in Perth, Western Australia. Phase 1 of the
project is targeting up to 2,700 tpd of ammonia produced throughboth gas reforming and electrolysis. It is targeting supply to local
industry and international users. Subsequent phases have thepotential to expand to 8,900 tpd by increasing the electrolysis
component. Pre front-end engineering design commenced in
May 2022.
Woodside is operator and holds a 100% participating interest.

Hydrogen Refueller @H2Perth
In 2022, Woodside announced plans for a proposed selfcontained hydrogen production, storage and refuelling station
located adjacent to H2Perth, named the Hydrogen Refueller@H2Perth. Initially, Woodside is targeting production of
0.2 tpd of hydrogen, with the potential to scale up to atargeted 0.8 tpd. Woodside is targeting the supply of hydrogento industrial customers and the public.
Woodside is operator and holds a 100% participating interest.

Southern Green Hydrogen
Woodside has been selected as the preferred partner for theSouthern Green Hydrogen project, a proposed hydrogen andammonia facility to be located in Southland, New Zealand.
The proposal is targeting up to 1,400 tpd of ammonia. Southern
Green Hydrogen is expected to utilise renewable power toproduce hydrogen and ammonia for export and domestic supply.

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Climate Report 2022

Woodside is operator and holds a 100% participating interest.

HeliogenWoodside and Heliogen entered into a project agreementin 2022 to deploy a 5 MW module of Heliogen’s artificial
intelligence-enabled concentrated solar energy technology in
California. In addition, Heliogen and Woodside have signed acollaboration agreement to jointly market Heliogen’s renewableenergy technology in Australia.

Woodside Solar
Woodside is progressing the proposed Woodside Solar project,a facility which would initially generate electricity from a solar
photovoltaic farm approximately 15 km south-west of Karratha
in Western Australia, complemented by a battery energy storage
system. The facility is expected to supply up to 100 MW of solar
energy with potential expansion to a maximum of 500 MW.
It could supply Pluto LNG (potentially reducing Woodside’s
Scope 1 emissions) as well as other customers located near
Karratha that are connected to the North West Interconnected
System (NWIS).
In 2022, Woodside entered a bilateral Indigenous Land Use
Agreement and a modern benefit sharing agreement with the
Ngarluma Aboriginal Corporation, which holds the native title
rights on behalf of the Ngarluma people, for the land where
Woodside Solar is proposed. Woodside also executed options tolease associated land within the Maitland Industrial Estate with
Development WA and has been progressing NWIS connection
and transmission access arrangements.
Woodside is operator and holds a 100% participating interest.

Carbon capture and storage

Carbon to products

Woodside, as a participant in various joint ventures, wasawarded three greenhouse gas assessment permits in 2022.
These permits enable carbon capture and storage assessmentsin the Browse Basin (operated), Northern Carnarvon Basin(operated) and Bonaparte Basin (non-operated).

In 2022, Woodside launched a carbon capture and utilisation(CCU) collaboration with United States based technology
developers ReCarbon and LanzaTech to assess the viabilityof a proposed CCU pilot facility in Perth, Western Australia.
The proposed pilot CCU facility would convert greenhousegases into ethanol.

One of these permits covers the depleted Angel gas field,
which could provide a storage reservoir for a multi-user carbon
capture and storage (CCS) project near Karratha in Western
Australia. This could be ideally located to aggregate emissions
from various existing industrial emissions sources on the
Burrup Peninsula. It could also have the potential to facilitate
the development of new industries, such as the productionof hydrogen and ammonia, by providing a local solution foremissions. The size of the potential CCS facility is subject to thecompletion of additional technical, regulatory and commercial
studies, but could have a processing capacity of up to 5 million
tonnes of carbon dioxide per annum.
Woodside is also a participant in the Gippsland Basin Joint
Venture, which is progressing a feasibility study into thedevelopment of a south-east Australian carbon capture andstorage hub. This aims to utilise existing infrastructure to captureand store CO2 in the depleted Bream reservoir located offshore
Victoria.

Woodside and LanzaTech also entered into a strategic
framework agreement, under which Woodside will collaborate
with LanzaTech to design, construct, own, maintain andoperate pilot facilities utilising LanzaTech’s CCU technologies.
LanzaTech’s skillset is in the fields of synthetic biology,
bioinformatics, artificial intelligence, and machine learning
coupled with engineering.
Woodside also announced an investment of US$9.9 million
in String Bio Private Limited (String Bio), the developer of apatented process for recycling greenhouse gases into products
such as livestock feed. Woodside and String Bio entered astrategic development agreement to explore opportunities forthe potential commercial scale up of String Bio’s technology.

—
H2Perth (Conceptual image only.)

Woodside Energy Group Ltd|

47

S ection 5 : G O V E R N A N C E

S ection 5 . 1

The Board’s oversight of climaterelated risks and opportunities
Climate change is a complex and important issue thatsignificantly influences our strategy. Woodside’s response
is directly overseen by its Board, with the support of its
committees. During 2022, climate change was considered
at each Sustainability Committee meeting (or Board
meeting where the Sustainability Committee did notconcurrently meet).
The Board also engages with shareholders to ensure thatthey understand and have the opportunity to provide
feedback on Woodside’s approach to climate change.
This occurs through a range of formal and informal
channels, such as the annual general meeting (AGM)
and routine engagements with major investors. In 2022,
Woodside conducted 47 investor engagements which
included discussion of climate change.
The chart below describes the relationship between the
Board, its committees and the executive team.
On the next page, examples are given of the Board andits committees’ consideration of climate-related factors
in the course of their review of major plans of action, risk
management policies, annual budgets and business plans,
and when overseeing major capital expenditure.

Board skills and diversity

The non-executive directors contribute diverse operational
and international experience, an understanding of theindustry in which Woodside operates, knowledge offinancial markets and an understanding of the health,safety, environmental, community and other sustainability
matters that are important to Woodside.
The Board supplements its climate change awareness byseeking the input of executives and external advisers tofurther inform its decisions.

Executive renumeration
Woodside’s approach to executive remuneration is detailed
in our Annual Report 2022. Woodside’s 2022 Corporate
Scorecard included five equally weighted measures,
including material sustainability issues. This included
Woodside’s year-end gross equity greenhouse gas
emissions. The CEO was also assessed against individual
metrics including advancing the company’s strategy totransform the way we work in response to theenergy transition and progressing our portfolio of newenergy investments.
Refer to the remuneration report in the Annual Report 2022
for details of the Corporate Scorecard outcomes, and theindividual performance of the CEO and senior executives
and their remuneration outcomes for 2022.

The Board considers that collectively the directors
represent the skills, knowledge and experience necessary
and desirable to direct the company, including in relation totheir oversight of climate-related risks and opportunities.

FIGURE 23: BOARD AND EXECUTIVE RELATIONSHIP
Board of directors

Sustainability
Committee

Human Resources &Compensation Committee

Audit & Risk
Committee

Nominations & GovernanceCommittee

CEO

Strategy and Climate1

Business Groups2

1 See page 50 for information about this role.
2 In addition to Strategy and Climate the Woodside business groups are Exploration and development; Projects; Australian operations; International operations; New energy; Marketingand trading; Technical services, Corporate services, and Finance.

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Climate Report 2022

Board of directors

The Board meets at least six times a year and its responsibilities include review of systemsof risk management, compliance and control.
In 2022, discussions at Board meetings included updates on progress towards Woodside’s net
equity Scope 1 and 2 greenhouse gas emissions reduction targets including year to date andyear end outlook. Other updates related to asset decarbonisation plans, the methane emissions
reduction plan, Scope 3 emissions plan, progress of new energy and carbon management
opportunities, and external engagements and news. Climate-related topics were also
included in the review of Woodside’s strategic risk profile as a result of the merger with
BHP’s petroleum business.

Sustainability Committee

The role of the Sustainability Committee is to assist the Board to meet its oversight
responsibilities in relation to Woodside’s sustainability policies and practices.
Climate change is a standing item on the agenda for each meeting which is scheduled at least
four times a year.
In 2022, updates to the Sustainability Committee included information about our performanceagainst targets, asset decarbonisation plans, employee engagement, external policy
developments, and investor expectations of climate-related disclosures.
As well as receiving regular updates from the Executive Vice President Strategy and Climate,
the Committee uses its meetings to provide feedback to the executive team on the developmentof climate-related initiatives prior to their formal presentation to the Board.

Audit & Risk Committee

The role of the Audit & Risk Committee is to assist the Board to meet its oversight responsibilities
in relation to Woodside’s financial reporting, compliance with legal and regulatory requirements,
internal control structure, risk management and insurance procedures and the internal andexternal audit functions.
Climate change risk is one of Woodside’s strategic risks. In 2022, the Audit & Risk Committee
formally reviewed this once, in addition to the Board’s review of Woodside’s strategic risk profileas part of the merger.
The Committee also considers the inclusion of climate-related risks within Woodside’s internal
audit program and the appropriateness of disclosures on climate-related risk within the
consolidated financial statements.

Human Resources &Compensation Committee

The role of the Human Resources & Compensation Committee is to assist the Board inestablishing human resources and compensation policies and practices that are aligned withWoodside’s strategy and the expectations of shareholders.
This includes reviewing and making recommendations to the Board on executive and other
employee remuneration.
In 2022, Woodside adopted a specific measure for gross equity Scope 1 and 2 greenhousegas emissions in the Corporate Scorecard, which is used to determine performance-based
remuneration for all staff.1

Nominations & GovernanceCommittee

1

The role of the Nominations & Governance Committee is to assist the Board to review Board
composition, performance and succession planning. This includes identifying, evaluating andrecommending candidates for the Board, taking into account the factors discussed under
Board skills and diversity on page 48.

Gross equity emissions are calculated prior to retirement of carbon credits as offsets, focusing the organisational priorities on avoiding and reducing emissions.

Woodside Energy Group Ltd|

49

S ection 5 . 2

Management’s role in assessing
and managing climate-related risks
and opportunities
Following the completion of the merger between Woodside and
BHP’s petroleum business on 1 June 2022, Woodside createda new Strategy and Climate Group. Led by an Executive Vice
President (EVP) who reports directly to the Chief Executive
Officer, the new group integrates climate strategy with thecompany’s corporate strategy and external economic analysis.
The purpose of this group is to understand and anticipate therapidly changing world around us and the expectations of
our stakeholders, form a view on the path to create long-termvalue in areas of comparative advantage, communicate thevalue and contribution of our company, and nurture and sustain
relationships that create the foundation for success beyond theenergy transition.
The climate-related part of the group has three parts:
1.

A climate strategy and policy team responsible forrecommending Woodside’s strategy and targets to theBoard, articulating them through clear disclosures, andengaging with interested stakeholders

2. A decarbonisation team responsible for operationalising
Woodside’s strategy and targets, by equipping assets andfunctions with the right tools, procedures and leadership
culture3. An emissions accounting team that forecasts andaggregates emissions at the portfolio level for reporting
purposes and to inform strategic decision-making.
This group receives information on climate-related issues froma variety of sources including publications, subscription services
and external advisors.
The EVP of Strategy and Climate is a member of the Executive
Leadership Team. The Executive Leadership Team meets regularly
and, in addition to the perspective brought to its meetings by
the EVP of Strategy and Climate, periodically receives specificclimate-related updates from the business. In 2022, these included
topics such as the methane emissions reduction plan, asset
decarbonisation plans and technology decarbonisation plan.

CultureMinimising emissions is a focus area for operators, maintainers,
engineers and management. It is a priority for all operated
sites, along with maintaining safe and cost-efficient
operations, and is embedded into daily activities such as
150

Please see glossary for a definition of how Woodside uses the term lower carbon energy provider.

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Climate Report 2022

including a methane check box on daily SAFE (See, Assess,Fix, Encourage) cards to support operational find and fix
behaviours. Reward and recognition is also linked to emissions
reduction activities.
Activities were undertaken in 2022 to educate and inform key
personnel to further encourage action. For example, a statement
was included in performance metrics for key personnel in 2022
to build understanding of the emissions footprint of their roleand how they can influence outcomes.
Woodside also has a staff-led community network, Woodside
Energy Climate Awareness Network (WECAN), which
encourages employees to share knowledge and contributeto Woodside’s objective to thrive in the energy transition asa low cost, lower carbon energy provider.1 WECAN has morethan 400 members. BHP’s petroleum business had an existing
employee network called SPARK. WECAN and SPARK haveworked together to provide opportunities for all staff members
to engage with and learn about Woodside’s approach to climatechange. This included a WECAN for Climate forum timed tocoincide with the COP-27 global summit in Egypt in November
2022, which included team discussions, internal and external
keynote speakers, and technical drop in sessions for staff totalk to Woodside’s subject matter experts about aspects of ourclimate and sustainability plans.

Advocacy
Woodside regularly engages with governments of countries
where we are active in support of our business strategy, toexchange information, and to inform policy development anddecision making. This engagement is undertaken both directly
and by working with industry associations.
Woodside’s participation in government consultations related
to climate change is summarised on the next page. Woodsidealso participates in a number of industry associations and ourapproach to this is explained in our Industry Association Climate
Alignment Review.
During 2022, Woodside engaged with a range of Australian State
and Commonwealth members of parliament to understand theirinterests and to communicate information about our activities.
For more information on our industry associations
please see our website.

In addition, Woodside has:
• Co-chaired the Low Emissions Pathways/Net Zero Taskforceof the International Petroleum Industry Environment andConservation Association (Ipieca)• Participated in a range of representative groups, including
the steering committee of the Australian Energy Transition
Initiative, the Climate Leaders Coalition, the Ipieca Scope
3 Taskforce, the Chamber of Minerals and Energy’s Energy
Transition Working Group and the Western AustralianGovernment’s LNG Jobs Taskforce on topics related to CCS
and decarbonising the LNG sector.
Woodside is aware that the Science Based Targets Initiative(SBTi) is considering a methodology for the oil and gas sector.
The methodology is not yet complete. Woodside has discussed
technical matters with SBTi in respect of the methodology thatneed to be resolved for it to be applicable for consideration by
Woodside. Woodside also monitors and, if appropriate, engages
with the Transition Pathway Initiative, Climate Action 100+,Carbon Tracker and Influencemap.

Climate-related advocacy undertaken by Woodsidein 2022
The Safeguard Mechanism Reforms consultation
Woodside responded to various Australian Government
consultations relating to its Safeguard Mechanism. A fair, robust
and transparent Safeguard Mechanism can support a reductionin Australian emissions, as well as encourage businesses andindustries to further innovate and adopt smarter practices andtechnologies in line with our collective emissions reduction
targets. Woodside also welcomed the Australian Government’s
legislation of its 43% emissions reduction target.
IFRS Foundation’s International Sustainability Standards
Board exposure drafts
Woodside supports the harmonisation of global standards aroundtransparent emissions reporting. We made a submission on theInternational Sustainability Standards Board’s (ISSB) proposed
standards welcoming the ISSB consultation process and the intent
to produce globally applicable sustainability reporting standards.
We believe that, if properly implemented, there is the potential thatboth reporters and users of reports will benefit from harmonisationof standards and a common understanding of the key concepts,
terms and the purposes for which disclosures can be relied upon.
Green energy superpower
The Australian Parliament’s Joint Standing Committee on Tradeand Investment Growth held an inquiry into Australia’s transition
to a green energy superpower. Woodside’s response noted
the potential role of Australia’s natural gas resources and also
included suggestions on how the government could incentivise
the supply and demand for new energy products and lower
carbon services.
Corporate Emissions Reduction Transparency scheme (CERT)
Woodside submitted data in March 2022 on our 2021 activity tosupport the Clean Energy Regulator’s (CER) pilot release of the
Corporate Emissions Reduction Transparency scheme (CERT).

The CER independently confirmed a 10% reduction in Scope 1
and 2 net equity greenhouse gas emissions from Woodside’s
baseline in 2021, or 62% progress towards Woodside’s 2025
Scope 1 and 2 net equity greenhouse gas emissions target.
Woodside has continued to engage with the CER on enhancing
the process for the 2023 CERT report.
Western Australian Environmental Protection Authority
Greenhouse Gas Emissions Factor Guidelines
Woodside supported its industry associations, in particular the
Chamber of Minerals and Energy (CME) of Western Australia,
in preparing submissions regarding the proposed guidance fromthe Western Australian Environmental Protection Authority(EPA) on project specific emissions reduction planning.
Hydrogen Guarantee of Origin
Woodside supports the CER initiative to establish emissions
intensity certification of the production of hydrogen. To informthe development of a Guarantee of Origin scheme for hydrogen,
the CER is undertaking trials, including the proposed H2Perthand H2TAS projects. The trials are running collaboratively with
the Department of Climate Change, Energy, the Environment
and Water, which is responsible for wider consultation. The
scheme will be co-designed with industry and key stakeholders.
Gas price caps
Woodside expressed concerns related to the AustralianGovernment’s Treasury Laws Amendment (Energy Price ReliefPlan) Act (Cth) 2022 due to its potential impact on the east
coast energy market. Woodside is concerned the legislation may
discourage investment in domestic gas supply and undermine
the fair operation of the market, potentially inhibiting the rolethat gas can play in decarbonising the economy as described inthis report.
Climate Change Authority (CCA) review of international
offsets
Woodside produced a submission that supports the use ofinternational offsets that:• Are scientifically verified and accurately accounted for using
robust methodologies• Would be effective under an operationalised Article 6 of theParis Agreement• Have effective corresponding adjustments for countries’
Nationally Determined Contributions.
Independent Review of ACCUs
Woodside believes that carbon credits such as ACCUs play
an important role in greenhouse gas emissions reduction. At
the same time, we recognise that the Government’s Emissions
Reduction Fund (ERF) scheme needs to be considered atregular intervals to retain and build confidence in markets
and we welcomed the Independent Review. Our submission
to the review had three recommendations on transparency ofstandards, delivery of Article 6 of the Paris Agreement, and on
the need for open and transparent stakeholder engagement
ahead of implementing any change.

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51

S ection 5 . 3

Just transition
The Paris Agreement emphasises “the intrinsic relationshipthat climate change actions, responses and impacts have withequitable access to sustainable development and eradicationof poverty”. It also takes into account “the imperatives of a justtransition of the workforce and the creation of decent work andquality jobs”.1
Some governments, organisations, and communities have begun
work to understand and plan for a transition which is equitable
and inclusive. For example the IEA’s Global Commission forPeople-centred Clean Energy Transitions reported in 2021 that
“People-centred clean energy transitions require a focus on
skills, decent jobs and worker protection; social and economic
development; equity, social inclusion and fairness; and engaging
people as active participants.”2When we consider Woodside’s contribution towards a justtransition we primarily consider our investment in supplying the
products and services that our customers need as they secure
their energy needs and reduce their emissions.

Our broader contribution to society is outlined in the United
Nations Sustainable Development Goals section of the
Sustainable Development Report 2022. It includes but is not
limited to:• Provision of decent work. Please also see the People andculture section of the Sustainable Development Report 2022
for more information.
• Our approach to the inclusion of local content in the
procurement of goods and services. Please see theSupply chain and local content section of the Sustainable
Development Report 2022 for more information.
• Payments to government including taxes. Please see the Taxtransparency section of the Sustainable Development Report
2022 for more information.
• Social contribution and stakeholder engagement including
amongst others, employee engagement, partnering with
communities and social investment. Please see the Social
section of the Sustainable Development Report 2022 for more
information.
• Research programs and contributions towards scientificresearch and studies. Please see the Environment andbiodiversity section of the Sustainable Development Report
2022 for more information.
Collaboration
The scale of the change required to achieve a just transition will
require commitment and collaboration between governments,
industry, investors and communities. Our approach is informed byour membership of Ipieca’s Just Transition Task Force that aims to
support collaboration and sharing of good practice as companies
develop their decarbonisation plans. Woodside is also a memberof various international forums that encourage information sharing
and collaboration across industry.

1 UNFCCC 2016. The Paris Agreement, preamble.
2 IEA (2021), “Recommendations of the Global Commission on People-Centred Clean Energy Transitions”, IEA, Paris, All rights reserved.

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Climate Report 2022

Woodside Energy Group Ltd|

53

S ection 6 : R I S K M A N A G E M E N T

S ection 6 . 1

Risk management framework
Woodside is committed to managing risks in a proactive
and effective manner. We apply a structured andcomprehensive approach to the identification, assessment
and treatment of current risks and in response to
emerging risks.
Our approach to risk management aims to enable us totake risk in return for reward, protect us against negative
impacts and improve our resilience to emerging risks.
Woodside recognises that risk is inherent in our businessand the effective management of risk is vital to deliver our
strategic objectives, continued growth and success.
Our framework is aligned with the overarching principles of
the International Standard ISO31000 for risk management,
providing line of sight of risk at appropriate levels of theorganisation, including the executive team and the Board,
based on defined materiality thresholds.

FIGURE 24: RISK MANAGEMENT PROCESS

teria

Cri
Scope, Context &Risk Identification
Risk Analysis
Risk Evaluation

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Climate Report 2022

CO R

D IN G & R E P O RT

The framework requires a twice-yearly review by the
executive team and the Board to evaluate the strategic risk
profile, the effectiveness of the management of the material
current risks and our resilience to emerging risks. In 2022, theBoard reviewed and confirmed that our risk management
framework is sound, and that Woodside is operating with
due regard to the risk appetite endorsed by the Board.
Climate change is one of the seven strategic risks identified
within Woodside’s strategic risk profile. It is therefore a
key risk to our strategy and our business, alongside theother six strategic risks described in our Annual Report
2022. This means that the risk management frameworkdescribed on these pages is specifically applied toconsideration of climate-related risks and opportunities.
This includes the evaluation of climate-related risk, andcommunication of this evaluation to senior management
and the Board.
Refer to Annual Report 2022 section 3.8
for information.

The identified potential key climate-related risks andopportunities are described on pages 56-57 and a focus
on physical risks is on pages 22-23.

Risk Treatment

RE

ICATIONMUN
OM&CMONITO
R&

ON
TI

RE
VI
EW

CO
NS
UL
TA

A key objective of our approach to risk management isto provide a single consolidated view of risks across thecompany to quantify our full risk exposure and prioritiserisk management and governance. Our assessment ofrisk considers both financial and non-financial exposures,
including health and safety; environment; finance;
reputation and brand; legal and compliance; social andculture. This assessment is performed against a risk matrix
that supports consistent judgement of materiality acrossthe business and defines materiality thresholds thattrigger communication of the risk to the relevant level ofmanagement. The risk matrix guides the assessment ofconsequence and likelihood which enables prioritisation of
the risk.

ING

The risk management framework helps to provide an
integrated and coordinated approach to the managementof climate change across the business and that the risks
posed by the transition to a lower carbon economy arerecognised, including changes in policy, regulation orsocial expectations in current or future markets.

Risk appetite

Risk register

In 2020, the Board endorsed Woodside’s Risk Appetite
Statement. This is a set of principles-based, qualitative
statements that presents a collective and aligned view of theBoard’s appetite to take and accept risk, in pursuit of our strategic
objectives. It provides guidance to the executive team on thetype and amount of risk that is acceptable and is intended toencourage conscious engagement and informed decision making,consistent with other company policies, including our Climate
Policy. The Risk Appetite Statement remains valid post merger.

Woodside prioritises risk management actions and governancethrough use of risk register tools. In 2023, Woodside will merge
the existing heritage Woodside and heritage BHP registers toform a single risk register. The functionality within the register
provides transparency and enhances the ability of senior leaders
to effectively manage and govern climate-related risks, including
checking that identified actions to address or manage risk havebeen closed out.

Our risk and compliance behaviours
Woodside recognises that when faced with challenge anduncertainty, it is the actions, behaviours and responses of ourleaders at all levels that shapes our culture. In 2021, Woodsidereleased an ‘Our Risk and Compliance Behaviours’ framework
to provide further guidance on the positive behaviours that
promote a strong risk and compliance culture.
These behaviours recognise that the world we live and work in
is constantly changing and we need to adapt in order to thrive
as a business. They recognise the need to confront and embracerisk, challenge our conventional ways of working and makecourageous decisions, while keeping each other safe, complying
with the law and maintaining our social licence to operate.

Woodside Energy Group Ltd|

55

Key climate-related risks and opportunities
This table describes the potential for climate-related risks and opportunities to impact Woodside’s
business, strategy, and financial planning, including potential financial impacts and potential mitigations.
This does not necessarily mean that the risks have materialised in practice or that the mitigations are
currently being pursued. This is presented using the TCFD framework.
Timeframe*
S

M

Type of potential impact

Potential financial impacts*Timeframe:1
S: now to 2025 (short)
M: 2026-2035 (medium)
L: 2036 and beyond (long)

Potential mitigations

L

Policy and legal risks

Transition risks

The global transition to a lower carbon economy may entail extensive policy, legal, technology and market
changes in order for the world to address mitigation and adaptation requirements relating to climate change.

Exposure to litigation• Increased operating costs• Deferred revenue from project
startups due to delays to, or failure to
Delays to, or failure to obtain, project
obtain, regulatory approvals
approvals•
Asset valuation changes
Increased pricing or other regulatory• Legal costs and fines
control of emissions• Increased decommissioning costs
Mandates or controls on hydrocarbon• Shareholder divestment
product use or access to growth• Access to capitalacreage
Increased emissions reporting
requirements• Adopt and deliver targets for net
equity emissions reduction• Report in alignment with TCFD
recommendations and emerging
standards• Build a diverse carbon credits
portfolio• Engage regulators and stakeholders• Monitor global policy and legal
developments• Diversity of geographical footprint

Technology
Unsuccessful investment in newtechnologies
Higher than expected costs oftransition to new technologies• Loss of research and development
expenditure• Increased operating costs• Impact on revenue• Technology collaboration andpartnerships• Opportunity management process• Maintain internal capability withproven track record• Jurisdictional diversity for leveraging
legislative incentives• Lower demand for hydrocarbon,
new energy or lower carbon services
relative to investment case
• Natural gas crowded out of carbon
budget by coal and/or unable toachieve attractive pricing• Under or over investment in productportfolio components• Modified and unstable tax and fiscal
settings• Stranded assets• Implement strategy to be a low costand lower carbon energy company• Scope 3 emissions plan
• Capital allocation framework• Customer and market engagement• Scenario analysis• Portfolio and market diversity• Carbon border adjustment
mechanisms or related policy• Increased operating costs• Increased capital costs• Exacerbated policy and legal risks• Impact on revenue• Inhibited growth• Shareholder divestment• Adopt and deliver targets for net
equity emissions reduction• Report in alignment with TCFD
recommendations and emerging
standards• Engage regulators and stakeholders• ESG planning and engagement

Overreliance on policy support tosupport commerciality
Technology disruption
Inability to develop at scale due tocompetition for resources, people
or technology

MarketFaster than expected substitutionof hydrocarbon products
Slower than expected adoptionof new energy and lower carbon
services
Slower than expected phase-out
of coalUncertainty/regional variation intransition pathways
Demand destruction due todisorderly transition or being an
unpreferred provider

Reputation
Increased stakeholder concern
Targets fail to meet stakeholder
expectations
Stigmatisation of hydrocarbon
energy sector
Constrained access to talent
Constrained access to capital
Inability to pursue range ofclimate-related pathways
Targeted extreme activism

156

Woodside has selected these short, medium and long term timeframes reflecting the nature of its business. The short term period can impact its current producing assets and sanctioned projects; themedium term timeframe could impact on these current assets and sanctioned projects as well as opportunities under active evaluation but not yet subject to a final investment decision; and the longterm timeframe could impact on both these categories of asset and project as well as opportunities beyond current consideration.

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Climate Report 2022

Timeframe*

Physical risks

Physical risks from climate change may have financial implications for organisations
such as direct damage to assets and indirect impacts from supply chain disruption.

S

M

Type of potential impact

Potential financial impacts

Potential mitigations

Increased frequency, severity and/or duration of extreme weather
events, such as tropical cyclones,
hurricanes, rainfall, flooding, storm
surge, lightning, squalls, bushfires
and/or heat waves• Damage to assets/reduced
asset life (Stranded assets)• Decreases in production• Increases in emergency responserelated costs• Supply chain and logistics disruptions
and/or cost increases• Decreased workforce productivity• Underperformance of tree planting• Design of facilities to withstand harsh
operating environments• Equipment redundancy/sparing• Maintenance of safety criticalequipment and control systems• Business and performance planning• HSE culture and procedures• Emergency response plans andprocedures• Supplier relationship frameworks anddiversification• Annual preventative bushfire
maintenance and geographic
diversity in carbon offset origination
portfolioLonger-term shifts in climate
patterns, such as warmer ambient
temperatures, rising sea levels,
coastal erosion, reduced water
availability, and lower rainfall in tree
planting areas• Decreased production• Decreased workforce productivity• Increased operating and capital
cost required to maintain current
performance• Underperformance of tree planting• Design of facilities to withstand harsh
operating environments• Equipment redundancy/sparing• Maintenance of safety criticalequipment and control systems• HSE culture and procedures• Geographic diversity in carbon offset
origination portfolio• Desalination as technology option foraccess to water• Increased sales revenue• New revenue streams• Reduced operating costs• Asset decarbonisation plans• Optimisation reference plans• Scope 3 emissions plan influencing
suppliers

L

Acute

Chronic

Resource efficiency

Opportunities

Efforts to mitigate and adapt to climate change also produce opportunities for organisations.

Fuel gas savings diverted tosales gasMore efficient shipping fleet
More efficient building stock
Recycling of decommissioned
materials

Energy source
Use of renewable energy generation • Increased production• Reduced operating costs
Use of efficient technologies• Reduced exposure to carbon costs
Use of energy storage• Develop a new energy business• Design out emissions• Asset decarbonisation plans

Products and services
Diverse portfolio of products
and services including natural gas
in decarbonisation pathways• Reduced demand side risk
• Ability to achieve attractive pricing• Lower operating costs• Capital allocation framework• Technology collaboration andpartnerships• Portfolio diversity• Customer and market engagement• Reduced development costs• Engage regulators and stakeholders• Climate-related advocacy• Diverse revenue streams• Better competitive position to reflect
shifting consumer preferences• Capital allocation framework• Scope 3 emissions plan

Development of new business lines
New technologies for forecasting
physical risk

Markets
Use of public sector incentives
Collaborative partnership withcustomers, research institutions andbroader industry organisations
Access to new markets

Resilience
Broader portfolio inclusive of oil,gas and new energy opportunities
Access to sustainable financeDecrease climate risk in the supply
chain
Capital allocations strategy to flex
between product streams
Woodside Energy Group Ltd|

57

S ection 7 : A P P E N D I C E S

S ection 7 . 1

Climate-related data
Metric*Unit of measure

2022

2021

Hydrocarbon production
Total – equity1,2

kt

18,752

10,522

Total – operated1,3

kt

30,36125,807

Sales (including Traded Hydrocarbons) – equity4

kt

20,261

12,977

Global Scope 1 and 2 greenhouse gas emissions5
Scope 1 and 2 emissions – equity (net)2,6

kt CO2-e

4,615

3,235

Scope 1 emissions – equity (gross)

kt CO2-e

5,357

3,541

Scope 2 emissions – equity (gross)

kt CO2-e

13

6Equity offsets retired in respect of annual emissions

kt CO2-e754

312

Scope 1 and 2 emissions – operated (gross)3

kt CO2-e

9,573

8,908

Scope 1 emissions – operated (gross)

kt CO2-e

9,565

8,901

Scope 2 emissions – operated (gross)

kt CO2-e

8

8

%

95

99.5

2,412

Percentage of equity Scope 1 and 2 emissions covered underemissions limiting regulations7

Sources of Scope 1 greenhouse gas emissions
Fuel combustion

kt CO2-e

3,612

Flare

kt CO2-e

688

461

Ventingkt CO2-e

1,057

667

Other

kt CO2-e00.2Methane emissions (greenhouse equivalent) - equity

kt CO2-e

193

133

Percentage of equity gross Scope 1 and 2 emissions that are methane%

Methane intensity – equity

Methane4

3.7

t CH4 / kt total production

0.42

0.45

Methane intensity – equity (Sm3 / Sm3 marketed gas)8

%

0.072

0.064

Methane emissions (greenhouse equivalent) – operated

kt CO2-e273

326

Methane intensity – operated

t CH4 / kt total production

0.32

0.45

Methane intensity – operated (Sm3 / Sm3 marketed gas)8

%

0.054

0.064

Global Scope 3 greenhouse gas emissions estimates
Scope 3 emissions – equity, total

kt CO2-e

60,69937,186

Scope 3 emissions – purchased goods and services, related to Traded
Hydrocarbon – equity

kt CO2-e

1,011

1,375

Scope 3 emissions – selected other upstream – equity9

kt CO2-e

256

200

Scope 3 emissions – downstream transportation and distribution – equity10,11

kt CO2-e

1,477

819

Scope 3 emissions – use of sold product, related to Woodside production– equity

kt CO2-e

53,18827,906

Scope 3 emissions – use of sold product, related to Traded Hydrocarbon– equity12

kt CO2-e

4,768

6,886

Scope 1 and 2 emissions intensity – equity (net)kt CO2-e / kt

0.25

0.31

Scope 1 and 2 emissions intensity - operated (gross)

kt CO2-e / kt

0.32

0.34

Scope 1, 2, 3 emissions intensity of production13

g CO2-e / MJ

63

58

Greenhouse gas emissions intensity* The amounts in this report have been rounded to the nearest unit of measure. Small differences are due to rounding.
1 Hydrocarbon production includes exportable hydrocarbons only and comprises of LNG, pipeline gas, crude oil, condensate and natural gas liquids (NGLs). Traded hydrocarbons are excluded.
2 The equity portion of greenhouse gas emissions, flare, fuel and production values include data from non-operated ventures where Woodside owns an equity portion. Where data has been provided
by third parties it has been used. Where data is not available estimates have been used based on extrapolation of historic data.
3 Operated greenhouse gas emissions, flare, fuel and production values are for Woodside operated production assets only, 100% share.
4 Traded hydrocarbons means the purchase and/or sale of spot and/or strip of LNG cargoes, crude oil or pipeline gas.
5 Greenhouse gas emissions, energy values and global warming potentials are estimated in accordance with the relevant reporting regulations in the jurisdiction where the emissions occur (e.g.
Australian National Greenhouse and Energy Reporting (NGER), US EPA Greenhouse Gas Reporting Program (GHGRP)). Australian regulatory reporting principles have been used for emissions injurisdictions where regulations do not yet exist.
6 Equity emissions are based on the GHG Protocol Corporate Standard and the Ipieca Petroleum Industry Guidelines for Reporting Greenhouse Gas Emissions 2nd Edition, May 2011. Equity emissions
from non-hydrocarbon producing subsidiary companies (e.g. shipping companies) are excluded.
7 Remaining 5% is due to international assets and Australian assets with emissions below the Safeguard Mechanism legislation threshold.
8 Methane intensity is calculated as the volume of methane emissions divided by the volume of marketed gas inclusive of LNG, pipeline gas and natural gas liquids.
9 Selected upstream emissions from GHG Protocol Categories 1 (purchased goods and services, not including production of purchased hydrocarbon); 5 (waste generated in operations);
6 (business travel); and 7 (employee commuting). Includes equity emissions associated with Woodside employees and Woodside operated facilities only.
10 Includes emissions associated with the downstream transport (GHG Protocol Category 9) of Woodside’s equity share of hydrocarbon sales. No adjustment has been made for combustion of soldproduct during transport (e.g. LNG combusted by LNG ships, pipeline gas used in transmission compressor stations) and therefore could be double counted.
11 2021 reported value only includes downstream transportation of Woodside equity LNG. 2022 reported number includes downstream transportation of all Woodside equity production.
12 2021 reported value only includes traded LNG.
13 Emissions intensity is calculated based on net equity Scope 1 and 2 greenhouse gas emission as well as equity Scope 3 (use of sold product) and Woodside’s equity production. Metric excludes
emissions and production related to traded hydrocarbons.

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Climate Report 2022

S ection 7 . 2

Glossary
Abate / abatement

Reduction of an amount of carbon dioxide or equivalent.1

AR6-WG1

IPCC (2021). “Climate Change 2021 – the Physical Science Basis. Summary for Policymakers. Working Group I contribution to
the Sixth Assessment Report of the Intergovernmental Panel on Climate Change”.

AR6-WG2

IPCC (2022). “Climate Change 2022: Impacts, Adaptation, and Vulnerability. Contribution of Working Group II to the Sixth
Assessment Report of the Intergovernmental Panel on Climate Change”

AR6-WG3

IPCC (2022). “Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment
Report of the Intergovernmental Panel on Climate Change”

Aspiration

Woodside uses this term to describe an aspiration to seek the achievement of an outcome but where achievement of theoutcome is subject to material uncertainties and contingencies such that Woodside considers there is not yet a suitabledefined plan or pathway to achieve that outcome.

Board

The Board of Directors of Woodside Energy Group Ltd.

Carbon credit

A tradable financial instrument that is issued by a carbon-crediting program. A carbon credit represents a greenhouse gas
emission reduction to, or removal from, the atmosphere equivalent to 1 tCO2-e, calculated as the difference in emissions froma baseline scenario to a project scenario. Carbon credits are uniquely serialised, issued, tracked and retired or administratively
cancelled by means of an electronic registry operated by an administrative body, such as a carbon-crediting program.

Carbon sinks

Carbon sinks are forests and other ecosystems that absorb carbon, thereby removing it from the atmosphere and offsetting
CO2 emissions. (Definition taken from European Commission “Climate change: glossary of common terms and acronyms”.
https://www.eea.europa.eu/help/glossary/eea-glossary/carbon-sink)

CCS

Carbon capture and storage

CCU

Carbon capture and utilisation

CCUS

Carbon capture utilisation and storage

CH4

MethaneCO2

Carbon dioxide

CO2-e

CO2 equivalent. The universal unit of measurement to indicate the global warming potential of each of the seven greenhousegases, expressed in terms of the global warming potential of one unit of carbon dioxide. It is used to evaluate releasing (oravoiding releasing) any greenhouse gas against a common basis.2

COP-26The 26th Conference of the Parties to the United Nations Framework Convention on Climate Change, meeting in Glasgow,
Scotland, November 2021.

COP-27The 27th Conference of the Parties to the United Nations Framework Convention on Climate Change, meeting in Sharm elSheikh, Egypt, November 2022.

Decarbonisation

Woodside uses this term to describe activities or pathways that have the effect of moving towards a state that is lower
carbon, as defined in this glossary.

Equity greenhousegas emissions

Woodside sets its Scope 1 and 2 greenhouse gas emissions reduction targets on an equity basis. This ensures that thescope of its emissions reduction targets is aligned with its economic interest in its investments. Equity emissions reflect thegreenhouse gas emissions from operations according to Woodside’s share of equity in the operation. Its equity share of an
operation reflects its economic interest in the operation, which is the extent of rights it has to the risks and rewards flowing
from the operation.3

FID

Final investment decision

GHG or greenhousegas

The seven greenhouse gases listed in the Kyoto Protocol are: carbon dioxide (CO2); methane (CH4); nitrous oxide (N20);hydrofluorocarbons (HFCs); nitrogen trifluoride (NF3); perfluorocarbons (PFCs); and sulphur hexafluoride (SF6).2

Goal

Woodside uses this term to broadly encompass its targets and aspirations.

IRR

Internal rate of return

LNG

Liquefied natural gas

Lower carbon

Woodside uses this term to describe the characteristic of having lower levels of associated potential GHG emissions whencompared to historical and/or current conventions or analogues, for example relating to an otherwise similar resource,
process, production facility, product or service, or activity.

Lower carbon
economyA lower carbon economy is an economy that produces lower levels of greenhouse gas emissions relative to today’s economy.

Lower carbon
energy provider

Woodside uses this term to describe its aspiration to develop a lower carbon portfolio.

*All footnotes related to this table are displayed at the end of the glossary.

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Lower carbon
portfolio

For Woodside, a lower carbon portfolio is one from which the net equity scope 1 and 2 greenhouse gas emissions, which
includes the use of offsets, are being reduced towards targets, and into which new energy products and lower carbon
services are planned to be introduced as a complement to existing and new investments in oil and gas. Our Climate Policy
sets out the principles that we believe will assist us achieve this aim.

Lower carbon
power

Lower carbon power comes from processes or technologies that produce electricity with a lower greenhouse gas emissions
intensity relative to electricity produced from a higher emissions intensity source.

Lower carbon
services

Woodside uses this term to describe technologies, such as CCUS or offsets that could be used by customers to reduce their
net greenhouse gas emissions.

LNG

Liquefied natural gas

Net equity
greenhouse gas
emissions

Woodside’s equity share of net greenhouse gas emissions.

Net greenhouse gas
emissions

Woodside has set its Scope 1 and 2 greenhouse gas emissions reduction targets on a net basis, allowing for both directemissions reductions from its operations and emissions reductions achieved from the use of offsets. Net greenhouse gas
emissions are equal to an entity’s gross greenhouse gas emissions reduced by the number of retired carbon credits.

Net zeroNet zero emissions are achieved when anthropogenic emissions of greenhouse gases to the atmosphere are balanced byanthropogenic removals over a specified period. Where multiple greenhouse gases are involved, the quantification of net zero
emissions depends on the climate metric chosen to compare emissions of different gases (such as global warming potential,
global temperature change potential, and others, as well as the chosen time horizon).4

New energy

Woodside uses this term to describe energy technologies, such as hydrogen or ammonia, that are emerging in scale but
which are expected to grow during the energy transition due to having lower greenhouse gas emissions at the point of use
than conventional fossil fuels.

NGL

Natural gas liquids

Offsets

The compensation for an entity’s greenhouse gas emissions within its scope by achieving an equivalent amount of emission
reductions or removals outside the boundary or value chain of that entity.

Operator,
Operated andnon-operated

Oil and gas joint venture participants will typically appoint one company as the operator, which will hold the contractual
authority to manage joint venture activities on behalf of the joint venture participants. Where Woodside is the operator ofa joint venture in which it holds an equity share, this report refers to that joint venture as being operated. Where anothercompany is the operator of a joint venture in which Woodside holds an equity share, this report refers to that joint venture
as being non-operated.

Paris aligned
scenarios

Consistent with limiting global warming to below 2°C above pre-industrial levels and pursuing efforts to limit warming
to 1.5°C.2

Retirement

The transfer of a carbon credit to a registry account that permanently removes the carbon credit from circulation. The term
retirement applies to the use of the carbon credit by an entity to meet voluntary commitments or compliance obligations.

SASB

Sustainability Accounting Standards Board

Science-basedtargets

Targets are considered science-based if they are in line with what the most recent climate science sets out is necessary tomeet the goals of the Paris Agreement — limiting global warming to below 2°C above pre-industrial levels and pursuingefforts to limit warming to 1.5°C.2

Short-, mediumand long-term

This report refers to ranges of time as follows: short-term means from now until 2025; medium-term means 2026-2035;
long-term means 2036 and beyond.
Woodside also refers to “near-term” and “medium-term” in the specific context of its net equity Scope 1 and 2 greenhousegas emissions reduction targets. In this context, near-term refers to the 2025 as a point in time, and medium term refers to2030 as a point in time, being the years to which the targets relate.

Scope 1 GHG
emissions

Direct GHG emissions. These occur from sources that are owned or controlled by the company, for example, emissions
from combustion in owned or controlled boilers, furnaces, vehicles, etc.; emissions from chemical production in owned orcontrolled process equipment. Woodside estimates greenhouse gas emissions, energy values and global warming potentials
are estimated in accordance with the relevant reporting regulations in the jurisdiction where the emissions occur (e.g.
Australian National Greenhouse and Energy Reporting (NGER), US EPA Greenhouse Gas Reporting Program (GHGRP)).
Australian regulatory reporting principles have been used for emissions in jurisdictions where regulations do not yet exist.3

Scope 2 GHG
emissionsElectricity indirect GHG emissions. Scope 2 accounts for GHG emissions from the generation of purchased electricity
consumed by the company. Purchased electricity is defined as electricity that is purchased or otherwise brought into theorganisational boundary of the company. Scope 2 emissions physically occur at the facility where electricity is generated.
Woodside estimates greenhouse gas emissions, energy values and global warming potentials are estimated in accordancewith the relevant reporting regulations in the jurisdiction where the emissions occur (e.g. Australian National Greenhouse andEnergy Reporting (NGER), US EPA Greenhouse Gas Reporting Program (GHGRP)). Australian regulatory reporting principles
have been used for emissions in jurisdictions where regulations do not yet exist.3

Scope 3 GHG
emissions

Other indirect GHG emissions. Scope 3 is a reporting category that allows for the treatment of all other indirect emissions.
Scope 3 emissions are a consequence of the activities of the company, but occur from sources not owned or controlled by
the company. Some examples of Scope 3 activities are extraction and production of purchased materials; transportation ofpurchased fuels; and use of sold products and services. Please refer to the data table on page 58 for further information on
the Scope 3 emissions categories reported by Woodside.3*All footnotes related to this table are displayed at the end of the glossary.

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Climate Report 2022

Stranded assets

Stranded assets can be broadly defined as assets which ‘suffer from unanticipated or premature write-offs, downward
revaluations or conversion to liabilities’.

TargetWoodside uses this term to describe an intention to seek the achievement of an outcome, where Woodside considers
that it has developed a suitably defined plan or pathway to achieve that outcome.

TCFD

Taskforce on Climate-related Financial Disclosures.

Units of measurebcm

billion cubic metres

EJ

Exajoule

g

Gram

GJ

Gigajoule

GW

Gigawatt

GWh

Gigawatt hour

kW

Kilowatt

MJ

Megajoule

Mt

Million tonnes

Mtpa

Million tonnes per annum

MW

Megawatt

MWh

Megawatt hour

Sm3Standard cubic metre

Tonnes (t and kt)

In this report, “t” means tonne and “kt” means kilotonne, being one thousand tonnes.

tpd

Tonnes per day

1

Definition as per the Australian Government Climate Change Authority. https://www.climatechangeauthority.gov.au/sites/default/files/2022-08/Review%20of%20International%20Offsets%20-%20
Report%20-%20August%202022.pdf.
2 See IFRS Foundation 2021: Climate Related Disclosures Prototype. Appendix A. The IFRS published a further consultation document subsequent to the 2021 prototype. As it did not contain a updated
definition of Paris-Aligned scenarios Woodside has retained use of the previous edition.
3 World Resources Institute and World Business Council for Sustainable Development 2004. “GHG Protocol: a corporate accounting and reporting standard”.
4 IPCC, 2018: Annex I: Glossary [Matthews, J.B.R. (ed.)]. In: Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global
greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty [Masson-Delmotte,V., P. Zhai, H.-O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. Péan, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X. Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor,
and T. Waterfield (eds.)]. In Press. Page 555.

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S ection 7 . 3

Index
INDEX TO TCFD RECOMMENDATIONS AND SUPPORTED RECOMMENDED DISCLOSURES1
Governance: Disclose the organization’s governance around climate-related risks and opportunities.
Describe the board’s oversight of climate-related risks and opportunities.

Pages 48-49

Describe management’s role in assessing and managing climate-related risks and opportunities.

Pages 50-57

Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s
businesses, strategy, and financial planning where such information is material.
Describe the climate-related risks and opportunities the organization has identified over the short, medium, andlong term.

Pages 56-57

Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, andfinancial planning.

Pages 8-39

Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios,
including a 2°C or lower scenario.

Pages 24-25

Risk Management: Disclose how the organization identifies, assesses, and manages climate-related risks.
Describe the organization’s processes for identifying and assessing climate-related risks.

Pages 54-55

Describe the organization’s processes for managing climate-related risks.

Pages 54-55

Describe how processes for identifying, assessing, and managing climate-related risks are integrated into theorganization’s overall risk management.

Pages 54-55

Metrics and Targets: Disclose the metrics and targets used to assess and manage relevant climate-related risks andopportunities where such information is material
Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its
strategy and risk management process.

Pages 40-47

Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.

Pages 56-58

Describe the targets used by the organization to manage climate-related risks and opportunities and performanceagainst targets.

Pages 28-47

INDEX TO SELECTED RELEVANT SASB METRICS2
EM-EP-110a.1 Gross global Scope 1 emissions, percentage methane, percentage covered under emissions-limiting
regulations

Page 58

EM-EP-110a.2 Amount of gross global Scope 1 emissions from: (1) flared hydrocarbons, (2) other combustion,(3) process emissions, (4) other vented emissions, and (5) fugitive emissions

Page 58

EM-EP-110a.3 Discussion of long-term and short-term strategy or plan to manage Scope 1 emissions, emissions
reduction targets, and an analysis of performance against those targets

Pages 8-47

1 Financial Stability Board 2017. “Recommendations of the Task Force on Climate-related Financial Disclosures. Final Report.” Figure 4, Page 14.
2 Sustainability Accounting Standards Board 2018. “Oil & Gas – Exploration and Production . Sustainability Accounting Standard. Version 2018-10.” Table 1, Page 6.

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S ection 7 . 4

Disclaimer, risks, emissions dataand other important information
1. This report has been prepared to provide our investors
and potential investors with information on our plan to help
us achieve our strategic aim to thrive through the energy
transition and how we are progressing against thatstrategic aim.
2. This report has been structured to align with the Task
Force on Climate-related Financial Disclosures (TCFD)
recommendations framework. It aims to provide a balanceof disclosures that meet the recommendations of the TCFD,
while avoiding overwhelming readers with information.
Woodside considers that it addresses TCFD’s fourrecommendations and eleven recommended disclosures,
having had regard to the Guidance for all Sectors andGuidance for Non-Financial Groups.
3. This report has not been prepared as financial or investment
advice or to provide any guidance in relation to our future
performance. It should be read in conjunction with ourperiodic reporting and other announcements made to theAustralian Securities Exchange, New York Stock Exchange
and London Stock Exchange.
4. Given the focus of this report, it is necessarily oriented
towards future events and contains forward looking
information regarding the plans, strategies, objectives,
targets, aspirations and the like of Woodside in relation toclimate change. Neither our plan to help us achieve ourstrategic aim, nor the content of this report more generally,
is a statement, guarantee or prediction that future events willor are likely to occur.
5. The information in this report provides a level of insight
into how we currently intend to direct the management of
our assets and to deploy our capital, to help us achieve ourstrategic aim. The matters disclosed in this report are a ‘point
in time’ disclosure and reflect management’s expectations,judgments, assessments, assumptions, estimates and otherinformation available at the date of this report and/or thedate of our planning processes. We operate in a dynamic
and uncertain market and external environment. Plans andstrategies can and must adapt in response to dynamic
market conditions, joint venture decisions, new opportunities
that might arise or other changing circumstances. Investors
should not assume that our plan to achieve our strategic
aim is locked in and will not evolve and be updated as time
passes. Additionally, a number of aspects of our plan involve
developments or strategies that are complex and may
be delayed, more costly than anticipated or unsuccessful
for many reasons, including reasons that are outside ofWoodside’s control.

6. This report contains forward looking statements that are
subject to known and unknown risk factors and uncertainties,
including those associated with oil and gas businesses andthe global transition to a lower carbon economy.
7. Those forward looking statements are not guidance,
forecasts, guarantees or predictions of future events or
performance. No representation or warranty, express
or implied, is given as to the accuracy, completeness orcorrectness, likelihood of achievement or reasonableness ofany forward-looking information contained in this report.
8. Actual performance against Woodside’s targets (including
items that are described as a target) and aspirations orgoals may be affected by various risks associated with the
Woodside business, the uncertainty as to how the global
energy transition to a lower carbon economy will evolve, andphysical risks associated with climate change, many of which
are beyond Woodside’s control. Further detail on certain of
these risks can be found in the Risk Management section ofthis report and the risk factors section of our Annual Report
2022. These risks include, but are not limited to:• The risk that a transition to a lower carbon economy may
impact demand (and pricing) for oil and liquids, LNG and its
substitute in our portfolio, the policy and legal environment
for its production, our reputation and our operating
environment. Further, the imposition of further regulationand the availability and cost of emission allowances orcarbon offsets could adversely impact costs of operations;• The potential for higher than expected costs of transition to
new technologies, and poor efficacy of new technologies
that could adversely impact the costs of operations andreduce demand for hydrocarbon products, new energy or
lower carbon services; and• The decarbonisation plans of other countries.
9. Readers, including investors and prospective investors,
should review and have regard to these risks and theother risks identified in this report when considering theinformation contained in this report. Readers should also
note that the high degree of uncertainty around the nature,timing and magnitude of climate-related risks, and theuncertainty as to how the energy transition will evolve,
makes it difficult to determine and disclose the risks and theirpotential impacts with precision. Readers are cautioned not
to place undue reliance on any forward looking statements
contained in this report, particularly in light of the longtime horizon which this report discusses and the inherent
uncertainty in possible policy, market and technologicaldevelopments in the future.
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10. The forward looking information contained in this report
may be affected by a variety of variables and changes inunderlying assumptions which could cause actual results
to differ materially from those expressed in the statements
contained in this report. In addition to the risks referenced
above, these include price fluctuations, actual demand,currency fluctuations, drilling and production results,
reserve estimates, loss of market, industry competition,
environmental risks, transition risks, physical risks, legislative,
policy, fiscal and regulatory developments, changes inaccounting standards, economic and financial market
conditions in various countries and regions, political risks,
abatement able to be delivered through engineering
or operational changes, project delay or advancement,
approvals and cost estimates. Some matters are subject toapproval of joint venture participants. The targets, aspirations
and opportunities described in this report might also changematerially if Woodside changes its strategic aim set out inthis report.
11. There are inherent limitations with scenario analysis,
including the limitations set out on page 16 of this report,
and it is difficult to predict which, if any, of the scenarios
might eventuate. Scenario analysis relies on assumptions that
may or may not be, or prove to be, correct and that may or
may not eventuate and scenarios may also be impacted byadditional factors to the assumptions disclosed. As part ofits scenario analysis, Woodside has used climate scenarios
published in the IEA’s 2022 World Energy Outlook and the
TCFD Guidance on Scenario Analysis for Non-Financial
Companies (page 66 describes limitations and uncertainties
associated with the use of the IEA scenarios).1
12. Woodside does not undertake to provide ongoing market
updates on forward looking information, including the planto achieve its strategic aim or targets, or on performanceagainst the plan or targets, except to the extent it has a legal
obligation to do so. Past performance cannot be relied on as
a guide to future performance.

164

13. Subject to any terms implied by law which cannot be
excluded, Woodside accepts no responsibility for any
loss, damage, cost or expense (whether direct or indirect)
incurred by you as a result of any error, omission or
misrepresentation in information in this report.
14. This report does not include any express or implied prices atwhich Woodside will buy or sell financial products.
15. This report is not intended to, and does not constitute, form
part of, or contain an offer or invitation to sell to Woodside(or any other person) or a solicitation of an offer from
Woodside (or any other person) in any jurisdiction.
16. This report may contain industry, market and competitive
position data that is based on industry publications andstudies conducted by third parties as well as Woodside’sinternal estimates and research. While Woodside believes
that each of these publications and third party studies
is reliable and has been prepared by a reputable source,
Woodside has not independently verified the market andindustry data obtained from these third party sources andcannot guarantee the completeness or accuracy of suchdata. Undue reliance should not be placed on any of theindustry, market or competitive position data contained inthis report.
17. Certain other information contained in this report may bebased on information prepared by third parties. Woodsidedoes not make any representation or guarantee that thisthird party material is accurate, complete or up-to-date.
18. All greenhouse gas emissions data in this report are
estimates, due to the inherent uncertainty and limitations
in measuring or quantifying greenhouse gas emissions,
including those uncertainties set out in the GHD AssuranceStatement.
19. Further information regarding the calculation of Woodside’s
greenhouse gas emissions is contained in the supporting tableof climate-related data provided on page 58 of this report.
20. There may be differences in the way third parties calculate
or report greenhouse gas emissions compared to Woodside,which means third party data may not be comparable toWoodside’s data.

The Task Force on Climate-related Financial Disclosures (2020). “Guidance on Scenario Analysis for Non-Financial Companies”.

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S ection 7 . 5

GHD assurance statement

Independent Assurance Statement on Woodside Energy Group Ltd’s Greenhouse Gas(GHG) Statement – Climate Report 2022
To the Management of Woodside Energy Group Ltd (Woodside);
We have undertaken a reasonable assurance engagement of Woodside’s:
Scope
Reasonable
Assurance Scope
Heritage WoodsideassetsAnd

Metrics––

Heritage BHP assets(Operated)
Limited Assurance
Scope
Heritage BHP assets(non-operated)––

Limited Assurance
Scope

–

All assets–

Hydrocarbon production– Total - equity (kt)
– Total - operated (kt)
– Sales (including LNG produced by third parties) - equity (kt)Global Scope 1 and 2 greenhouse gas emissions– Scope 1 and 2 emissions – equity (net) (kt CO2-e)– Scope 1 and 2 emissions – equity (gross) (kt CO2-e)– Equity offsets surrendered in respect of 2022 emissions (kt CO2-e)– Scope 1 and 2 emissions intensity – equity (net) (kt CO2-e / kt)– Scope 1 and 2 emissions – operated (gross) (kt CO2-e)– Scope 1 and 2 emissions intensity - operated (gross) (kt CO2-e / kt)– Percentage of equity Scope 1 and 2 emissions covered by regulation (%)
Sources of scope 1 and 2 greenhouse gas emissions– Fuel combustion (kt CO2-e)– Flare (kt CO2-e)– Venting (kt CO2-e)– Other (kt CO2-e)
Methane– Methane emissions (greenhouse equivalent) - equity (kt CO2-e)– Percentage of equity gross Scope 1 and 2 emissions that are methane (%)– Methane intensity – equity (t CH4 / kt total production)– Methane intensity – equity (Sm3 / Sm3 marketed gas)
– Methane emissions (greenhouse equivalent) - operated (kt CO2-e)– Methane intensity – operated (t CH4 / kt total production)– Methane intensity – operated (Sm3 / Sm3 marketed gas)
Global Scope 3 greenhouse gas emissions estimates– Scope 3 emissions – equity, total (kt CO2-e)– Scope 3 emissions – purchased goods and services, relating to traded LNG (kt CO2-e)– Scope 3 emissions – selected other upstream (assured on aggregate, including: purchased goods
and services, waste generated in operations, business travel and employee commuting) (kt CO2-e)– Scope 3 emissions – downstream transportation and distribution (kt CO2-e)– Scope 3 emissions – use of sold product, relating to produced and traded LNG (kt CO2-e)
Greenhouse gas emissions intensity– Scope 1, 2, 3 emissions intensity of production (grams CO2-e / MJ)

for the year ending 31 December 2022, comprising the 2022 values shown in the supporting data table of Woodside’s
Climate Report (the subject matter referred to hereafter as Woodside’s greenhouse gas (GHG) statement). A
multidisciplinary team including assurance practitioners and engineers conducted this engagement. Note, assurance
was not provided over any Task Force on Climate Related Financial Disclosures (TCFD) or requirements.
Woodside’s responsibility for subject matter
Woodside is responsible for preparing the GHG Statement comprising the values shown in the supporting data table.
This includes the design, implementation and maintenance of internal control relevant to the preparation of a GHG
Statement that is free from material misstatement, whether due to fraud or error.
Our independence and quality control
We have complied with the relevant ethical requirements relating to assurance engagements, which is founded on
fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional
behavior. The firm applied Auditing Standard ASQC 1 Quality Control for Firms that Perform Audits and Reviews ofFinancial Reports and Other Financial Information, and Other Assurance Engagements, and accordingly GHD
maintains a comprehensive system of quality control including documented policies and procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
Our responsibility
Our responsibility is to express an opinion on the GHG Statement based on evidence obtained. We conducted thereasonable assurance engagement in accordance with Australian Standard on Assurance Engagements ASAE 3410

The Power of Commitment

1

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Assurance Engagements on Greenhouse Gas Statements (ASAE 3410). This requires that we plan and perform theengagement to obtain reasonable assurance about whether the GHG Statement is free from material misstatement.
A reasonable assurance engagement in accordance with ASAE 3410 involves performing procedures to obtainevidence about the quantification of emissions. The nature, timing and extent of procedures selected depend on theassurance practitioner’s judgement, including the assessment of the risks of material misstatement, whether due tofraud or error, in the GHG Statement. In making those risk assessments, GHD considered internal control relevant toWoodside’s preparation of the subject matter. A reasonable assurance engagement also includes:–

Assessing the suitability of Woodside’s use of the reporting criteria for the GHG Statement, as the basis for
preparing the GHG statement.
Evaluating the appropriateness of quantification methods and reporting policies used, and the reasonableness of
estimates made by Woodside.
Evaluating the completeness and accuracy of recording, aggregation, and transcription of source data.

––

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Use of our statement
This statement has been prepared for Woodside in accordance with our engagement terms dated 25 November 2022.
GHD disclaim any assumption of responsibility for any reliance on this statement for any purpose other than that for
which it was prepared being the reporting on our reasonable assurance audit.
Our agreed engagement only included the metrics described in this assurance statement for the year ended 31
December 2022. Accordingly, we have not provided assurance over any other GHG data or statements presented
elsewhere or any other data or statements contained within Woodside’s Climate Report 2022.
Whilst our assurance procedures included reviewing information contained on Woodside’s website at the date of thisassurance statement, our opinion does not extend to statements, data or information presented therein. It is noted thatgreenhouse gas emissions quantification is subject to inherent uncertainty because of incomplete scientific knowledge
used to determine emissions factors and the values needed to combine emissions of different gases.
Inherent limitations
There are inherent limitations in performing assurance—for example, assurance engagements are based on selective
testing of the information being examined—and because of this, it is possible that fraud or error may occur and not be
detected. An assurance engagement is not designed to detect all misstatements, as an assurance engagement is not
performed continuously throughout the period that is the subject of the engagement and the procedures are performed
on a test basis. The opinion expressed in our Independent Assurance Statement has been formed on the above basis.
Further Limitations
This report has been prepared by GHD for Woodside Energy Group Ltd and may only be used and relied on by
Woodside Energy Group Ltd for the purpose of reporting on the GHG Statement presented in Woodside’s 2022 Climate
Report. GHD otherwise disclaims responsibility to any person other than Woodside Energy Group Ltd arising inconnection with this report. GHD also excludes implied warranties and conditions, to the extent legally permissible. The
services undertaken by GHD in connection with preparing this report were limited to those specifically detailed in thereport and are subject to the scope limitations set out in the report.
The opinions, conclusions and any recommendations in this report are based on conditions encountered andinformation reviewed at the date of preparation of the report. GHD has no responsibility or obligation to update thisreport to account for events or changes occurring subsequent to the date that the report was prepared.
Reasonable Assurance Opinion
In our opinion, the metrics in Woodside’s GHG Statement for the year ended 31 December 2022 comprising the values
presented in the data table of Woodside’s Climate Report 2022 (over which we have provided reasonable assurance),
have been prepared correctly, in all material respects.
Limited Assurance Opinion
Nothing has come to our attention to suggest that the metrics in Woodside’s GHG Statement for the year ended 31
December 2022 comprising the values presented in the data table of Woodside’s Climate Report 2022 (over which wehave provided limited assurance), have not been prepared correctly in all material respects.

Tom Young
Lead Greenhouse Gas Auditor, RGEA Category 2, GHD Pty Ltd
22 February 2023

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Independent Assurance Statement on Woodside Energy Group Ltd’s Greenhouse Gas Statement – Climate Report 20222

Head Office
Woodside Energy Group Ltd
Mia Yellagonga
11 Mount Street
Perth WA 6000
Postal Address
GPO Box D188
Perth WA 6840
Australia
T +61 8 9348 4000
F +61 8 9214 2777
E companyinfo@woodside.com
Woodside Energy Group Ltd
ABN 55 004 898 962
woodside.com