ASA Ruling on Repsol SA (following a complaint by Adfree Cities)

A paid-for online display ad for Repsol, a global energy company, seen on the Financial Times website on July 12, 2023, featured an image of a water droplet with text that stated “Renewable hydrogen, another alternative to reduce emissions. At Repsol, we are committed to renewable hydrogen as an energy source that offers up different uses such as zero net emissions synthetic fuel production”. The ad also featured a series of graphics: the text “H2” encircled by two arrows; a solar panel with a sun; a car with a stylised letter “e” that had a plug at the end; a wind turbine; two arrows that formed a circle; a sapling; and a petrol pump with a leaf on it. Adfree Cities challenged whether the ad was misleading because it omitted significant information about the overall environmental impact of Repsol’s business activities. By ruling of October 18, 2023, the Advertising Standards Authority (“ASA”) upheld that complaint. The CAP Code stated that unqualified environmental claims could mislead if they omitted significant information. The ad appeared on the FT website and in the FT digital energy newsletter. It would therefore have been of interest to investors and those interested in purchasing Repsol’s products. Both audiences would be interested in seeking out businesses, including oil and gas companies, who were making meaningful progress towards transitioning away from higher-carbon products and services, including those developing alternative fuels such as renewable hydrogen. However, consumers and many business readers were unlikely to be aware of the specific details of such technology – for example, that the development of renewable hydrogen was in its infancy and was not yet commercially available. Both consumers and business readers were likely to understand the ad to mean that renewable hydrogen was an alternative to fossil fuels. The ad gave the impression that renewable energy products, including renewable hydrogen, comprised a significant proportion of the energy products Repsol developed and sold, or were likely to develop or sell in the near future. Repsol’s operations in transforming several of their industrial complexes to aid in the production of renewable hydrogen would not commence until 2024, and their development and production of renewable hydrogen was not yet in operation. Repsol’s carbon emissions stood at 171 million tonnes of carbon dioxide equivalent (CO2e) in 2021 (50% of the emissions of the UK in 2021, 346.7 Mt CO2e), and they produced approximately 600,000 barrels of oil per day. They also had a substantial oil and gas exploration strategy, owning an interest in 40,660 acres (gross) of oil and gas development and exploration across Europe, Latin America, North America, Africa, and Asia and Oceania. Large-scale global oil and gas investment and exploration therefore formed the vast majority of Repsol’s business interests. Further information about the proportion of Repsol’s overall business model that comprised lower carbon energy was material information that should have been included in the ad. It therefore omitted material information and was likely to mislead. The ASA ruled that the ad must not appear again in the form complained of. It told Repsol to ensure that their future ads featuring environmental claims did not mislead by omitting significant information about the proportion of their business activities that were comprised of renewable energy, or the role renewable energy and renewable hydrogen played in their business activities.