European Oil Majors Doubled Spending On Low-Carbon Energy Sources
In just two years, Europe’s oil and gas majors have doubled their planned spending on low-carbon energy—from 10 percent of capex in 2019 to 25 percent of overall spending per current expenditure plans, Wood Mackenzie said on Thursday.
In 2019, the European majors were targeting on average $2 billion each per year invested in alternative energy sources, or 10 percent of capex. In 2021, those companies now shoot for $4 billion annual investment on average in clean energy, or 25 percent of capex on average.
Spain’s Repsol has the most aggressive target of investment in low-carbon energy—at 35 percent of its total annual spending, Tom Ellacott and Greig Aitken of WoodMac’s Corporate Research team said.
Most European majors target renewables, especially solar, onshore and offshore wind, as those technologies are already commercial and scalable and can give Big Oil the exposure to low-carbon energy they seek, according to WoodMac’s experts.
Apart from the doubled investments in clean energy, a major difference from 2019 is that U.S. supermajors, ExxonMobil and Chevron, have also pledged investments in low-carbon energy, WoodMac notes.
The U.S. giants are betting on renewable fuels and carbon capture and storage (CCS) projects, but they are steering clear of solar and wind.
In Europe, BP, Shell, Eni, Equinor, and TotalEnergies boost investments in renewable energy generation, EV charging networks, hydrogen, and CCS. In the offshore wind sector, oil and gas majors say they have the capabilities and skills of their legacy business to develop offshore wind.