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12 sep 21

What are the green strategies of major oil companies for 2050?

The rise of EVs directly impacts the oil industry as electric-car battery-pack prices fell 13% in 2020 and the price of a long-range EV is expected to be around $22.000 in 2040.

According to Bloomberg, if EV sales continue to increase at an average of 60% every year, by 2023 oil demand will decrease by 2 million barrels per day. Future energy strategies of major oil companies display an undertaking as if to say oil will not be the only source of energy anymore. 

Shell aims to reach carbon neutrality by 2050 

Shell explains its strategy as taking short steps towards reaching carbon neutrality. These steps will be reducing CO2 emissions up to 20% by 2030, 45% by 2035 and 100% by 2050. 

Shell is currently developing three carbon capture and storage (CCS) projects in Canada, Norway and the Netherlands to increase the capacity 25 million tonnes a year by 2035. Additionally, Shell aims to reduce emissions by 120 million tonnes a year by 2030 under the sustainable nature-based solution (NBS) plan. Shell's other renewable energy solutions include: 

- Doubling the electricity sold today to 560 terawatt-hours by 2030, 
- Investing $100 million every year to independent green projects,
- Developing integrated hydrogen hubs to boost global clean hydrogen sales.
- Extending liquefied natural gas (LNG) volumes and markets to provide more than 7 million tonnes of LNG per year by 2025. 

BP invests heavily in renewable energy 

BP spent $220 million dollars in 2020 to buy several solar energy projects in the US, enough to provide energy to 1.7 million homes, to reach the 20GW green energy output goal by 2025. By 2030, BP plans to increase the output of renewable energy to 50GW. 

Lightsource BP, which formed a joint venture with BP in 2017, entered the Portuguese and Greek solar energy market in 2021, aiming to produce 1.35 GW in the coming five years in Portugal while signing a 640 MW co-development agreement in Greece.

In another major step in its green strategy, BP and its German partner EnBW bought two offshore wind farm licenses in the Irish Sea, at the beginning of 2021. With the addition of six new offshore wind farms in the coming ten years, BP is planning to produce energy to power 7 million homes. The company had also invested $1.1 billion last year in two projects being developed by Norwegian state oil company Equinor. 

BP wants to solidify its green transformation by grabbing a distinctive position in the hydrogen market by gaining a 10% share of hydrogen in core markets. 

Total goes for renewable energy

Total quit the American Petroleum Institute, the main US oil and gas lobby over disagreements on climate policies at the beginning of 2021. After this development, Total purchased 20% of the Indian renewable energy company AGEL and acquired 50% of the Indian company's solar power assets. 

Solar investments continued in Spain and the UK, with an agreement to produce 3.3 GW of power in Spain and a lease to start developing 1.5 GW of electricity off the East Anglian coast in the UK through a joint venture. 

In terms of wind power, Total acquired 23% interest in Yunlin Holding of Taiwan in April for an offshore wind farm project to be completed in 2022. Energy output will be 640 MW, enough to power 605.000 households. 

Total wants to reach 35 GW green energy output by 2025 and 100 GW green energy capacity by 2030. By 2050, Total expects renewables and electricity to represent 40% of global sales. 

ExxonMobil has reacted to heavy pressure 

In its 2021 report, ExxonMobil has set a different approach in its green energy strategy, focusing on cutting CO2 emissions in commercial transportation, power generation and industrial processes. As a result, ExxonMobil plans to reduce greenhouse gases by 15-20% in upstream operations by 2025. This strategy includes: 

- Development of advanced algae and cellulosic liquid biofuels to cut emissions in commercial transportation.
- Advancing carbon capture and storage technology more economically for wider deployment of these technologies. 
- Developing new processes for refining and chemical facilities to reduce energy usage. 

Being under criticism for lagging behind its European rivals in green strategy, ExxonMobil announced in the mid-2021 to spend $3 billion in the next five years to form a new low-carbon business unit. The oil giant aims to fulfil the International Energy Agency’ (IEA) zero-emission goal of 2050. 

Image: Shutterstock

Authored by: Mufit Yilmaz Gokmen