Oil giants ditch green energy. Image: The Business standard
Oil giants ditch green energy. Image: The Business standard
(The Post News)- Major European companies have prioritized profit over planet, doubling down on oil and gas in 2024. This strategic shift has undermined their climate commitments, a trend that shows no signs of abating in the coming year.
Following the sharp rise in energy prices caused by Russia’s invasion of Ukraine in 2022, many governments worldwide delayed or weakened their climate change policies and clean energy initiatives. As a result, major oil companies have reduced their workforce.
The big European companies which had heavily invested in the clean energy transition discovered that their share performed lagging U.S rivals Exxon and Chevron, which has their focus on oil and gas.
Apart from the backdrop, companies like BP and Shell have immensely slowed their plans to spend billions on wind and solar power projects and and shifted spending to higher-margin oil and gas projects.
BP had aimed for a 20-fold growth in renewable power this decade to 50 gigawatts had announced that it would spin off almosy all its offshore wind projects intoba joint venture with Japanese power gejerator JERA in December. On the other hand, Shell, which had once pledged to become the world’s largest electricity company has vastly stopped investments in mew offshore wind projects and exited power markets in Europe and China, also weakening carbon reduction targets.
It has been also found that Norway’s state-controlled Equinor has also slowed spending on renewables. Analyst at Accela Research, Rohan Bowater states that geopolitical disruptions such as the Ukrakian invasion has weakened CEO incentives to prioritise the low-carvon transition amid high oil prices and evolving investor expectations, Bowater further adds that BP, Shell and Equinor has reduced low-carbin spending by 8% this year.
So far, Shell claims to have remained committed to becoming a net zero emissions energy business by 2050 and is continuing to invest in the energy transition, whilst Equinor says the offshore wind segment has been through tougher times in the past few years because of inflation, cost increase, bottlenecks in this supply chain, but will continue to be selective and disciplined in their approach, and BP has no response.
The recent job cuts in the oil industry are a setback for efforts to combat climate change. Global carbon emissions are projected to reach a new peak in 2024, making it the warmest year on record. The energy sector is poised for another tumultuous year in 2025, with the return of a climate-change skeptic to the White House and potential increased oil demand from China’s economic recovery.
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