This report provides a summary and analysis of oil companies’ strategies for overall and transport energy decarbonization and is the fourth update on a survey originally begun in 2020 (see reports Jan. 31, 2023; Sept. 16, 2020; Oct. 20, 2021). More than 13 companies actively engaged in the energy transition with documented investments in key areas were surveyed for 2023 through the first half of 2024, using annual and corporate sustainability reports, investor presentations and other company statements to document their plans and strategies for the coming years.[1] Topics covered included first and next generation biofuels, sustainable aviation fuel (SAF), electrification and hydrogen, biomethane, other novel fuels and carbon capture utilization and storage (CCUS). A spreadsheet is available here that summarizes the research and links to the primary sources used for this report. The companies included in this survey included:
BP | Pertamina | Shell |
Chevron | Petrobras | TotalEnergies |
ENI | Reliance | Valero |
ExxonMobil | Repsol | |
Marathon | Saudi Aramco |
A mix of companies from the majors to independent oil companies in the U.S. and EU were chosen, including several national oil companies (NOCs) in the Middle East, Asia and Latin America of varying sizes. I wanted to include a mix of geographies beyond the U.S. and EU, so I included companies in Saudi Arabia, India, Brazil and Malaysia, among others. The difference between this and previous reports on the topic is that real investments are being made in many cases – steel is going into the ground, so to speak.
In summary, the most common strategies oil companies are planning to deploy in the coming years involve hydrotreated vegetable oil (HVO) (renewable diesel (RD)), SAF, hydrogen and carbon capture and storage (CCS). Most companies surveyed are focused heavily on RD and SAF, as well as CCS. European companies tend to focus heavily on green hydrogen, while Asia and North American companies tend to focus on blue hydrogen. All of the companies surveyed now have net zero targets, generally around 2050 (except for Reliance’s, which is a very progressive 2035). The NGO community will hold them to their commitments, to be sure.
Though the sample size is smaller this year (at 13 companies versus 20 surveyed last year), it is nevertheless significant and revealing about the status of the energy transition and how they are viewing investments. Global energy decarbonization largely rides on these companies’ backs, and despite the negative attention from climate activists and others in the NGO community, as well as regulators themselves, the industry ultimately is making the hard choices and placing huge bets on the technologies highlighted in this report. And there are no “sure things”, not even for RD and SAF.
The investments made by oil companies in these decarbonization strategies underscore a major industry shift towards sustainable energy. Driven by regulatory frameworks and the global push for cleaner energy solutions, these companies are transitioning from traditional fossil fuels to more sustainable alternatives. This shift not only helps mitigate climate change but also positions these companies to remain competitive in a rapidly evolving energy landscape. The ongoing and planned projects in SAF, hydrogen, CCS, and EV charging reflect a comprehensive approach to decarbonization, signaling a commitment to long-term sustainability goals.
Key Points:
[1] I sized the survey down from 20 to 13 this year because there had not been significant developments for a number of these companies, such as Lukoil, CNPC, Sinopec and Pertamina.