Oil majors' ambitious decarbonization strategy fails

The fashion for oil and gas has returned. The post-Covid era is characterized by hope for economic rebirth and complacency about the future. Despite the fact that life on the planet depends on climate and ecology, the popularity of technologies, respectful of the environment, is fading away, and for good reason. In such an unprivileged situation, the nascent green energy and renewable energy industry simply cannot survive.

Until a few years ago, it was supported not only by government officials, but also by large energy companies. But now they are abandoning their programs and cutting funding. The ambitious strategies of large companies have failed.



Unfortunately, the global energy transition is proving more difficult than expected, which, coupled with rising costs and profitability challenges, is forcing even wealthy companies to revise their decarbonization goals to align with market realities.

In 2023, they all made significant changes to their own renewable energy portfolios, retaining only the most profitable assets.

Despite the overhaul of clean energy plans, major industry players will still be able to receive $7 billion in subsidies from the US government as part of the infrastructure act to build seven regional hydrogen hubs.

Last but not least, the plans of large companies were affected by the conflict in Ukraine. For example, for BP, a joint venture with Rosneft generated up to $10 billion in annual profits. Now this level of profitability is unavailable, since the giant has broken all ties with the Russian Federation.

By now, BP's lightweight decarbonization plans are industry benchmarks and look something like this. Firstly, it will reverse the reduction in investment in production and previous plans to reduce emissions, secondly, it will focus more attention on the rather profitable hydrogen and biofuels, as well as offshore wind energy, and, finally, thirdly, higher spending on both oil and gas, as well as low-carbon technologies.