Oil Majors Slash Renewables and Boost Biofuels

European oil majors are winding down investments into renewable energy projects after the double whammy of low returns and skyrocketing costs prompted them to look towards more profitable deals.

– BP has halted 18 potential hydrogen projects already and is set to divest several existing wind and solar operations, similarly Shell which cut back on its 2030 carbon reduction target, leaving TotalEnergies the only major to stick to its initial commitments.

– At the end of 2023, BP and Shell had 2.7 GW and 3.2 GW of operational renewable capacity available, however their potential capacity stood as high as 58.3 GW and 34.6 GW, respectively, suggesting ample divestments over the upcoming period.

– Norway’s Equinor has announced this week that it would cut 20% of the staff from its renewable energy division, some 250 employees, and will take on less project exposure in the upcoming years.

Whilst Slashing Renewables, Biofuels Become Next Best Thing For Oil- In contrast to loss-making renewable energy projects, the portfolio of oil companies in biofuels keeps on increasing with the world’s six largest oil majors collectively developing 43 biofuel projects.

– Whilst majors tentatively eye opportunities in biodiesel or bioethanol as well, the main focus of the oil industry has been on hydrotreated vegetable oil (HVO) and sustainable aviation fuel (SAF) which make up 90% of those projects.