From Shell and bp to ExxonMobil, there has been a lot in the news recently about plans to tackle the need to become carbon neutral to support the fight against climate change. The UK government’s new ten-point plan emphasises a shift in focus towards the environment. Yet, major energy companies are lagging behind.
The past year has seen a significant growth in green energy. According to the Department for Business, Energy and Industrial Strategy’s (BEIS) energy trends data, renewables’ share of electricity generation was 47 per cent between January and March 2020, up from 35.9 per cent in the first quarter of 2019. This acceleration has caught many utilities off guard and led to a fall in the market share of coal generation.
Climate change is finally being recognised as a very real threat, and consumers are now looking at providers to act responsibly. In order to remain competitive and sustainable, the big energy powerhouses need to start transiting to green energy.
BP’s new strategy has created a new industry benchmark and is the most ambitious of any fossil group. The company is chasing a 50GW new renewables development goal by 2030 and plans to increase investment in its low-emission business, such as renewable energy. BP plans to cut back oil and gas production by 40 per cent and has recently made its biggest move towards renewables by purchasing an immense US solar pipeline. This new deal cements BP’s position as a major player in US renewables.
And it’s not just BP, Royal Dutch Shell has begun the switch to clean energy and investing large sums of money in low-carbon energy, including electric vehicle charging, hydrogen, renewables, and biofuels. In 2020, Shell won a deal to build a wind farm off the coast of The Netherlands and stated it will delay offshore oil fields in the Gulf of Mexico and the North Sea.
However, only 10 per cent of global energy utility companies are expanding their renewable energy capacity at a faster rate than their gas or coal capacity. Moreover, 60 per cent of those prioritizing renewable energy growth had not yet halted the expansion of fossil fuel growth.
Although Shell has made a start, there is further to go. In a landmark trial, a court in The Netherlands ruled that Shell must slash its carbon emission by 45 per cent by 2030. This is the first time a company has been legally obliged to align its policies with the Paris Agreement. The verdict is a warning to companies that climate change needs to be taken seriously. Already, Shell is stepping up efforts to cut emissions and accelerating their plans to become a net-zero emission energy company by 2050.
Exxon Mobil has lagged behind competitors in its response to climate change concerns. While global rivals have scaled back fossil fuel investments, Exxon has double spending to boost its output. Yet, this year a climate activist hedge fund has got two of its members elected to the board. Shareholders have chosen to take action to address climate change and put pressure on Exxon to adjust its policies towards sustainability.
Now is the time to start addressing climate change, and the big energy powerhouses have a unique and unrivalled opportunity to lead the way and set an example to be followed. Equally, engineers and policy officials also have an opportunity to get involved and make a difference in how major energy companies implement clean energy.
This is a very exciting time, and we believe it will likely lead to the creation of new job opportunities, particularly in engineering and public policy. To find out more about roles in the sector or to discuss your hiring needs, please get in touch with us.
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