While many of the world’s leading oil companies are investing in renewable energy R&D, for the most part, the vast majority of their spending is still centered around fossil fuels. Royal Dutch Shell, for instance, previously announced its plan to invest 10% of its $1 billion a year R&D budget in renewable energy sources and close to 25% in “low-carbon initiatives,” defined by the company as hydrogen, biofuels, and carbon capture and storage. But, instead of focusing on creating new renewable technologies, Shell has been concentrating on fostering the development of new energy technologies that are complementary to existing Shell businesses and partnering with organizations that facilitate this research. According to Shell, it is essential to improve the efficiency of existing fuel technologies, because for the foreseeable future, oil and gas will be the core energy system, despite all the enthusiasm surrounding renewables.
Many energy companies have not disclosed how much they are investing in R&D of low-carbon energy sources, a key reason being that they have not necessarily generated profits from cleaner energy initiatives that match those from their more conventional oil and gas businesses. With demand still growing for oil and gas, it can be difficult for some companies to justify spending capital on low-return projects.
Leading global oil companies comprise over 50% of worldwide energy-related greenhouse gas emissions, yet spend a small portion on cleaner investments, which has resulted in criticism from investors and activists. European energy giants such as Eni, Equinor, Shell and Total are amongst the companies that are spending the most on low-carbon investments in comparison to their global contemporaries; however, as a whole, the industry as an aggregate spent just 1.3% of total 2018 capital expenditures on low-carbon investments.
Source: Financial Times