ExxonMobil is making strides to transition to profitable low-carbon businesses to fight climate change. The company has outlined ambitious plans to generate tens of billions of dollars in revenue from biofuels, hydrogen, and carbon capture within a decade. Profit comes when governments incentivize energy transition, such as through the Biden administration’s 2021 Inflation Reduction Act that included funding for climate projects.
Driving the transition to low-carbon businesses is Dan Ammann, Exxon’s top executive who previously ran General Motors’ self-driving car unit. Ammann has highlighted the importance of the transition being economically viable, something the company is working towards. In the last few months, several hydrogen and carbon capture projects have been announced, mostly along the US Gulf Coast.
While ExxonMobil’s plans for low-carbon businesses are still developing, it is investing around $17 billion and expecting to generate profit by 2025. The record profits from oil and gas production already give the company a strong capital reserve for its energy-transition efforts. That, combined with government incentives, will ensure that these low-carbon projects can be successful.
Critics dispute ExxonMobil’s continued investment in fossil fuels and its efforts to build large-carbon capture and hydrogen projects. However, the company is continuing in its mission to provide a realistic and economically viable way to transition to renewable energy. With strong capital reserves and government incentives, ExxonMobil is poised to be a major part of making the energy transition possible.