UK Edition
Oil chiefs try to boost green credentials with new investment fund
Some of the world's biggest oil companies including Shell and BP are preparing to announce a new green energy investment fund as they seek to improve their environmental reputation.
Chief executives Ben van Beurden and Bob Dudley, along with the heads of Saudi Aramco, Repsol, Eni, Statoil and Total, are due to unveil details of the fund at an event in London on Friday to coincide with the Paris climate agreement coming into force.
The companies are likely to face fierce scrutiny and accusations of "greenwashing" from environmental campaigners who argue the 'big oil' business model is fundamentally incompatible with avoiding dangerous climate change, which requires most of the world's fossil fuels to be left in the ground.
The fund will "develop technologies to cut carbon emissions and promote renewable energy", according to Reuters, which first reported the plans.
This will include technologies to increase car engine and fuel efficiency, and innovation in carbon capture and storage.
The companies are part of the Oil and Gas Climate Initiative (OGCI), which was created in 2014 with UN backing.
Both Shell and BP have existing investments in renewables, although they are far smaller in scale than their oil and gas businesses.
BP invested $8bn in renewables from 2005-2010 as part of its "beyond petroleum" push but has since scaled back investments significantly. It retains a biofuels business in Brazil and owns a series of large wind farms in the US after unsuccessfully trying to sell them.
It is also looking at small investments in technology development businesses.
Shell created a "new energies" division earlier this year and has said it intends to establish a portfolio to build on its "established strengths in low-carbon biofuels, hydrogen and smart customer solutions; as well as in solar and wind".
It is spending about $200m a year on research and development, compared with total capex of about $29bn this year.
Defending its position on renewables earlier this year, Mr van Beurden told the Telegraph Shell could not be expected to act against its economic interest. "I cannot invest $15-20bn in solar and wind, which is quite often what people somehow hope us to do, and also still at same time pay a dividend," he said.
Greg Muttitt, senior adviser at campaign group Oil Change International, gave the initiative short shrift even before details were announced. "These are the very companies that are causing climate change, and have consistently blocked action to address it: this latest fig leaf will not change the fact that their core business destroys health, damages livelihoods and costs lives," he said.
Dr Jonathan Marshall, analyst at the Energy and Climate Intelligence Unit, said: "It looks like a positive step that the largest oil companies are taking a more active interest in climate change, although more clarity is needed to determine if this is genuine or greenwashing.
"If well supported, the renewable investment fund could drive development in low carbon technologies, and it will be interesting to see how much of the $300 billion-plus budget these companies collectively have for 2016 is redirected to this fund."