Shell and BP could need US$945 Billion to become net-zero energy major
Investors who are proactive – Shell PLC or BP PLC may need to spend US$35billion every year to stay a’major energy company’ until 2050.
In order to achieve net zero compliance in 2050, any one of the seven majors would need to increase their carbon capture and removal system’s capacity.
In a recent report, the International Energy Agency (IEA), explained that this would require developing CCUS capacities of around 60 Mt of CO2 and carbon removal capacities of around 200 Mt of CO2.
To reach these capacities, it would take an investment of around US$25 billion per year.
The IEA said that mobilizing this amount of capital would pose a huge challenge, as it represents three-and-a half times the average annual capital expenditures of the majors in the last five years.
The energy giants could reduce costs by extending the range of low-emission fuels.
In order to meet today’s energy demand while maintaining net zero, the majors will need to produce more than 300 gigawatts of renewable energy. They would also have 85 kboe/d in biofuels as well as 12 billion cubic metres of low-emission hydrogens.
The cost of this approach would be around $20 billion per year until 2050.
The energy company will have invested less than 10% in oil and gas operations by then. The rest of the capital will be allocated to renewable energy.
BP rose almost 2% to 474p on Thursday, while Shell (LON 🙂 climbed 1% to 2,581p.