Fossil fuel giant Equinor has told Sky News it is not investing as much money as it ought to in renewable forms of energy.
The Norwegian state-owned oil major spent around 8.6% of its capital expenditure on renewables in 2020, according to analysis by Capital Economic for campaigners Uplift – more than the industry average of 4% predicted for 2021.
“It is not enough,” senior vice president Grete Tveit said in an interview. Earlier she had told the CBI Achieving Net Zero conference that Equinor wanted to be a leader in the green transition.
But she said the company was aiming to increasing its CapEx on renewable and low carbon solutions to 30% in 2025 and 50% by 2030.
These “low carbon solutions” include blue hydrogen and carbon capture and storage (CCS), both of which Equinor has big plans for in the UK. It wants to make the Humber the “world’s first net zero industrial region” by 2040, with a blue hydrogen project and a gas fired plant with CCS both in the pipeline, subject to funding.
How much the world should rely on CCS, which sucks emissions out of the air and stores them underground, divides opinion.
United Nations scientists the IPCC are clear the technology is “unavoidable” to reach net zero, but should be reserved for hard to decarbonise sectors like agriculture, aviation, shipping and industrial processes, and happen alongside “immediate and deep emissions reductions across all sectors”.
Tveit says their product would be open to all industries, but is receiving interest generally from industry, such as steel, fertilisers, chemicals, energy from waste and cement.
She rejects the criticism from green groups that CCS delays decarbonisation by allowing companies from any sector to bury avoidable emissions instead of cutting them.
“So far, we have enough storage capacity for those who want to sign on. So that has not been a dilemma,” she told Sky News.
“Storing away CO2 as much as possible, as soon as possible, is important.” The world currently stores and captures around 0.1% of emissions.
The blue vs green debate
Equinor wants to use that CCS to create blue hydrogen power, derived from natural gas in a process that creates greenhouse gases that are then captured and stored. Green groups say blue hydrogen simply delays the energy transition, given the development of green hydrogen generated from renewable energy, creating no emissions.
“I think we need to use both,” said Tveit. “I don’t think they compete.”
She acknowledged the security risk posed by blue hydrogen, which – unlike its green counterpart – relies on natural gas. But since their projects aren’t due to kick off until 2025 and beyond, she believes the company has time to safely source the necessary gas.
But Equinor, also plans to develop a major new oilfield, Rosebank off the West Shetland coast, far larger than the controversial nearby Cambo oilfield currently paused by Shell following protests.
The majority (80%) of North Sea oil is exported because it is incompatible with UK refineries.
Tveit, whose portfolio covers low carbon solutions, could not be drawn on the future of Rosebank, which awaits final investment decision. But speaking generally about new fossil fuel projects, she said “we need backup power” for when the wind doesn’t blow nor the sun shine.
The Paris-based International Energy Agency (IEA) last year said no new fossil fuel projects are compatible with the world’s net zero ambitions.
Watch the Daily Climate Show at 3.30pm Monday to Friday on Sky News, the Sky News website and app, on YouTube and Twitter.
The show investigates how global warming is changing our landscape and highlights solutions to the crisis.