Exxon Mobil, the US’s largest oil company said yesterday that within a decade it could be making more from decarbonisation than fossil fuels.
Heavily criticised by environmental groups for its slow progress on ‘greening’ its business, Darren Woods, chief executive, said he sees energy transition as a ‘multi-trillion’ dollar market in ten years and even larger going forward.
In a presentation to investors to outline its decarbonisation strategy, Exxon predicted its business would depend less on spot prices and be structured more towards long-term contracts with customers working to reduce their own carbon footprint.
"This business is going to look quite a bit different than the base business of Exxon Mobil," said Dan Ammann, president of Exxon's two-year-old Low Carbon Business Solutions unit and reported by Reuters.
"It is going to have a much more stable, or less cyclical, profile."
Within five years the market could be worth tens of billions of dollars in annual revenues, the company said in its presentation.
Carbon pricing will be a key element of the plan, with Exxon seeing the price rising by as much as three times current levels, with the cost of reducing greenhouse gas emissions also key.
Exxon pointed to a deal signed on Tuesday with chemicals group Linde, which is paying to decarbonise its operations, adding it expects to sign contracts that should generate multi-billion dollars in revenue annually in the next five years, under current conditions.
The business can achieve "robust double-digit returns" off these long-term contracts, Ammann said.
Exxon has been one of the laggards when it comes to unveiling a green strategy among the oil giants but said it now intends to spend US$10 billion by 2027 to cut its own emissions as a way to show other businesses the way forward.
Exxon predicts carbon capture, hydrogen, biofuels as a market will have a combined worth of US$6.5 trn by 2050, equivalent to the current global oil and gas business.