Top European energy executives have denied backpedaling on the energy transition, in part by pointing to their investments in biofuels.
Shell and BP have faced criticisms in recent months as they cut back on green investments. But, the company CEOs argue, investments must provide competitive returns. While renewable energy projects are falling short, biofuels are an attractive proposition.
“We have focused our strategy on where we think we can have the most value,” said Shell CEO Wael Sawan. Speaking in Abu Dhabi, at Adipec, Sawan said Shell had to be “very clear” about where it invests. “I don’t believe in using capital spend as a proxy for commitment in energy transition.”
Sawan said Shell’s investments should be thought of on a continuum – of decarbonising and transition, rather than binary.
“That continuum starts with decarbonising our existing assets,” Sawan said, and runs into biogas. The company bought Europe’s largest producer of renewable natural gas (RNG) in 2023. It paid nearly $2 billion for Denmark’s Nature Energy.
“That allows us to blend bioproducts with conventional energy products to bring down emissions,” Sawan said. He also cited investments in electrolysers in Rotterdam and Germany as proof of the company’s commitments.
Shell’s approach is “thoughtful and purposeful… that moves slightly ahead of the pace where we see our customers moving. Sawan went on to say the strategy was to deliver action, rather than just empty talk.
BP’s Murray Auchincloss also talked about the potential for growth in biofuels. BP has invested in landfill gas in North America, he noted. “Across the world, the part that looks the most interesting to me is building these biofuel value chains.”
Investments in biofuels, such as BP’s Brazilian investment, can “give something distinct that gives a tremendous platform for growth”. These assets will produce “for decades to come without decline,” he noted. “We can then take those [biofuel plants] and put them into our trading networks and create a really durable profit centre.”
Biofuels can also provide energy security, Eni’s Claudio Descalzi said. Describing the European refining business as “very bad”, he called for a need to diversify.
“We have to do something that is strong and robust, and doesn’t rely on subsidies or incentives. Biorefineries are working,” he said. “It creates a strong profitable business that justifies the transition and not relying on oil.”
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