4 Oil Giants Invest Billions to Lead the Low-Carbon Energy Shift

Globe and Mail

13 hours ago

The energy world is changing fast, and for oil and energy companies, the message couldn't be clearer: low-carbon solutions aren't just a nice-to-have anymore — they're essential. With record-breaking heat, stricter regulations and growing pressure from customers, cutting carbon isn't just about doing the right thing — it's opening up real business opportunities. It's pushing companies to innovate, explore new markets, and rethink what it means to lead in this space. For oils-energy companies and investors, this shift isn't just about keeping up with regulations. It's about staying competitive, finding new paths to grow, and making sure their investments are built to last.
In today's fast-changing energy world, integrated oil and gas companies are in a great position to lead the way. These big players handle everything — from finding and extracting oil and gas to refining it and getting it to customers, which gives them the know-how and resources to try new ideas and technologies. Companies like Exxon Mobil Corporation XOM, Shell plc SHEL, TotalEnergies SE TTE, and Chevron Corporation CVX aren't just sticking to traditional oil and gas anymore — they're upgrading their whole systems to include low-carbon solutions like carbon capture, hydrogen, and renewable energy. By combining what they've done for years with these new, cleaner options, they're finding smart ways to stay competitive and make real progress toward a greener future. Because they cover the entire process, they can move quickly, make smart investments, and lead the industry through one of its biggest transformations yet.
Why Low-Carbon Solutions Matter for Oil and Energy
Low-carbon solutions — from carbon capture to hydrogen and renewables — are vital for several reasons:
Regulatory Pressure and Market Demand: Governments worldwide are tightening emissions standards and setting legally binding climate commitments. This means companies that can't show real progress on decarbonization risk losing their license to operate, facing higher costs, or missing lucrative contracts.
Massive Market Opportunity: Hard-to-decarbonize sectors like industry, power, and transportation account for about 80% of global CO2 emissions. The market for emission-reduction technologies in these sectors could be worth up to $6 trillion by 2050. For oil and energy companies, this is a huge opportunity to capture new value pools and diversify revenue streams.
Investor and Consumer Expectations: Investors are increasingly channeling capital toward businesses with strong sustainability credentials, while consumers are demanding cleaner products. Companies that lead in low-carbon innovation can enhance their brand, attract investment, and build long-term customer loyalty.
Cost Savings and Efficiency: Advanced carbon management technologies and smart energy systems can help businesses slash energy waste, cut costs, and increase operational efficiency—all while reducing their environmental impact.
Future-Proofing: As the energy transition accelerates, companies that invest early in low-carbon solutions will be better positioned to adapt to changing policies, technologies, and market dynamics.
How the Energy Giants are Responding
Let's explore how the largest energy companies — ExxonMobil, Shell, TotalEnergies, and Chevron — are evolving to lead in the low-carbon future:
ExxonMobil: Scaling Up Hydrogen and Carbon Capture
ExxonMobil, a Spring, TX-based integrated oil and gas company, is placing big bets on carbon capture and low-carbon hydrogen. In its first-quarter 2025 results, the Zacks Rank #3 (Hold) company reported earnings of $7.7 billion and highlighted ongoing transformation efforts to ensure resilience in uncertain markets. Notably, ExxonMobil has pledged up to $30 billion between 2025 and 2030 for lower-emission initiatives, with about 65% of this investment aimed at reducing emissions across the broader industry, not just its operations. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Baytown low-carbon hydrogen project, poised to be one of the world's largest blue hydrogen facilities, serves as a key pillar of this strategy. Using CCS technology, Baytown will capture up to 10 million metric tons of CO2 annually, enabling both ExxonMobil and third-party emitters to cut emissions at scale. ExxonMobil's deep infrastructure and engineering expertise give it a strong advantage in commercializing these solutions efficiently.
The company is also advancing biofuels and lithium extraction, aiming to support both the decarbonization of its operations and those of other industries. Furthermore, ExxonMobil is deploying advanced methane detection and reduction technologies, underlining its commitment to tackling all major greenhouse gases as part of its broader emissions-reduction strategy.
Shell: Portfolio Reshaping and Renewables Expansion
Shell's first-quarter 2025 adjusted earnings were $5.6 billion, but the real story is its portfolio transformation. The company sold its Nigerian onshore operations for $2.4 billion, exiting a legacy region with significant operational risks. Simultaneously, Shell acquired Pavilion Energy, strengthening its LNG trading capabilities and positioning itself for long-term growth in cleaner fuels. The Zacks Rank #3 company is also ramping up investments in renewable power and hydrogen. While specific hydrogen projects weren't disclosed in the first quarter, the London-based integrated oil and gas company has a clear capital expenditure (CapEx) outlook of $20-$22 billion, much of it directed at transition technologies, including renewables, energy storage, and distributed energy platforms.
Shell is accelerating its energy transition strategy by investing $10-$15 billion in low-carbon solutions between 2023 and 2025, with a strong focus on hydrogen, renewables, and carbon capture. A key milestone in Shell's sustainability initiatives is the construction of Holland Hydrogen I in Rotterdam, poised to become Europe's largest renewable hydrogen plant when it begins operations in 2025. This facility will use offshore wind power to produce green hydrogen, which will help decarbonize Shell's refineries and support clean transportation.
Beyond hydrogen, Shell is rapidly expanding its EV charging infrastructure and renewable energy generation, particularly in wind and solar. The company's carbon capture initiatives, such as the Polaris CCS project in Canada, are designed to capture significant volumes of CO2 and support Shell's goal of achieving net-zero emissions by 2050. Shell's progress is evident in its achievement of over 60% of its targeted reduction in operational emissions by 2030, even as it adapts its long-term plans to the evolving energy landscape.
TotalEnergies: Accelerating Green Hydrogen and Renewables
Among the most aggressive movers, TotalEnergies, a France-based integrated oil and gas company, is rapidly expanding its renewable electricity and green hydrogen assets. In first-quarter 2025, the Zacks Rank #3 company posted strong results driven by an 18% year-over-year rise in electricity production, largely powered by renewables. TotalEnergies also acquired VSB Group, a German renewables developer, further cementing its role in Europe's green energy ecosystem.
A landmark initiative is its partnership with Air Liquide to build two green hydrogen facilities in the Netherlands, targeting 45,000 tons of annual production. These projects aim to reduce up to 450,000 tons of CO2 emissions per year, primarily by decarbonizing TotalEnergies' refining operations, while supporting broader EU climate targets.
TotalEnergies' integrated approach combines renewable generation, storage, and distribution, positioning the company as a key player in Europe's evolving green energy ecosystem and enhancing its resilience in a rapidly changing market.
Chevron: Piloting Solar-to-Hydrogen and Clean Tech Investments
Chevron, a Houston, TX-based Integrated Oil and Gas company, is taking a more measured yet innovative path. The first-quarter 2025 earnings were $3.5 billion, with highlights including the start-up of the Ballymore field in the Gulf of America. On the decarbonization front, the Zacks Rank #3 company launched a 5-megawatt solar-to-hydrogen project in California's Central Valley, its first such initiative. The facility uses solar energy to produce hydrogen for industrial and transport applications, showcasing Chevron's intent to blend renewables with traditional energy.
In addition, Chevron is supporting more than 140 clean-tech startups through its Chevron Technology Ventures, investing in lithium production, recently acquired lithium-rich acreage as part of a strategic expansion and intelligent fracking technologies to boost efficiency while reducing emissions.
The Bottom Line for Smart Investors
The shift to low-carbon energy is no longer a distant ideal — it's a critical business transformation already underway. Leading oil and energy companies are evolving from fossil fuel producers into diversified energy innovators. For investors, this means opportunities to back companies with bold decarbonization strategies that promise growth, resilience, and competitive advantage. In the race to net zero, those who invest early and think beyond traditional oil and gas will define the energy leaders of tomorrow — and reap the rewards today.
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This article originally published on Zacks Investment Research (zacks.com).