Chevron announced Tuesday that it would more than triple its modest spending on green energy by 2028, including investments in renewable fuels, hydrogen and capturing carbon before it can warm the atmosphere.
The announcement appears to be aimed at forestalling challenges from activist investors like Engine No. 1, the hedge fund that was able to elect three members to the Exxon Mobil board this year. It was not clear whether Chevron's move would satisfy activists who are pushing U.S. oil and gas companies to commit to achieving net zero emissions from their operations and the use of their products by 2050 as concerns over climate change grow.
The company pledged to spend roughly $10 billion on cleaner fuels and technologies. That is still a small portion of its total annual capital spending, which is projected to be $14 billion to $16 billion through 2025.
A fifth of the new spending will go to lowering emissions from Chevron's exploration, production and refining operations.
"Renewable fuels, hydrogen and carbon capture target customers such as airlines, transport companies and industrial producers," Jeff Gustavson, president of Chevron New Energies, said in a statement. "These sectors of the economy are not easily electrified, and customers are seeking lower carbon fuels and other solutions to reduce carbon emissions."
Chevron, the second-largest American oil and gas company after Exxon Mobil, and other U.S. oil companies have fallen behind their European competitors in investing in clean energy in recent years but are slowly trying to catch up under growing pressure from investors. Harvard said last week that it would not make any new investment in fossil fuels.
Chevron said it hoped to finance its emission-reducing efforts with improved cash flow from higher oil and gas prices as the economy recovers from the pandemic.