ExxonMobil: Europe needs policy change not deindustrialization to be ‘attractive’ decarbonization playground

U.S.-headquartered energy giant ExxonMobil is among the oil and gas industry players, which are pursuing reductions in greenhouse gas (GHG) emissions footprint. The president of the oil major’s European arm is adamant that Europe, just like other regions, needs industry to deliver the right set of climate tools and solutions, thus, the recipe for the energy transition feast, in his view, is decarbonization not deindustrialization.

Illustration; Source: ExxonMobil

While pointing out that companies like ExxonMobil have the tools to help Europe achieve its net zero ambitions, Philippe Ducom, President of ExxonMobil Europe, underlined that industry investments would need to rise significantly to meet the Europen Union’s net zero 2050 ambitions. To make this happen, Ducom identifies policy as a “key” ingredient in turning Europe into an “attractive” region for the projects and technologies required to push the energy transition agenda forward.

It is no secret that ExxonMobil plans to spend $20 billion globally on lower-emission investments through 2027. However, Ducom believes spending part of those funds in Europe will be difficult unless policy change comes into play, with governments making industrial competitiveness central to the next EU institutional cycle. Otherwise, he is convinced that the future of European industry and the Green Deal are in jepardy.

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“EU policies profoundly impact industry and investment decisions. When deciding where to invest, ExxonMobil prioritizes regions with clear and long-term policies that support competitive returns. Unfortunately, Europe’s current policy landscape doesn’t facilitate innovative projects. Regulations change, environmental targets are accelerated, and taxes are increased retroactively,” explained President of ExxonMobil Europe.

While pointing out that Europe urgently needs a business case, Ducom elaborates that running a business requires economics to make sense, which is not the case in Europe, as expensive energy and labor, coupled with regulatory burdens, have negatively impacted the EU and its ability to secure the investments it requires for the energy transition to keep gaining ground.

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A European Roundtable for Industry survey shows that 84% of company leaders think Europe’s competitiveness is weakening. With this at the forefront, Ducom recently signed the Antwerp Declaration for a European Industrial Deal on behalf of ExxonMobil.

The declaration calls for clarity, predictability, and confidence in Europe and its industrial policy. This call for a business case for investments in Europe is supported by 775 organizations from 20 sectors, 554 companies, 177 associations and unions, and 44 others.

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Furthermore, Ducom underscores that ExxonMobil remains committed to reducing its Scope 1 and 2 emissions from operated assets and sees opportunities to use its core capabilities to help other players curb theirs in support of Europe’s aspirations for a sustainable future.

With 80% of energy-related global CO2 emissions coming from three sectors – industrial sources, power generation, and commercial transportation – the company is among those scaling up low-carbon solutions for these industries with technologies such as carbon capture and storage (CCS), hydrogen, and lower-emission fuels. Ducom perceives collaborative efforts and market-based, technology-neutral policies that support competitive returns as necessary to reach emission-reduction goals.

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President of ExxonMobil Europe underscored: “I urge governments and industry stakeholders to unite, listen to the concerns of companies like ours and establish a policy framework that nurtures innovation, drives investment and secures the long-term competitiveness of European industries. We’ve already seen signs of deindustrialization in Europe – plants are running at reduced rates and sites are being closed. The time to act is now.

“As Europe sets its strategic agenda for the next five years, it must make clear that decarbonization through deindustrialization is unsustainable – for the climate, our citizens and our companies. Together, we can surmount the challenges ahead and pave the way for a more sustainable future in Europe.”

Well-versed in the nuances of the current energy ecosystem, ExxonMobil’s Chairman and CEO, Darren Woodssaid at the APEC Summit in San Francisco last year that the plan to tackle climate change and energy demands would need to go beyond expanding wind, solar, and EVs. According to ExxonMobil’s CEO, the world needs to commit to solving its “energy and emissions challenges simultaneously” to bridge the global North-South divide. 

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Woods also stated that the problem was not oil and gas but emissions, echoing Kevin Gallagher, Santos’ Managing Director and Chief Executive Officer, who underscored that “the climate enemy is emissions, not fossil fuels” while addressing a WA Energy Club luncheon in Perth, Western Australia.