Please ensure Javascript is enabled for purposes of website accessibility

ExxonMobil to Create a New Low-Carbon Business Unit

By Matthew DiLallo - Updated Feb 2, 2021 at 9:01AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The oil giant is moving toward a cleaner future.

ExxonMobil (XOM 2.45%) unveiled plans yesterday to create a new business to commercialize its low-carbon technology portfolio. ExxonMobil Low Carbon Solutions will initially concentrate on carbon capture and storage, which extracts carbon dioxide from the atmosphere and injects it into the ground. This business will also focus on other lower-carbon technologies in the future, including hydrogen.

ExxonMobil plans to advance more than 20 new carbon-capture and storage (CCS) projects worldwide in the next few years. It anticipates investing $3 billion on lower-emissions energy projects through 2025.

The company has several projects under development. For example, it's evaluating several CCS projects that have the potential to collect millions of tonnes of carbon dioxide from industrial sources along the U.S. Gulf Coast, which it would store in onshore and offshore geologic formations. Future new projects will complement the company's existing carbon-capture capacity in the U.S., Australia, and Qatar that currently capture 9 million tonnes per year, the equivalent of planting 150 million trees.

A person holding a plant with a bright lightbulb in it surrounded by icons for energy such as a solar panels and wind turbines.

Image source: Getty Images.

ExxonMobil is the latest oil giant to ramp up its investment in lower-carbon energy solutions. But at $3 billion through 2025, it's a small portion of its overall capital spending program (as much as $25 billion per year) during that time frame. For comparison's sake, BP (BP 1.67%) plans to shrink its oil and gas business by 40% over the next decade while spending as much as $5 billion annually to build a leading renewable energy power business.

Given the economy's transition to lower-carbon fuel sources, Exxon will need to continue shifting spending away from fossil fuels or risk falling behind and underperforming its rivals. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Exxon Mobil Corporation Stock Quote
Exxon Mobil Corporation
$89.03 (2.45%) $2.13
BP p.l.c. Stock Quote
BP p.l.c.
$28.70 (1.67%) $0.47

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.