American energy company Chevron Corporation has committed to investing $10 billion in low-carbon projects through 2028. The commitment comes amid increasing pressures from governments and the international community for producers to adopt more climate-friendly initiatives.
The announced budget is more than three times Chevron's previously stated target of $3 billion for green projects. Chevron said it plans to use about $2 billion of the $10 billion budget to overhaul its operations and cut its carbon emissions.
Chevron's chairman and CEO, Michael Wirth, said the investment should allow the company to become a leader in advancing the industry to a "lower-carbon future." He added the investment, along with the company's capabilities, assets, and existing relationships should allow Chevron to target multiple sectors in the economy as part of its green initiative.
Chevron also reiterated its goals of improving its carbon intensity - an industry term that compares a company's total emissions and its total energy produced. The company said it plans to cut its carbon intensity by as much as 35% by 2028 when compared to its 2016 levels. To achieve this goal, the company also plans to expand its business into greener sources of energy production such as hydrogen gas and natural gas.
Unlike other companies, Chevron has yet to set a specific goal as to when it should become a net-zero carbon emissions producer. Chevron said that it declined to project such as goal as it did not want to be in a position to give out unrealistic and undeliverable" ambitions.
In the U.S., the Biden administration has increased pressure on energy producers and businesses across various sectors to adopt greener energy consumption and production practices. Earlier in the year, the government had set a goal for the country to cut its greenhouse gas emissions by up to 52% by 2030. This is part of the country's more ambitious goal of reaching net-zero emissions by 2050.
Investors and environmentalists have mostly remained skeptical of Chevron's plans and similar plans laid out by other major energy companies. Spending on low-carbon initiatives often entails added costs for a company, hurting short-term profits.
"While the company did announce a number of new sustainability initiatives, none of them addressed this crucial concern," Follow This, a climate group comprised of investors in energy companies, said.