Chevron to invest USD10B in lower carbon energy businesses

Chevron Corporation, the second-largest integrated energy company headquartered in the United States, announced plans to invest more capital to grow lower carbon energy businesses.

“Chevron intends to be a leader in advancing a lower carbon future,” said Michael Wirth, Chevron’s chairman and CEO. “Our planned actions target sectors of the economy that are harder to abate and leverage our capabilities, assets, and customer relationships.”

2030 targets for new energy businesses

The company set the following 2030 growth targets for new energy businesses:

• Grow renewable natural gas production to 40,000 MMBtu per day to supply a network of stations serving heavy duty transport customers;
• Increase renewable fuels production capacity to 100,000 barrels per day to meet growing customer demand for renewable diesel fuel and sustainable aviation fuel;
• Grow hydrogen production to 150,000 tonnes per year to supply industrial, power and heavy duty transport customers; 
• Increase carbon capture and offsets to 25 million tonnes per year by developing regional hubs in partnership with others.

To achieve this scale, the company expects to invest more than USD10 billion between now and 2028, including USD2 billion to lower the carbon intensity of Chevron’s operations. This is more than triple the company’s previous guidance of USD3 billion.

Lower carbon fuels and other solutions

“Renewable fuels, hydrogen and carbon capture target customers such as airlines, transport companies and industrial producers,” said Jeff Gustavson, president of Chevron New Energies. “These sectors of the economy are not easily electrified, and customers are seeking lower carbon fuels and other solutions to reduce carbon emissions.”

At a Brent oil price average of USD60 per barrel, the company reaffirmed its expectation to earn double-digit return on capital employed by 2025 and generate USD25 billion of cash flow, above its dividend and capital spending, over the next five years.  The company also reaffirmed its 2028 upstream production greenhouse gas intensity targets, which equate to an expected 35% reduction from 2016 levels.

“With the anticipated strong cash generation of our base business, we expect to grow our dividend, buy back shares and invest in lower carbon businesses,” Wirth said. “We believe a strategy that combines a high return, lower carbon traditional business with faster growing, profitable new energy ones positions us to deliver long-term value to our shareholders.”

For more information about Chevron Corporation, view Chevron’s corporate fact sheet.