U.S. oil giant Chevron considers spending around $2.5 billion on its hydrogen business as the company wants to speed up investment in low-carbon tech.
Austin Knight, Chevron’s VP of hydrogen at the New Energies Unit, said the company will focus on developing both green and blue H2.
Green hydrogen refers to one that is made with renewable power, while blue hydrogen refers to one made from natural gas with the technology to capture emissions.
Chevron announced it will invest $10 billion in renewable energy, hydrogen, and CO2 capture by 2028 but did not give details on how much would be allocated to each technology.
Last September, Chevron launched a study in collaboration with Enterprise Products Partners to look into carbon capture utilization and storage in the U.S.
“What you see right now is a shift to broader energy solutions with hydrogen and moving more into clean hydrogen,” Knight said at a Financial Times conference in London. “We want to be a part of that ramp-up.”
An environmentally-friendly choice, hydrogen plays an important role in decreasing harmful emissions and can replace gas and coal in hard-to-abide industries. The U.S. administration is looking to build at least four hydrogen sites as part of President Biden’s infrastructure plan.
“We should set the rules very clearly around what low carbon actually means, and then let the markets work to deliver real carbon reduction,” Knight said.
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Biden is pressuring Chevron to improve capacity as the company has reached record profit margins amid huge inflation and rapidly increasing gas prices. The shares of the oil giant have increased by over 30% in 2022.
The production of green hydrogen can currently scale up better than blue hydrogen, Knight said. Yet, companies like UK-based BP Plc and France-based TotalEnergies SE consider multi-billion investments in green hydrogen technology.