European leaders seeking to tackle climate change should look to U.S. policy and “let the market work” to prevent companies from being driven away by prescriptive regulations, Exxon Mobil Corp. CEO Darren Woods said .
“I think it’s a big mistake to pick winners and losers and focus on specific technologies,” Woods told Norwegian Heritage Fund CEO Nicolai Tangen on his podcast. “Instead, we should look more broadly to let markets figure out which solutions offer the greatest emissions reduction at the lowest cost.”
Europe has been working with a greater sense of urgency since the Biden administration passed its Inflation Reduction Act last year, with $370 billion in tax subsidies to reduce carbon emissions. The package is a turbo-charged interest in carbon capture and storage technologies, which for years have been considered too expensive and prone to failure. Exxon, which has pledged to spend $17 billion through 2027 on low-carbon initiatives, is among the companies stepping up plans to capture emissions.
“Carbon capture is going to play a very important role. It’s a technology that exists today. It’s one that we have a lot of experience with,” Woods said. “Think about carbon capture and storage, think about hydrogen, think about biofuels, all of those recognized by credible third parties will be needed as part of the solution.”
While other oil majors are looking to develop wind farms and solar farms, Exxon is focusing on technologies that fit the company’s strengths, Woods said. “At the end of the day, we’re a molecule company, not an electron company.”
Even as it pursues carbon capture and storage technology, Exxon will continue to pump oil and gas, Woods said.
“If we stop producing diesel and gasoline, world demand does not change. Someone else will find it,” he said. “I stop growing liquefied natural gas and the world burns more coal.”
Norway’s sovereign wealth fund will require companies it invests in to achieve net zero emissions by 2050 at the latest. He recently voted in favor of a proposal calling for Exxon to adopt a medium-term goal to reduce its customers’ emissions, known as Scope 3, but the demand was rejected by a majority of shareholders.
