Exxon escalates attacks on EU’s ‘high-regulation’ climate policies
US supermajor warns Europe’s approach has driven up energy costs and eroded public backing for green transition
ExxonMobil has stepped up its campaign against Europe’s climate policies, saying they have caused energy prices to soar and undermined public support for the low-carbon technologies required to meet the continent’s emissions reduction targets.
The US supermajor’s Global Outlook report, released on Thursday, included a section titled “Lessons from Europe”, which slams the EU’s “high-regulation, high-cost” approach to lowering emissions, which it claimed had “hurt” the bloc’s economy.
“Under Europe’s decarbonisation approach: Industrial production, a critical sector in Europe’s economy, is declining. Energy prices in heavy industry and commercial transportation are rising. As a result, public support for lower emissions technology needed to reach EU climate goals is wavering,” Exxon said.
Exxon has consistently lobbied against European regulations in the climate and sustainability area, arguing that it threatens to undermine the continent’s competitiveness and entangle US companies in bureaucracy that erodes their global competitiveness.
Darren Woods, Exxon chief executive, last month called for US President Donald Trump to use trade talks with Brussels to fight a European directive requiring non-EU companies to ensure their supply chains do not harm the environment or human rights.
Exxon’s Global Outlook, which makes forecasts about the global energy market up to 2050, said politicians needed to consider affordability when setting energy policies because voters would lose confidence in the economy and their administrations if prices increased rapidly.
“I don’t want it to come across as . . . the energy transition can’t happen or shouldn’t happen,” Chris Birdsall, director of Exxon’s economics and energy division, told reporters in a conference call. “Our point is, you need to need to be smart about it.”
He said the EU had tried to “push through” climate policies too quickly in the mistaken belief that the energy transition would result in cheaper energy for the continent because, at present, it imports a lot of oil and gas.
But this transition period could take up to 30 years and low-carbon investments were significantly more expensive than existing energy sources, said Birdsall.
“We do think high-income countries like the US and EU, over time, can afford more lower emissions solutions, but that has to play out over time. One, keep growing your economy and, number two, keep investing in technology,” he said.
The outlook said climate policies had “largely failed”, as the world was not on track to meet emissions targets, and forecast oil and natural gas would remain key to powering the economy in 2050.
Exxon’s attack on European climate rules has drawn criticism from environmental groups, which claim the company is seeking to undermine global efforts to tackle the climate crisis.
Mark van Baal, founder of Follow This, a Dutch shareholder activist group, said Exxon’s claims were further proof that the oil and gas industry was putting enormous effort into resisting change.
“Exxon is blind [to] the inevitable disruptive innovation of clean energy. With or without climate policy, oil and gas demand will structurally fall in the next decade, and Exxon is not prepared,” he said.
“If the company continues to ignore the reality that many markets are transitioning to a diversified energy mix, their shareholders will ultimately intervene,” van Baal added.
Exxon sued Follow This in the US last year, claiming that a climate petition the activist group filed against it breached US securities rules. The lawsuit was dismissed by a Texas judge.
The supermajor has faced criticism in the US, where it is being sued by several states over allegations that it misled the public about climate change and the dangers of fossil fuels. The company denies these claims.