Offshore Technology

Daily Newsletter

11 August 2023

Daily Newsletter

Chevron backs two lower-carbon projects in Australia

The US energy company has also formed a partnership with Cummins to promote low-emission fuels.

US energy major Chevron is investing in two lower-carbon projects in Western Australia (WA) through Chevron Australia New Energies and Chevron Australia.

The quantum of the investment was not disclosed.

Chevron said it will invest in WA-based Carbon Sync, which is in charge of a trial project for soil carbon sequestration involving up to 80,000 hectares of WA's cropping and grazing region.

This will be Chevron’s first nature-based carbon offsets project in the country.

Under the second project, Chevron is participating in a multi-year research study with Deakin University's Blue Carbon Lab to investigate possible CO₂ sequestration options in WA's coastal wetlands.

Chevron Australia general manager of energy transition David Fallon said: “Our collaboration with Carbon Sync is expected to provide critical insights related to soil carbon projects, in a region with large potential for scale to help meet the forecasted demand for Australian Carbon Credit Units.

“With the Blue Carbon Lab contribution, we are excited to explore the opportunities for blue carbon in WA’s saltmarsh, mangrove and seagrass environments.”

Separately, Chevron USA, also a unit of Chevron, signed a memorandum of understanding (MoU) with Cummins, which offers a range of power solutions.

With the new MoU, the two businesses' prior partnership on hydrogen and renewable natural gas is now expanded to cover other liquid renewable fuels such as biodiesel, renewable diesel, and blends of renewable petrol and natural gas.

Together, the companies hope to encourage commercial and industrial adoption of low-emission fuels across North America.

Cummins president and CEO Jennifer Rumsey said: “By collaborating strategically with Chevron, we plan to improve access to fuel and infrastructure for our customers, helping grow the availability of alternative and renewable fuels while reducing emissions.”

Chevron president of Americas products Andy Walz said: “Collaborations like this one with Cummins are intended to make energy and global supply chains more affordable and reliable while helping commercial fleets who use our products and Cummins’ equipment to advance a lower-carbon world.”

ESG 2.0 marks a shift towards stricter environmental rules

ESG is moving into a different era, which we call ESG 2.0. While ESG 1.0 was driven by voluntary corporate action, spurred by pressure from activist consumers and investors, ESG 2.0 is being driven by a new wave of government policies. The EU has taken the regulatory lead, with rules introduced or in the pipeline that will price emissions, regulate the use of the terms ‘ESG’ and ‘sustainability’ in marketing materials, and make ESG reporting mandatory. The US has taken a different approach, favoring less regulation and more financial support in the form of tax breaks for clean industry (renewables plus nuclear and hydrogen). China is planning to expand its emissions trading system to more sectors, decarbonize its heavy industry, and ramp up its use of renewables. The new policy direction is mainly motivated by the ambition to hit net zero emissions targets. But on top of this, governments are now competing for clean industry and trying to challenge China’s leadership on the production of the world’s green technologies such as solar panels and batteries, as well as the production and refinement of materials needed for energy transition such as lithium. These driving forces are leading to policy that will impact every sector, not just heavy industry, and will keep ESG near the top of the regulatory agenda over the longer term.