Chevron: $2.5 Billion Investments in Low-Carbon Hydrogen

Chevron Corp. plans to spend about $2.5 billion building up its hydrogen business this decade as the oil major accelerates investment in low-carbon technologies.

Austin Knight, vice president of hydrogen at the company’s New Energies unit, said that Chevron will develop both green and blue hydrogen. The former is made with renewable energy, while the latter is created from natural gas equipped with technology to capture emissions.

The American energy giant announced last fall it was allocating $10 billion toward developing renewable fuels, hydrogen and carbon capture through 2028, but it didn’t specify how that money would be split among various technologies.

At the same time, Chevron is among the oil refiners being pressured by the Biden administration to improve capacity as the soaring price of gasoline at U.S. pumps feeds record inflation — and unprecedented profit margins. The San Ramon, California-based company’s shares have risen more than 30% so far this year.

Hydrogen made from natural gas with carbon capture can be built at a larger scale today than the renewable power-based alternative, Knight said. Still, European oil majors such as France’s TotalEnergies SE and the UK’s BP Plc are targeting multibillion-dollar investments in green hydrogen projects.